Monday, May 7, 2018

Nashville's hotel rates will likely drop this year. Here's why.

Nashville's hotel rates will likely drop this year. Here's why.  The "why" is very, very simple. It is supply and demand. As demand for hotel rooms increases (or

demand for wheat or hookers or coal or labor or money or anything) prices are bid up, when prices rise, suppliers will see opportunity and increase supply. When excess supply is available, prices will drop. Demand and supply are never in perfect equilibrium but are always tending toward equilibrium. This applies to everything except when the government interferes and thinks it knows better than the market. This is basic Economics 101.

This law of supply and demand is as true as the law of gravity. If more liberals understood economics, we would have fewer liberals. It takes a while to bring a new hotel on line but some things, such as the cost of an Uber fare works almost in real time. If more people want to use Uber than there are Uber drivers working, the price of an Uber ride will increase. Some part-time Uber driver will see that fares have risen and decide to go to work.

This article reports that, "more than two dozen large hotels with 100 or more rooms are currently under construction downtown, near the airport, and in outlying areas like Goodlettsville and Green Hills. At least 41 more are in various stages of planning throughout Davidson County."

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