Hotel Industry Pulse Index edges upward:
|March 15th, 2010
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
The Hotel Industry Pulse Index (HIP) posted a slight recovery in
February, according to economic research firm e-forecasting.com in
conjunction with STR. After edging down 0.5 percent in January, HIP
improved 1.3 percent in February.
is a composite indicator that gauges business activity in the U.S.
hotel industry in real-time, similar to a gross domestic product
measure for the industry. The latest monthly change brought the
index to a reading of 82.5. 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, improved
from the previous month, going back into positive territory with a
reading of 0.8 percent compared with negative 3.0 percent in
January. During the worst of the hotel industry recession last
March, the six-month growth rate hit negative 23.4. This compares
with a long-term annual growth rate of 3.2 percent, the same as the
38-year average annual growth rate of the industry’s gross domestic
“This report really takes the same cue as the last few
months, and recovery will be a bumpy ride,” said Maria Simos, CEO
of e-forecasting.com. “One month of decline, as we saw last month,
should not become too worrisome as there tends to be this back and
forth while the industry finds its way out of recession.
“Looking at the 6-month growth rate, we see the industry is in fact
pulling through, but this by no means a guarantee that it will be
smooth sailing from here on out,” Simos said. “Taking a cue from
the Hotel Industry Leading Indicator, which typically leads
activity in the hotel industry by about five to six months, we do
expect to see a leveling in HIP growth after the summer. We will
become more confident with this statement if the upcoming readings
of the HIL verify the downward trend our last January report
The probability of business expansion
increased to 99.2 percent in February, an improvement from
January's reading of 93.7.
The Hotel Industry Pulse Index
is an 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, HIP 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.