It's not just supply and demand

Implications: The hospitality industry is and will be facing an increasingly tight market in which to operate

Analysis: The real dilemma that is facing the hospitality industry for this recession is the same as in the past recessions except for just a few differences. First, the issue is, what kind of facility did I build and what do I need to do to keep it profitable during this difficult period. What I mean by that is if you built a higher end property then to what extent are you willing to compromise your room rate and potentially the type of clientile that you place in that room. If your hotel has high end restaurants but you have dropped your rate dramatically just to fill the property then you may see your revenues fall in all categories. The other factor that must be considered is, what is the expense to maintain a guest room? If it is a higher end room then your room rate compromise may be mitigated by the expense to clean, place the amenities and other miscellaneous expenses. The real challenge is to find the right mix of acceptable room rate and what level of occupancy that provides. There are ways to limit expenses by condensing the property. What I mean by that is to close whole floors and room your customers on the floors you keep open, you will reduce the travel time of the room attendants as well as reduce supervisory personnel. It will be a difficult period for hotels but the better managed properties will survive and live to raise room rates another day.