US Hotel Activity Continues Fall

Business activity in U.S. hotels declined to a reading of 103.6 in December according to the latest reading of the Hotel Industry's Pulse (HIP) indicator. e−forecasting.com's HIP, a composite indicator that gauges monthly overall business conditions in the U.S. hotel industry, declined to a reading of a reading of 103.6 in December, following a flat performance with a reading of 0% in November. The index is set to equal 100 in 2005.                                                               

HIP's six-month growth rate, which has historically confirmed the turning points in U.S. hotel business activity, had a positive rate of 0.2% in December, following a positive rate of 1% in November. 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.

The probability of the hotel industry entering into recession, which is detected in real-time from HIP with the help of sophisticated statistical techniques, registered 20.5 % in December, up from 16.5% reported in November. When this recession-warning gauge passes the threshold probability of 50%, the U.S. hotel industry enters a recession.

"The hotel industry pulse has had zero or negative growth the last seven months and the probability of recession has increased to 20.5% from a low of 6.4% in May," commented Dr. Evangelos Simos, Chief Economist of e-forecasting.com."

None of the demand and supply indicators of current business activity that constitute Hotel Industry's Pulse (HIP) Index had a positive contribution to its change in December.  The three indicators of current business activity which had a negative or zero contribution to HIP's change in December were Hotel Jobs; Spending on Hotels and Hotel Capacity.

Continues Dr. Simos, "In the last twelve months - December 2011 to December 2012 - overall economic activity, measured by e-forecasting.com's monthly U.S. GDP - rose by 1.8%. Over the same period, economic activity in U.S. Hotels, measured by HIP, increased by 1.7%."

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.                               

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.


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