Can the Demand Problem be Fixed? The Effect of Economic Crisis on the Lodging Sector of the Tourism Industry.

While hospitality started with small inns and bed and breakfasts run out of a family\u27s home, the first hotel was a 73-room property in New York City, which was astronomically larger than consumers were accustomed to, (Withiam, 2000, p. 2) and is considered small by today\u27s standards. Throughout life, at one point or another, most have stayed at a bed and breakfast, timeshare, motel, or hotel. Most enjoy the experience, but few realize what happens to lodging properties when there is an economic downturn. During times of economic crisis, families and businesses tend to spend more time controlling expenses, which often results in cuts in travel. Economic crisis is considered to be a time of two or more continuous quarters of recession, which is decreasing gross domestic product. This leads one to question how major economic crises of the past one hundred years have affected and changed the lodging sector of the tourism industry into what it is known to be today. Periodic economic crises and changes to regulatory policies and tax policies have led to an overabundance of supply and lack of demand during these times, which has forced the industry to change and adapt throughout the years. An extensive literature review of selected works covering the 20th and 21st centuries will be conducted. Specific geographic cases will also be examined, which will lead the researcher to a set of propositions with respect to possible new lodging business models