NEWS & MEDIA
HIP: US hotel recovery outpacing economy:
|January 5th, 2012
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
Business activity in the U.S. hotel sector increased during
November, according to the latest reading of e-forecasting.com’s
Hotel Industry Pulse index.
The Hotel Industry Pulse index,
or HIP, is a composite index that gauges monthly overall business
conditions in the U.S. hotel industry. It rose to a reading of
106.4 in November, following an increase of 0.4 % in October. The
index was 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, had a positive rate of 5.2% in November,
following a positive rate of 5.4% in October. This compares to a
long-term annual growth rate of 3%, the same as the 30-year average
annual growth rate of the industry's gross domestic product.
The probability of the hotel industry entering into recession,
which is detected in real-time from HIP with the help of
sophisticated statistical techniques, registered 7.7 % in November,
up from 7.1% reported in October. When this recession-warning gauge
passes the threshold probability of 50%, the U.S. hotel industry
enters a recession.
“While business activity has slowed
for hotels in the U.S., it appears the year will close out with
little risk of an upcoming recession,” said Evangelos Simos, chief
economist of e-forecasting.com.
Two of the three demand and
supply indicators of current business activity that constitute HIP
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.
Continues Dr. Simos, “In the last
12 months (November 2010 to November 2011) overall economic
activity, measured by e-forecasting.com's monthly U.S. GDP, rose by
1.7%. Over the same period, economic activity in U.S. Hotels,
measured by HIP, increased by 6.4%."
The Hotel Industry
Pulse index, or HIP for short, is a hotel industry index that was
created to fill the void of a real-time monthly index for the hotel
industry that captures current conditions. The index 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
index 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