Hotel Forecast News: e-forecasting Press Release for the Hotel Industry in US Europe and Global Markets

US hotel business activity up in July:

EDITOR'S NOTE

DURHAM, New Hampshire — Business activity in U.S. hotels rose in July according to the latest reading of the Hotel Industry Pulse indicator.

The 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 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 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."

Two of 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 Hotels.

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%.”

The 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.