TY - JOUR
T1 - COVID-19 and Its Effects on Rent Prices for the Hospitality Industry
T2 - An Economic Model for the Rebus Sic Stantibus Clause
AU - Aznar-Alarcón, J.
N1 - Publisher Copyright:
© The Author(s) 2022.
PY - 2024/12
Y1 - 2024/12
N2 - The COVID-19 pandemic made hotels around the world to experience a huge drop in revenues as lockdowns restricted mobility. For many hotel operators, the rent of the building is one of the most important fixed costs. The Rebus Sic Stantibus clause allows judges to rule that changes can be made to the economic conditions of contracts when a supervening event, not foreseen by the parties, causes economic hardship. This paper analyses, considering different market structures and the degree of product differentiation, how the rent for hotel facilities agreed in long-term contracts will change if the clause is applied now, reducing by law current rents.
AB - The COVID-19 pandemic made hotels around the world to experience a huge drop in revenues as lockdowns restricted mobility. For many hotel operators, the rent of the building is one of the most important fixed costs. The Rebus Sic Stantibus clause allows judges to rule that changes can be made to the economic conditions of contracts when a supervening event, not foreseen by the parties, causes economic hardship. This paper analyses, considering different market structures and the degree of product differentiation, how the rent for hotel facilities agreed in long-term contracts will change if the clause is applied now, reducing by law current rents.
KW - equilibrium price
KW - oligopolistic competition
KW - product differentiation
KW - Rebus Sic Stantibus
UR - http://www.scopus.com/inward/record.url?scp=85139436312&partnerID=8YFLogxK
U2 - 10.1177/23210222221119372
DO - 10.1177/23210222221119372
M3 - Article
AN - SCOPUS:85139436312
SN - 2321-0222
VL - 12
SP - 308
EP - 325
JO - Studies in Microeconomics
JF - Studies in Microeconomics
IS - 3
ER -