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Adding More Supplies to Current Lodging Industry --- Is It a Threat or an Opportunity?

In today’s class, a student presented a January 19th’s article in New York Times. According to this article, almost 100 new hotels are scheduled to open in the U.S. in 2010. New York City alone will add 46 more properties. While hoteliers are already struggling to fill their existing rooms, why will developers add more supplies to the market?

Students recognized the market’s “hysteresis effect”--- many of these hotels were under construction before 2008 when the market had an occupancy rate of 85%. Thus, the recession will not stop the supplies until 2011 or after. Students wondered how this “hysteresis effect” would affect their career opportunities when they graduate and enter the job market in 2011 and beyond.

Recession seems a threat to many people because it is often associated with fewer demands in a more competitive market. However, I argue recession could also bring a life-time opportunity to us. How so? When everyone is trying to sell everything in the market, developers may be able to find the cheapest estate, negotiate with the lowest construction price, and attract the most talented employees who have been laid off for months. Customers may also find the best hotel and vacation deals.

I understand why students worry about their future in a job market like this. I know how difficult to secure a job offer these days (I was in the market 8 months ago). I see the opportunities for my students because they have already noticed the challenges and want to prepare themselves for the future. In order to conquer difficulties, people work harder and become more creative, which pushes the “good students” to become “the best students/candidates.” The opportunities will seek the best students who work hard in school and at work, build on their strengths and leadership, and exceed their potentials. I hope the recession will end soon, but it is up to you to decide whether it is a threat or an opportunity.

References:
New York Times: http://www.nytimes.com/2010/01/19/business/19hotels.html?pagewanted=print
Picture was copied from http://www.palomar.edu/counseling/careercenter/LocalCareerFairs/home.htm.

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