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US Hotel Business Gains Momentum

Business activity for US hoteliers rose to a reading of 120.0 in November according to today’s release of the Hotel Industry’s Pulse (HIP) indicator.  e−forecasting.com’s HIP – a predictive analytic which gauges monthly overall business conditions for hotels earlier than any industry indicator – climbed by 0.2% in November after an increase of 0.2% in October.  The index is set to equal 100 in 2010.

Graph - Hotel Industry Pulse November 2017HIP’s six-month growth rate, which has historically confirmed the turning points in US hotel business activity, posted a positive rate of 2.2% in November, following a positive rate of 2.1% in October. This compares to a long-term annual growth rate of 2%, the same as the 40-year average annual growth rate of the industry’s gross domestic product.

“In the last twelve months – November 2016 to November 2017 – overall economic activity, measured by e−forecasting.com’s monthly US GDP – rose by 2.7%.  Over the same period, economic activity in US Hotels, measured by HIP, increased by 2%.”, said Maria Sogard, CEO of e­forecasting.com.

Two of the three demand and supply indicators of current business activity that make up Hotel Industry’s Pulse (HIP) Index had a positive contribution to its change in November: Total Spending on Hotels (includes non-room revenues) and Hotel Capacity.  The current business activity indicator which had a negative or zero contribution to HIP’s change in November was Hotel Jobs.

“The probability of the hotel industry being in recession, which is detected in real-time from HIP with the help of sophisticated statistical techniques, registered 17.3 % in November, down from 18.1% reported in October,” said Evangelos Otto Simos, Professor at the University of New Hampshire and Predictive Analytics Database Editor for e-forecasting.com. “When this recession-warning gauge is near or passes the threshold probability of 50%, the US hotel industry has entered a recession,” Evangelos added.

About HIP

The Hotel Industry Pulse, 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 link with the US business cycle for the last four decades. 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: revenues 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. 

About e-forecasting.com

e-forecasting.com, an international economic research and consulting firm, offers forecasts of the economic environment using proprietary, real-time economic indicators to produce customized solutions for what’s next. e−forecasting.com collaborates with domestic and international clients and publications to provide timely economic content for use as predictive intelligence to strengthen its clients’ competitive advantage. 

Posted by on January 5, 2018.

Categories: Market Reports

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