US hotel business activity up in July:
|August 10th, 2011
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
Business activity in U.S. hotels rose in July according to the
latest reading of the Hotel Industry Pulse indicator.
Hotel Industry Pulse indicator, or HIP, is a composite indicator
that gauges monthly overall business conditions in the U.S. hotel
industry. The indicator climbed by 1.7 % in July to 103.1 following
an increase of 0.7 % in June. The index was set to equal 100 in
HIP's six-month growth rate, which has historically
confirmed the turning points in U.S. hotel business activity, had a
positive rate of 10.3% in July following a positive rate of 8.1% in
June. 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 7.2 % in July, up from
7.0% reported in June. When this recession-warning gauge
passes the threshold probability of 50%, the U.S. hotel
industry enters a recession.
"So far this year, it
looks like the hotel industry is in a safe zone without any
major risk of recession in the near term," said Evangelos
Simos, chief economist of e-forecasting.com."
the three demand and supply indicators of current business
activity that constitute HIP had a positive contribution to
its change in July: Hotel Jobs and Hotel Capacity. The
current business activity indicator which had a negative or
zero contribution to HIP's change in July was Spending on
Continued Simos, “In the last twelve months
- July 2010 to July 2011 - overall economic activity,
measured by e-forecasting.com's monthly U.S. GDP - rose by
1.4%. Over the same period, economic activity in U.S.
Hotels, measured by HIP, increased by 7.2%.”
Hotel Industry Pulse, or 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.