Markets

The U.S. Lodging Industry

Bibliographic Data

ID14855124
AuthorsArturs Kalnins (0000-0002-1963-3911, Cornell University, corresponding author)
Year2006
Volume20
Issue4
Pages203-218
Publication date2006-08-01
Open AccessYes
TypeARTICLE
VenueThe Journal of Economic Perspectives (JOURNAL)
Journal identifiersISSN: 0895-3309 • E-ISSN: 1944-7965
PublisherAmerican Economic Association (PUBLISHER • US)
DOI10.1257/jep.20.4.203
OpenAlexW1989916814
LanguageEN
Citations received5
References cited30

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

Business · Cournot competition · Descriptive statistics · Economics · Empirical evidence · Fixed cost · Industrial organization · Market structure · Microeconomics · Oligopoly · Product differentiation · Consumer Retail Behavior Studies · Housing Market and Economics · Sharing Economy and Platforms · Marketing