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

Hotel industry risk of recession at 99.2 percent:

EDITOR'S NOTE

DURHAM, New Hampshire —  Economic research firm e-forecasting.com in conjunction with STR announced that following a decline of 2.9 percent in January, HIP went down 2.1 percent in February. HIP, the Hotel Industry's Pulse index, is a composite indicator that gauges business activity in the U.S. hotel industry in real-time. The latest decrease brought the index to a reading of 88.3. The index was set to equal 100 in 2000.
     
Looking at HIP's six-month growth rate, which historically has signaled turning points in U.S. hotel business activity, HIP went down by an annual rate of 18.8 percent in February, further worsening January’s 17.2 percent decline. This compares to a long-term annual growth rate for the hotel industry indicator of 3.2 percent, the same as the 40-year average annual growth rate of the industry's gross domestic product.     

“February marked the 16th month of recession for the hotel industry,” said Maria Simos, CEO of e-forecasting.com. “By looking at the six-month growth rate, we can see that although the industry is in a recession, the current situation is still not quite as bad as what the industry felt in late 2001 and early 2002.”

With the risk of recession being 99.2 percent in February, the odds of business expansion in the hotel industry were just 0.8 percent in February, slightly better than January’s dismal reading of 0.3 percent. Chad Church, manager of industry research at STR, added, “Given the outlook for both the hotel industry and the overall economy in the near-term, expect to see continued declines in the HIP index in the coming months.”

The Hotel Industry Pulse 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. What the indicator does is provide useful information about the timing and degree of the industry’s linking with the U.S. business cycle for the last 40 years. 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 that influence hotel business activity.