Hotels in Sydney observe that on most nights, about 80 per cent of their rooms are occupied, with the remainder being empty.This kind of excess capacity is indicative of what kind of market?

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The excess capacity and competition among hotels in Sydney suggest a monopolistically competitive market, where multiple firms offer differentiated products (different types of rooms, amenities, etc.) but face some level of competition. The fact that 80% of rooms are occupied on most nights suggests that demand is relatively stable, but there is still some excess capacity that is not being utilized. This is common in monopolistically competitive markets where firms must offer a variety of options to attract customers, but cannot fully utilize their capacity due to competition.

Hotels in Sydney Observe That on Most Nights, About 80