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  4. Fall 2006
  5. Markets: The U.S. Lodging Industry

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

Markets: The U.S. Lodging Industry

  • Arturs Kalnins
Journal of Economic Perspectives
vol. 20, no. 4, Fall 2006
(pp. 203–218)
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Abstract

The U.S. lodging industry appears highly competitive. Ownership concentration appears to be low. Fixed costs are high relative to variable costs and unused rooms cannot be stored for future sale, so price-cutting should be attractive. However, this paper argues that, unexpectedly, oligopolistic market structures in many local lodging markets, combined with behavioral norms of cooperation, sustain profits in what might otherwise be an industry of cutthroat competition. I describe the patterns of competition and cooperation in the U.S. lodging industry, summarizing theoretical arguments, empirical research, descriptive statistics from industry and government sources, and anecdotal evidence from the trade press and from interviews conducted with managers of over 200 properties nationwide.

Citation

Kalnins, Arturs. 2006. "Markets: The U.S. Lodging Industry." Journal of Economic Perspectives, 20 (4): 203–218. DOI: 10.1257/jep.20.4.203

JEL Classification

  • L83 Sports; Gambling; Restaurants; Recreation; Tourism
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