Probability of US hotel recession rises in August:
|September 20th, 2011
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
Future business activity in U.S. hotels went down in August,
according to the latest reading of e-forecasting.com's Hotel
Industry Leading indicator.
The Hotel Industry Leading
indicator, or HIL, is a composite leading indicator that, on
average, leads the U.S. hotel industry’s business activity four to
five months in advance. The measure edged down 0.3% in August to
100, following an increase of 1% in July. The index was set to
equal 100 in 2005.
HIL's six-month growth rate, which has
historically confirmed the forthcoming turning points in U.S. hotel
business activity, posted a positive rate of 2.4% in August,
slowing from July's rate of 3.3%. 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.
probability of the hotel industry entering into recession in the
near-term, which is detected in real-time from HIL with the help of
sophisticated statistical techniques, registered 12% in August, up
from 1.8% reported in July. When this recession-warning gauge
passes the threshold probability of 50% for a more than three
months, the U.S. hotel industry will enter a recession phase in its
“Although the U.S. hotel industry continues
to outperform the overall economy, we can see in the full August
HIL report that consumers are really starting to worry about the
stability of the economy and that it is starting to drag on hotels.
The component that pulled down the HIL the most in August was the
domestic vacation barometer. Consumers are scared and will be less
likely to book travel,” said Maria Simos, CEO of e-forecasting.com.
Three of the forward looking indicators of business
activity that comprise HIL had a positive contribution to its
change in August: Yield Curve, Oil Prices and Housing Activity. Six
indicators of future business activity had a negative or zero
contribution to HIL's change in August: Jobs Market; Hotel Worker
Hours; Hotel Profitability; Foreign Demand; New Orders and Vacation
The US hotel industry leading indicator, or HIL
for short, is a monthly leading indicator for the industry.
Building off the tracking success of HIP, the real-time indicator
for the U.S. hotel industry, HIL was built as a composite indicator
that uses nine different components that, on average, when put
together have led the industry four to five months in advance of a
change in direction in the industry business cycle. HIL provides
useful information about the future direction of the U.S. hotel