Hotel Industry Leading indicator loses steam:
|July 25th, 2011
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire — The
U.S. Hotel Industry Leading indicator fell 0.6% during June after
going up by the same amount during May, according to economic
research firm e-forecasting.com.
The 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
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
“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.