THE CYCLIC BEHAVIOR OF THE US LODGING INDUSTRY

A recently constructed data series suggests that the hotel: industry h as experienced two rather large building booms from 1969 to 1994. By c ontrast, hotel demand seems to move closely with the United States eco nomy, at a much higher cyclic frequency. Occupancy and room rental rat es follow the slower movements in supply. A structural model is estima ted over this series which displays long lags between occupancy and ro om rental rate changes, as well as between room rental rates and new s upply. These lags create a system of difference equations that is clos e to being dynamically unstable. Forecasting forward with smooth econo mic growth, yields a new and even larger future building boom.