[Excerpt] The performance of hotel markets during the 1980s was unique and in violation of the economic principles that govern these markets. The most direct evidence of this period-specific behavior comes from the fact that hotel occupancy rates noticeably and persistently declined during the decade while the supply of hotel rooms sky rocketed. Exhibit 1 contains information on hotel market indicators from the database of thousands of hotels that my firm manages. The average hotel occupancy rate in the U.S. began the decade in 1980 at 73.5 percent and ended at 65.2 percent. In direct contradiction with how supply should have behaved in response to falling occupancy, the number of available hotel rooms increased every year of the 1980s and ended up 48 percent higher in 1990 than in 1980. In addition, real average daily room rates by 1993 ($57.69) about equaled the 1983 ($59.99) level. And by 1994, astute investors were able to pay a mere 30 to 40 cents of replacement cost dollar for quality, full-service hotel assets.