HIP: US hotel industry starts 2011 strong:
|February 21st, 2011
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
After an increase of 0.2% during December, the Hotel Industry Pulse
Index went up 0.9% during January, according to economic research
firm e-forecasting.com in conjunction with STR.
Industry Pulse Index, or HIP, is a composite indicator that gauges
business activity in the United States hotel industry in
real-time—similar to a GDP measure for the industry. The latest
monthly change brought the index to a reading of 90.7. 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, reversed course and increased compared to
the previous month. The six-month growth rate during January
was 8.2%, an improvement over December's reading of 7.8%. It
is useful to benchmark against the long-term growth rate of
3.2% as it is the same as the 38-year average annual growth
rate of the industry's gross domestic product.
“January is the first time the Hotel Industry
Pulse Index broke the level of 90 since December 2008. The
month also witnessed a rebound in the index’s six-month
growth rate, as the deterioration stopped and increased over
December,” said Maria Simos, CEO of e-forecasting.com.
The probability of business expansion in the hotel
industry was at 99.4% in January, which was higher than
December's reading of 98.2%.
The Hotel Industry
Pulse Index, or HIP for short, was created to fill the void
of a real-time monthly indicator for the hotel industry. The
index 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 hotel 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.