GMAT Essays (AWA)

The following appeared in a newspaper story giving advice about investments.
“As overall life expectancy continues to rise, the population of our country is growing increasingly older. For example, over twenty percent of the residents of one of our more populated regions are now at least 65 years old, and occupancy rates at resort hotels in that region declined significantly during the past six months. Because of these two related trends, a prudent investor would be well advised to sell interest in hotels and invest in hospitals and nursing homes instead.”
Discuss how well reasoned... etc.


The author concludes that investing in hospitals and nursing homes would be a better option than investing in hotels and resorts because of the high overall life expectancy of citizens, the percentage of elderly population and the low occupancy rates of hotels and resorts. But the conclusion is unwarranted and is based on unequivocal assumptions.
Firstly, it is mentioned that the life expectancy of people continues to rise. This is majorly due to advances in the field of medicine and better health care. The number of hospitals may already be more than enough to satisfy the needs of the people. Investing in an already competitive field may not be a good option. Also the high life expectancy of people could be attributed to better diet or regular exercise. In this case the demand for hospitals may actually be very less.
It is stated that 20% of the population is over 65 years old. But nothing is mentioned about the population of younger people or people who will be more than 65 years old in a few years. If the percentage of young people is more, then investing in hotels and resorts is always a better option than investing in hospitals.
The data presented is only about the highly populated regions. So we cannot impose a generalized conclusion on all the regions. It is possible that the in other areas of the country, investing in resorts and hotels is a better bet than investing in hospitals and nursing homes.
The author fails to consider other reasons for a drop in the occupancy rates of hotels and resorts. For example- poor service in these hotels or presence of other cheaper and better holiday resorts in the nearby areas.
Thus overall, the argument is weak and it could have been presented in a better way, had the author provided us with the critical data about age distribution. The argument would have been better if the author would have considered other reasons for the mentioned effects and if it was proved that there is a huge demand for hospitals rather than speculating about the demand on the basis of unequivocal claims.