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Hotel Inventory Tightens, Change Will Affect Barter Industry's Inventory

Travel is on the upswing four years after 9/11. And demographic trends ahead for leisure travel are bullish too, as baby-boom retirees will presumably increase their travel in the coming years.

Couple this heightened demand with the expected tighter supply of hotel accommodations (as many hotels are being converted to condominiums to cash in on the boom in that sector), and the lodging industry is now looking quite solid.

The travel turnaround isn’t necessarily creating a lot of optimism within the barter industry, because acquiring more hotel accommodations revolves around picking up excess inventory.

Given the shrinking supply of hotel rooms in New York, Hawaii and other resort markets, along with the fact that it takes a considerable amount of time to get approval for any major new hotel project, one can project that the hotel industry is feeling pretty good now. But greater occupancy might lead to less desirable inventory on a trade basis.

For hoteliers, the fly in the ointment may come from rising interest rates causing possible repercussions from a economic recession. Or a drop in real estate prices could create a less prosperous mindset for homeowners, and would likely see curtailed spending on travel.