Hotel Industry Pulse strong in third quarter:
|September 13th, 2010
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
The United States Hotel Industry Pulse Index increased 2.2% during
August after edging up 2.5% during July, according to economic
research firm e-forecasting.com in conjunction with STR.
the Hotel Industry Pulse Index, is a composite indicator that
gauges real-time business activity in the U.S. hotel industry,
similar to a GDP measure. The latest monthly change brought the
index to a reading of 89.9. The index was set to equal 100 in 2000.
HIP's six-month growth rate, which historically has
signaled turning points in U.S. hotel business activity, continued
to improve. After 20 months of consecutive decreases, the rate has
gone up seven consecutive months. August’s 18% increase improved
upon July's growth of 15.2%. This compares with a long-term growth
rate of 3.2%, which is the same as the 38-year average annual
growth rate of the industry's gross domestic product.
“The August Hotel Industry Pulse Index shows that the U.S. hotel
industry remained quite strong in the third quarter," said Maria
Simos, CEO of e-forecasting.com.
Chad Church, director of
special services at STR, added, “The growth in both demand and more
recently, average daily rate, continues to propel the HIP.”
The probability of business expansion remained near the 100% mark
in August, as has been the case since the beginning of the year.
During August, the expansion probability was at 99.9%, negligibly
down from July's reading of 100%.
The Hotel Industry Pulse
Index, 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. The indicator provides useful information about the
timing and degree of the industry’s linking with the U.S. business
cycle for the last 40 years. 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.