You have to think of hotel rooms as production capacity.
You don't increase capacity in order to have even more spare capacity. You increase it because you need to use it.
I don't double production capacity only to have half of that added capacity go unused. That's a poor use of company resources; highly wasteful.
No one can ever accuse WDW of not wanting to optimize production. To the contrary, they've become so obsessed with optimizing production that their leadership has lost site that their guests are not raw material; they are people.
WDW's room additions reflect what they
thought they needed or, more to the point, what they thought they could sell.
AOA increased "production" capacity by 724K room nights per year yet "units sold" went up by only 362K, 50%.
For nearly any vacation hotel, 50% is pretty bad. Given that WDW hotels used to traditionally run at 90% occupancy, it's a disaster. Remember, during WDW's post-9/11 crisis when they were closing buildings and laying off Cast Members, occupancy was 76%.
As recently as 2008, Disney's occupancy was 89%.
In the 21st Century, WDW's occupancy rate has been propped up by DVC. WDW has tripled the number of DVC units since 2000.
As a timeshare, once sold, it becomes the member's problem to make sure that the room is filled.
I'm a DVC member. If I'm not using my DVC points then I better be sure that I am renting them to someone or giving them away to a family member. (Don't you wish you were my relative?
)
However, even if I use my DVC points, that doesn't mean I'm going to show up at the theme parks. I'm like any consumer, I'm going to WDW's theme parks if I think it's worth it.
I really enjoy WDW's water parks. I'm there!
WDW's theme parks are another matter. I've been skipping those and heading elsewhere when I'm in Orlando, mostly Universal. I'm not the only DVC member doing that. Remember, we're timeshare owners; we
have to go every year. That means we get bored with the same old same old faster than most.
My DVC points are being used but I'm not spending money at the theme parks. I'm paying less that $100/night most nights for a Deluxe Resort Studio, less than $300/night for a Deluxe Resort 2-bedroom villa which consists of 3 rooms. (For example, I paid $294/night for a Boardwalk View 2-bedroom villa at the Boardwalk Villas for Thanksgiving.) Compare that to what non-DVC members are paying and what they are getting for their money.
And I'm sure not spending money at WDW's overpriced restaurants (I've got a kitchen in my villa) or on their overpriced merchandise. It's not like the old days when the only place I could find something was at WDW. "One Disney" has sucked the fun out of shopping at WDW.
WDW is making money off me. But they are missing so many opportunities to make even more. They keep grabbing at my pennies and missing my dollars.
The point is, WDW's timeshares help boost the hotel occupancy rates but they don't necessarily translate into park dollars.
Since it's glory days when WDW hotels ran at 90% occupancy, WDW has mostly built timeshares and Value Resorts.
Both opened up new markets to WDW. Both should have improved WDW's occupancy rate even more. The added DVCs and the first 4 Value Resorts did exactly that.
Yet WDW's overall occupancy rate has declined. Imagine what's been happening at WDW's original hotel base, its Deluxe and Moderate Resorts, hotel categories that used to run at over 90%.
Trends at WDW's hotels are bad, really bad.