Market Report U.S.

Predictive Analytics Point to 50% Probability for Recession

Hotel Industry Real-Time Indicator - HIL - Report on Current Business Activity

Future business activity in U.S. hotels declined in May according to the latest reading of the Hotels' future business conditions (HIL) indicator. e−'s HIL, a composite indicator that gauges future monthly overall business conditions in the U.S. hotel industry, fell by 0.1% in May to 127.1, following a decline of 0.1% in April. The index is set to equal 100 in 2010.

Graph - Hotel Industry Real-Time Indicator May 2016Looking at HIL's six-month growth rate, which has historically confirmed the forthcoming turning points in U.S. hotel business activity, posted a positive rate of 0.1% in May, following a positive rate of 0.4% in April. This compares to a long-term annual growth rate of 2%, 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 in the near-term, which is detected in real-time from HIL with the help of sophisticated statistical techniques, registered 48.5% in May, up from 43.2% reported in April. When this recession-warning gauge passes the threshold probability of 50% for a more than three months, the U.S. hotel industry will enter a recession phase in its business cycle.

"HIL, the best predictive analytic of what's next for US hoteliers failed to grow for a sixth month in a row," said Maria Sogard, CEO at e­ "In May, the risk for a recession in the hotel industry approached 50%," Maria added.

Five of the forward looking indicators of business activity that comprise Hotel Industry Leading (HIL) Indicator had a positive contribution to its change in May: Jobs Market; Hotel Profitability; Foreign Demand; Yield Curve; New Orders and Vacation Barometer. Four indicators of future business activity had a negative or zero contribution to HIL's change in May: Hotel Worker Hours; Oil Prices and Housing Activity.

"The six month growth rate of HIL, a long-term growth predictive analytic which confirms the underlying cyclical behavior in the growth of US hotel business, has consistently slowed down in the last fourteen months hitting an annual growth rate of 0.1% in May from a high of 5.9% in February of 2015," said Evangelos Simos, professor of economics at the University of New Hampshire and advisor for predictive analytics at e-forecasting .com. "When long-term growth in HIL enters a negative terittory, the US hotel industry enters the recession land," he added.

The latest HIL reading is used to update’s total US Monthly Hotel Forecast as well as market level forecasts for the top 25 US markets. The firm also covers EMEA markets via a partnership with HotStats with hotel market profitability forecasts. For more information on these forecasts which include two-year predictions of occupancy, ADR, RevPAR, online ADR, room profitability and predictive analytics for investing in hotel properties, email us at info@e– with subject: UShotelforecast.

About, 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− 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 U.S.-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. HIP indicators are also available for the United Kingdom and Germany.

The US hotel industry leading indicator, or U.S.-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, U.S.-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. U.S.-HIL provides useful information about the future direction of the U.S. hotel industry. HIL indicators are also available for the United Kingdom and Germany.

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