I've never understood the dining plan and also agree that it has single-handedly been the largest contributor to the food downfall.
This is the easiest question in the WDW to answer...but nobody really stops to think about it.
Why free dining? or dining plans?
there are a couple of good arguments that probably are a small part of the consideration...
the first is that by maximizing the capacity of the sitdowns they are still getting a better yield out of their workforce...even with the discounted math of "free dining" in play. that is most likely true.
the second is that by filling the sitdowns...more people are then forced to use the quickserves (because those that would just skip meals/snack now don't because they are getting "free"/discounted meals) where the profit ratio is higher. That undoubteldy is also true.
But the REAL reason?
Is because they know the modern vacationer so well...hell, they practically invented him...that they know how the money comes to them. People budget/pay off the capital cost of thier vacation..be that 1000, 2000, etc. That is the first step or the thing that they square away first (or if you're a frequent traveler...you treat it like your electric bill, just casually accept it...and pay). The second thing that people do is then pool "pocket cash" for months or even years leading up to the trip. kids get giftcards...grandma gives one for christmas...mom and dad put a little away each week or month.
And then they descend on the swamp. The used to buy food, drinks, balloons, and their assorted junk with it.
But wait...now the food is already paid for!
But the traveler's urge is to still spend...afterall, they worked for this. They saved, they waited...they went to work and school. It's time to party.
So you have no car...you are surrounded by giftshops...you are bombarded by the ambience...and you want to live it up, dammit!!
That is the point. Disney's parks unit (
disneyland, da world, and disneyland paris) generate as much revenue off merch as they do off everything else (roughly 3.5 billion each year...for a quaint seven billion per year according to their annual report). the "everything else" is low profit margin if at all...that's where almost all your operating costs are covered. The profit off merch? 20 to 1 in some cases.
It's made in sweatshops, packaged in mass, and shipped in with no tarrifs via free trade agreements...and all it costs is minimal supply, labor, and transport costs.
And its conveniently made in China...hmmm....that's funny...i heard disney might build a park or two there...
That is the reason. The dining plan also allows other savings...because that "free" or "25% savings" on the plans covers alot of cheapskate black ops...