I am a four-star elite member. I’ve use the waitlist several times, the most recent was about a year ago. It almost always comes through for me, there was only one time when I waitlisted and nothing ever opened up. So I’m under the impression that it works reasonably well. Of course, I have no idea if the process is automated or manual or if released weeks immediately go back into general inventory, it seems like it’s really lousy if that’s the case – isn’t it also possible that in many cases, nobody is waitlisted? If nobody is waitlisted, it’s totally reasonable that released weeks would flow right back into general inventory.
This is probably a hard situation to test through trial, somebody would have to hold a reservation which they don’t want during a period when everything is full, then somebody else would need to waitlist that week, then the first person would need to cancel and see what happens.
Next time I am talking to Elite owner services, I’ll ask them if they know. They are often pretty forthcoming about stuff like this. Then there are times when you sense they are trying to keep you away from stuff they aren’t supposed to talk about.