Demand
Two parts of the market
In any commercial market, we recognize:
- The supply side and
- The demand side
We do have some more information on revenue from the rooms; for the other sources of income like banqueting and food and beverage we do not have this kind of information. But, using some logics, we can estimate the market situation there; like the market demand for banqueting and market demand for food and beverage.
Supply
At the starting situation in the city, there are approximately 10 hotels each offering 100 rooms for 364 days (the rounded down number of days) in a year.
So, the total of possible nights to book offered on the market is 10 hotel x 100 rooms x 364 days in a year = 364,000 available room nights per year in the city. This is the total inventory or capacity in each 'market', each city.
The supply side is not likely to change dramatically over the years to come; the hotels will keep on offering their 100 rooms during the 364 days.
Demand
The total demand is the total number of room nights asked for in the market. The occupancy rate of all ten hotels on taking over the Emerald Forest, is around 50%. So the total of the market 'demand' is 50% of 364,000 available room nights; so 182,000 in total.
Due to the fact that there is an oversupply in the market, there is an overcapacity. All the hotels active in the city together, offer more room capacity than there is demand in a year. Though, there is the effect of seasonality; these numbers are averages across an entire year.
Changes on the demand site
Market research companies, like Top Research, research developments in the hospitality market. An extended report, which is accurate, can be bought each year. The total demand in any market will also differ due to activities of the hotels in that specific market.
More information is available at many sources, sometimes for free, like:
- Performance of US hotel industry
- Trivago, one of the aggregators, predictions
- Research center Cornell
