HIL: Recession probability nears threshold:
|October 31st, 2011
|e-forecasting.com eNews for the Hotel Industry
DURHAM, New Hampshire —
The likelihood of future business activity in the U.S. hotel
industry declined in September, according to the latest reading of
e-forecasting.com’s Hotel Industry Leading indicator, or HIL.
HIL, a composite indicator that gauges future monthly overall
business conditions in the U.S. hotel industry, fell by 0.8% during
September to 99.4, following a decline of 0.3% during August. The
index was set to equal 100 in 2005.
The probability of the
hotel industry entering into recession in the near-term, which is
detected in real-time from HIL, registered 44.2% in September, up
from 13.2% reported in August. When this recession-warning gauge
passes the threshold probability of 50% for more than three months,
the U.S. hotel industry will enter a recession phase in its
“The probability of a recession in for the
U.S. hotel industry increased near the threshold of 50% in
September,” said Maria Simos, CEO of e-forecasting.com. “The rule
of thumb is that if this probability shoots over the threshold of
50 for three months, then a recession is imminent.”
six-month growth rate, which has historically confirmed the
forthcoming turning points in U.S. hotel business activity, posted
a positive rate of 0.8% in September, following a positive rate of
2.8% in August. This compares to a long-term annual growth rate of
3%, the same as the 30-year average annual growth rate of the
industry's gross domestic product.
Three of the forward
looking indicators of business activity that comprise Hotel
Industry Leading (HIL) Indicator had a positive contribution to its
change in September: Hotel Profitability; Yield Curve and Oil
Prices. Six indicators of future business activity had a negative
or zero contribution to HIL's change in September: Jobs Market;
Hotel Worker Hours; Foreign Demand; New Orders; Housing Activity
and Vacation Barometer.
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.