Why Hotels? Economy Weakens but Hotels Remain Relatively Strong—What Gives? And What Might Give?

Abstract

Despite tepid economic indicators, the demand for hotel rooms in the United States has surged since the depths of the great recession in 2009. Bucking all apparent economic trends, lodging has been a leading industry during this sluggish economic recovery. This is different from past recovery periods when hotels typically lagged other industries. In this article, the authors identify and explain the economic forces behind the growth in lodging demand during the recovery. Then they examine future changes in lodging demand based on two different economic forecast scenarios.