Hotels in New York City frequently experience an average vacancy rate of about 20 percent (i.e., on an average night, 80 percent of the hotel rooms are full). This kind of excess capacity is indicative of what kind of market?

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A high vacancy rate (i.e., excess capacity) suggests that there is a lot of competition among hotels, as they are unable to fully exploit their capacity due to the availability of alternatives. This is a characteristic of a monopolistically competitive market. Monopoly, perfect competition, and oligopoly markets are all unlikely to have high vacancy rates.

Hotels in New York City Frequently Experience an Average Vacancy