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U.S. hotel recovery may slow:
EDITOR'S NOTE
| November 22nd, 2010 |
| e-forecasting.com eNews for the Hotel Industry |
DURHAM, New Hampshire — HIP
continued to fall in October, according to e-forecasting.com in
conjunction with STR. After a decline of 0.4% in September, HIP
went down 0.3% in October.
HIP, the Hotel Industry Pulse
Index, is a composite indicator that gauges business activity in
the United States hotel industry in real-time, similar to a gross
domestic product measure. The latest monthly change brought the
index to a reading of 89.2. 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 deteriorate. During October, the six-month growth rate went up
10.9%, after increasing 13.3% in September. 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
GDP.
“For the second month in a row, U.S. hotel
performance metrics have shown an increase while the underlying
economic data has stalled. The data is still not at a level where
we are concerned about a slowdown in the near term," said Chad
Church, director, special services at STR.
The probability
of business expansion in the hotel industry was at 96.1% in
October, slightly lower than September's reading of 97.2%.
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 that captures current
conditions. 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: revenue 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.
Story Highlights
- The current HIP reading is 89.2. The index
was set to equal 100 in 2000.
- HIP fell by 0.4% during September.
- The probability of business expansion in the hotel industry was
96.1% in October, down from 97.2% in September.
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