Markets and tracts are created based on what two determining factors?

The correct choice focuses on the key elements that create markets and tracts within the hospitality industry. Specifically, the number of hotels in a given area directly influences market dynamics. A higher concentration of hotels can indicate a more competitive market, whereas areas with fewer hotels may be less saturated.

Participation refers to the level of engagement from hotels and other stakeholders within that market. This includes factors such as hotel occupancy rates, revenue per available room (RevPAR), and overall market performance. Together, these two factors—number of hotels and participation—shape the commercial landscape of a particular market or tract, dictating how businesses operate and attract customers.

In contrast, other answer choices include elements like geographic size and population, which, while relevant to some degree, do not directly address the specific market dynamics at play within the hotel industry, such as competition and participation levels. Thus, the combination of the number of hotels and participation is essential for accurately defining and understanding market and tract structures in this field.