Overbuilding is a term we used to hear a lot in the context of the lodging business. Then we started hearing it a lot in the context of the cruise business. Now the hotels are at it again.

There's a cause-and-effect thing going here. The last hotel building boom ended in a bust when a surplus of rooms coincided with the Gulf War, a recession and a fall-off in real-estate values. Investors stayed away from the hotel industry while demand caught up with supply, which it began to do in the early 1990s.

Fueled by record profits in the mid-1990s, new construction starts in the hotel business soared to record highs, totaling 465,000 construction starts between 1997 and 1999. But that pesky law of supply and demand just won't go away. As those opening days approach, PricewaterhouseCoopers is predicting that revenue per available room next year will show its weakest growth since 1992.

So what do travel agents need to know about the lodging industry's little roller coaster? We made a list.

First, you could be a passenger. Second, hotel companies are being told by various Web wonks and analysts that they lag behind the airlines in using the Internet to broaden their distribution and to move excess inventory. Third, it is against this background that Bass, Cendant, Hilton, Hyatt, Marriott and Starwood are putting together a joint Web site to provide them with what they call "more efficient distribution on line." Hilton International, Accor and Forte are doing the same thing in Europe for the same reasons. Fourth, no matter which way the roller coaster goes from here, those Web sites won't go away.

We suspect a large number of travel agents won't go away either, but we also suspect that they're getting tired of being jerked around. It's no fun running a business with your arms up in the air, screaming.

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