Market Report China

China Hotel Industry Leading Indicator Up in May Releases Inaugural China Hotel Report

China's Hotel Industry Leading (HIL) - a predictive analytic designed to provide hoteliers, business analysts, financial institutions, and policy makers an insightful gauge on future business activity for the country's hotels - increased in May.  HIL rose 0.8% in May to a reading of 92.0, following an increase of (+0.4%) in April.  HIL is set to equal 100 in 2010.

Graph - China Hotel Industry Leading Indicators May 2016

Three of the eight forward looking indicators of business activity that comprise China's Hotel Industry Leading (HIL) had a positive contribution to its change in May: Leading Economic Indicator, Manufacturing Barometer and Foreign Demand.  Five indicators of future business activity had a negative or zero contribution to the change of China's Hotel Industry Leading (HIL) in May: US Future Hotel Business; Energy Costs; Merchandise Imports; Economic Climate and Consumer Confidence.

The six-month smoothed annualized growth rate of China's predictive analytic HIL registered a positive reading of (+5.1%) in May, following a gain of (+3.9%) in April. Consistent with its goal, the six-month smoothed annualized growth rate in HIL dips down several months ahead of the growth rate of the country's hotel performance indicators, like Revenue Per Available Room (RevPAR). Similarly, when the country's hotels are in a downswing of the industry's business cycle, the growth in HIL pops up first, signaling an upcoming end of the business recession, which implies a forthcoming recovery in business activity. 

The combination of business intelligence drawn from HIP with predictive intelligence gained from HIL provide a measure of the risk for a forthcoming fall in the overall business activity of the country's hotels and their performance indicators - like RevPAR - making this recession-risk predictive analytic the utmost tool for business planning. The probability for the country's hotels entering a recession in the near future with a falling RevPAR declined to 38.6% in May from 41.3% in April. When this recession-warning gauge passes the threshold probability of 50%, China's RevPAR will begin to fall a few months later.  As a result, the probability for a future expansion in RevPAR for China's hotels posted a reading of 61.4% in May. 

“Since last August, the six month growth rate of HIL has continually increased, now reaching 5.1% which is the highest level its held since the summer of 2011,”  Maria Sogard commented, CEO of  “China remains a highly sought after destination for business and leisure travelers, with foreign demand continuing to be the main driver pushing its hotel industry further.” 

These drivers and more are all available in the latest release from in its inaugural issue of the China Hotel Predictive Analytics monthly report.  The China Hotel Predictive Analytics monthly report covers China HIP, the real time index for the nation’s hotels, along with China HIL, a predictive analytic, which leads China hotel business activity and provides probabilities of an upcoming recession in China’s hotel industry, along with China’s monthly GDP.  The China Predictive Analytics monthly report is available on an annual subscription basis.

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