Hotel Industry Leading indicator shows signs of life:
|June 22nd, 2010
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire — The U.S. Hotel Industry Leading indicator, or
HIL, went up 1.5 percent during May, the fourth monthly increase
after a slight dip in January's reading, according to economic
research firm e-forecasting.com in conjunction with STR.
is monthly composite leading indicator that, on average, leads the
industry’s business activity four to five months in advance. The
latest increase brought the index to a reading of 113.5. The index
was set to equal 100 in 2000.
The index’s six-month growth
rate, a signal of turning points, went up by an annual rate of 10
percent during May after increasing 8.8 percent during April. This
compares to a long-term annual growth rate of 3.5 percent, the same
as the annual growth rate of the country’s overall economic
activity. During the deepest point of the recession in January
2009, this growth rate was down to negative 15.7 percent.
Eight of the nine components that make up Hotel Industry Leading
indicator had a positive contribution during May: Weekly Hours in
Hotels; Hotel Profitability; International Visitors Future Demand;
Interest Rate Spread; New Orders for Manufactured Goods; Oil
Prices; Housing Activity and National Vacation Barometer. Only one
of the nine components had a negative or zero contribution to HIL
in May: Labor Market Tightness.
this month of the positive effects of lower energy prices, an
advance in manufacturing activity and increased hours in the hotel
industry had a robust effect on the hotel industry leading
indicator in May,” said Maria Simos, CEO of e-forecasting.com.
“This impact has made a slight turnaround in the slowing of the
six-month growth rate and gives us pause to make any definitive
comments on an upcoming turning point in the indicator. The next
few months will be very important to watch with the leading
The U.S. 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.
The indicator provides useful information about the future
direction of the U.S. hotel industry.