What is Pent-up Demand?
Pent-up demand is the demand that has been building up over time, due to factors such as lack of supply, restrictions on availability, or a change in consumer behaviour that has been caused by external factors. It is a phenomenon that can be observed in many different industries and markets, including retail, hospitality, travel, and leisure.
How Does Pent-up Demand Occur?
Pent-up demand occurs when there is an increase in the demand for a product or service, but the supply is unable or unwilling to meet that demand. This can be due to a variety of reasons, such as an increase in costs, lack of resources, or government regulations. In many cases, pent-up demand can be seen as an indication that the market is ready for a product or service, and can be used as an opportunity to capitalize on the situation.
Examples of Pent-up Demand
- Retail: When a popular item is out of stock, people may wait until it becomes available again and buy multiple items at once.
- Hospitality: When hotels or restaurants are closed due to COVID-19, people may book their reservations as soon as they become available.
- Travel: When travel restrictions are lifted, people may book trips to places they have been wanting to visit.
- Leisure: When a new theme park opens, people may flock to the park to be one of the first to experience it.
Conclusion
Pent-up demand is a phenomenon that can be observed in many different industries, and is often an indication of an opportunity to capitalize on the situation. By understanding what causes pent-up demand, and how it can affect the market, companies can use this information to their advantage.References:
- https://www.investopedia.com/terms/p/pentup-demand.asp
- https://www.investopedia.com/articles/investing/063015/how-understand-and-capitalize-pentup-demand.asp
- https://www.businessnewsdaily.com/8587-pent-up-demand.html