[lmm]

> In some places there's literally no space - Venice for example, land is expensive and it's such a historic city that you can't just build a skyscraper (nobody would give you permission). This is the point about them being at capacity. In summer everywhere is booked. The argument is that lack of beds stifles demand, but then you can barely walk round Venice in high season. It's not about hotel capacity, it's the capacity of the city infrastructure itself. Venice has no land for hotels, or anything else!

In an efficient market everything operates at capacity. That doesn't mean there's no ability to adjust. In the absence of the cruise ships there'd be more demand for hotels, driving up prices; land values would go up, pricing more of the locals out. Restaurants and homes would be converted into tourist accommodation. Pressure would mount to relax the building regulations - not around the unique tourist attractions, but in the backstreets where it could be argued that there wasn't such unique architectural merit. And most important of all, fewer people would get to see Venice.