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The Cyclic Behavior of the U.S. Lodging Industry


  • William C. Wheaton
  • Lawrence Rossoff


A recently constructed data series suggests that the hotel industry has experienced two rather large building booms from 1969 to 1994. By contrast, hotel demand seems to move closely with the United States economy, at a much higher cyclic frequency. Occupancy and room rental rates follow the slower movements in supply. A structural model is estimated over this series which displays long lags between occupancy and room rental rate changes, as well as between room rental rates and new supply. These lags create a system of difference equations that is close to being dynamically unstable. Forecasting forward with smooth economic growth, yields a new and even larger future building boom.

Suggested Citation

  • William C. Wheaton & Lawrence Rossoff, 1998. "The Cyclic Behavior of the U.S. Lodging Industry," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 26(1), pages 67-82, March.
  • Handle: RePEc:bla:reesec:v:26:y:1998:i:1:p:67-82
    DOI: 10.1111/1540-6229.00738

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    Cited by:

    1. Maier, Gunther & Herath, Shanaka, 2009. "Real Estate Market Efficiency. A Survey of Literature," SRE-Discussion Papers 2009/07, WU Vienna University of Economics and Business.
    2. William C. Wheaton, 1999. "Real Estate “Cycles”: Some Fundamentals," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 27(2), pages 209-230, June.
    3. Hyunduk Suh & Sung-Bum Kim, 2018. "The Macroeconomic Determinants of International Casino Travel: Evidence from South Korea’s Top Four Inbound Markets," Sustainability, MDPI, Open Access Journal, vol. 10(2), pages 1-18, February.
    4. Eli Beracha & William G. Hardin & Hilla Maaria Skiba, 2018. "Real Estate Market Segmentation: Hotels as Exemplar," The Journal of Real Estate Finance and Economics, Springer, vol. 56(2), pages 252-273, February.

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