US hotel business activity losing steam:
|August 24th, 2011
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
The U.S. Hotel Industry Leading indicator decreased 0.6% during
June after going up by the same amount in May, according to
economic research firm e-forecasting.com.
The U.S. Hotel
Industry Leading indicator, or HIL, is a monthly leading indicator
for the U.S. hotel industry that, on average, leads the industry’s
business activity four to five months in advance. The latest
monthly change brought the index to a reading of 115.9. The index
was set to equal 100 in 2000.
HIL’s six-month growth
rate, a signal of turning points, was 1.7% in June, nearly half its
rate of 3.2% in May. This compares to a long-term annual growth
rate of 3.5%, the same as the annual growth rate of the industry's
overall business activity.
Five of the nine components that
make up Hotel Industry's Leading Indicator had a positive
contribution in June: Labor Market Tightness; Hotel Profitability;
Interest Rate Spread; New Orders for Manufactured Goods and Oil
Prices. Four of the nine components had a negative or zero
contribution to Hotel Industry's Leading Indicator in June: Weekly
Hours in Hotels; International Visitors Future Demand; Housing
Activity and National Vacation Barometer.
“Although as we
reported this week the US hotel industry has recently been
outshining the U.S. economy, it appears that leading indicators are
pointing to a turn down ahead," commented Maria Simos, CEO of
e-forecasting.com. "Of note, the two components that cover tourism
demand both contributed negatively. Each tourism marketing dollar
spent will be of utmost importance to work to stave off some of the
negative forces impacting tourism."
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 industry.