Hotel Business Activity Still on a Plateau
Business activity in U.S. hotels rose to a reading of 112.8 in November according to the latest reading of the Hotel Industry's Pulse (HIP) indicator. e−forecasting.com's HIP - a composite indicator that gauges monthly overall business conditions in the U.S. hotel industry - climbed by 0.2% in November after a decline of 0.1% in October. The index is set to equal 100 in 2005.
HIP's six-month growth rate, which has historically confirmed the turning points in U.S. hotel business activity, posted a positive rate of 0.9% in November, following a positive rate of 0.8% in October. This compares to a long-term annual growth rate of 3%, the same as the 40-year average annual growth rate of the industry's gross domestic product.
The probability of the hotel industry being in recession, which is detected in real-time from HIP with the help of sophisticated statistical techniques, registered 17.8 % in November, down from 18.0% reported in October. When this recession-warning gauge is near or passes the threshold probability of 50%, the U.S. hotel industry has entered a recession.
"Following two months decline, business activity for US hoteliers rose modestly last month," said Maria Sogard, CEO of eforecasting.com. "Looking at long-term annual growth rates, the six-month annual growth rate - which confirms recessions when it crosses the zero line - registered a reading of 0.9% in November, staying on a declining trend since," Maria added.
Two of the three demand and supply indicators of current business activity that make up Hotel Industry's Pulse (HIP) Index had a positive contribution to its change in November: Spending on Hotels and Hotel Capacity. The current business activity indicator which had a negative or zero contribution to HIP's change in November was Hotel Jobs.
"In the last twelve months - November 2013 to November 2014 - overall economic activity, measured by e-forecasting.com's monthly U.S. GDP - rose by 2.1%. Over the same period, economic activity in U.S. Hotels, measured by HIP, increased by 1.8%." Maria added.
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e-forecasting.com, an international economic research and consulting firm, offers forecasts of the economic environment using proprietary, real-time economic indicators to produce customized solutions for what's next. e−forecasting.com collaborates with domestic and international clients and publications to provide timely economic content for use as predictive intelligence to strengthen its clients' competitive advantage.
The Hotel Industry Pulse, or U.S.-HIP for short, is a hotel industry indicator that was created to fill the void of a real-time monthly indicator for the hotel industry that captures current conditions. The indicator provides useful information about the timing and degree of the industry's link with the US business cycle for the last four decades. Simply put, it tracks monthly overall business conditions in the industry, like an industry GDP, and points in a timely way to the changes in direction from growth to recession or vice versa. The composite indicator is made with the following components: revenues from consumers staying at hotels and motels adjusted for inflation, room occupancy rate and hotel employment, along with other key economic factors which influence hotel business activity. HIP indicators are also available for the United Kingdom and Germany.
The US hotel industry leading indicator, or U.S.-HIL for short, is a monthly leading indicator for the industry. Building off the tracking success of HIP, the real-time indicator for the U.S. hotel industry, U.S.-HIL was built as a composite indicator that uses nine different components that, on average, when put together have led the industry four to five months in advance of a change in direction in the industry business cycle. U.S.-HIL provides useful information about the future direction of the U.S. hotel industry. HIL indicators are also available for the United Kingdom and Germany.
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