Last weekend my parents came to visit DC. They stayed at a luxury hotel downtown for under $100 per night (thanks to Hotwire). In my travels and experience, I've found that DC has some very low hotel rates if you travel on the right dates. In fact, before I moved I stayed at a couple of very nice DC hotels and never paid more than $85 (plus tax) per night for that privilege. It does raise an interesting question though. How can DC, a city which has unbelievably expensive housing, also offer some of the lowest hotel rates around?

(from Dan_DC on Flickr)

The simple answer is supply and demand. DC's hotel market seems to be primarily event driven. There are enough rooms scattered across the city to cover huge events, but on days when there aren't events? Well, there's tons of vacancy and prices are really low.

Demand for DC's hotel rooms tends to fluctuate based on factors like the day of week, time of year, and what events are happening around town. Demand for living in the city, on the other hand, tends to remain relatively constant. Yes, there are seasonal interns and others that look for housing around the same time each year, but in general, demand is strong all the time.

Like trying to find a hotel room during the Cherry Blossom Festival or a giant political rally, finding a decent in apartment in the city is difficult and expensive. The extremely tight rental market more or less guarantees you'll be paying top-dollar. There are no "deals" or "specials" or guarantees at all. I'll be getting into more details about this in the coming weeks, as I've been thinking a lot about these issues recently. But suffice to say, if we can learn anything from DC's hotel market, it's that supply and demand really does influence the prices we pay.