Culinary Migration ’ chronicles cases of big names in the food world exiting large cities for the countryside and beaches . The potential consequence - if you did not move from the big city and favor fine dining you may need to take a road trip . For the hotel segment , cases can be made that the long-term effects of recent migrations could be either negligible ( i . e ., business as usual ) or substantial . I began researching this topic with the belief that the demand mix for hotels – locations , room rate segments , and purpose of stay – will be noticeably altered coming out of the pandemic . My mind was changed a little after examining the empirical evidence although the prevailing trends and theory still signal that my initial predictions could be correct in the long run .
Theory tell us that ….
Migration inside the borders of the U . S . since mid-2020 has taken two general forms – state-to-state ( STS ) and high density-to-lower density ( HDLD ). Some overlap exists across the two forms although for simplicity STS relocations are defined here to involve long distance moves and HDLD moves within the same MSA , nearby ( e . g ., moves from Manhattan to New Jersey are HDLD ), and to rural locations . To understand whether the recent trends will continue or possibly operate in reverse some longstanding economic theories from urban economics offer guidance . Theory can be both painful to digest and helpful for making sense of situations encountered during one ’ s professional life that are otherwise confusing . The effects on hotel markets of the well-publicized moves of households and businesses during 2020-21 presents one of these situations .
Theory of STS Moves – Sixty-five years ago Charles Tiebout presented a hypothesis linked by a series of assumptions to competitive market theory . 1 Simply stated , his idea is that many political jurisdictions exist with different collections of public services and tax structures . Consumers of these services and payers of associated taxes will relocate to get the best deals ( i . e ., popularly referred to as ‘ voting with your feet ’). The hypothesis could explain both STS and HDLD relocations but given the imbalance of taxes and growing availability of privately produced services ( e . g ., private and quasi-private charter schools ) the explanation nicely fits with household and business STS moves from high tax to low tax states . The migration trend toward lower tax jurisdictions began before COVID-19 and before limitations on SALT deductions . Nevertheless , it is commonly held by commentators and researchers that the pandemic heightened the trend . The prediction coming out of theory for the post-pandemic era is that the steeper trend line will continue if large statewide public services / tax liability imbalances persist , and technology driven work anywhere adoption continues . Both seem likely !
Theory of HDLD Moves – The tradeoff between transportation costs and rents ( and housing costs ) is an important concept in urban economics for understanding how the land use patterns of cities change . Richard Muth was one of the pioneer model builders who refined this tradeoff . 2 Earlier , econ-
THE SURPRISINGLY GRADUAL ADOPTION OF VIDEOCONFERENCING SUDDENLY SPRING BOARDED DURING THE COVID-19 PANDEMIC AND ARGUABLY SERVES AS THE FOUNDATION FOR THE RISE OF WORKING HOURS IN LESS DENSE LOCATIONS THAN CITY CENTERS .
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