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U.S. Hotels 'Industry Leading Indicator' Index Declines Again

U.S. Hotels 'Industry Leading Indicator' Index Declines Again

Vacation News » Vacation & Leisure Real Estate Edition | By Michael Gerrity | November 12, 2010 10:11 AM ET



Fontainebleau-Hotel-Miami-Beach-3-keyimage.jpg According to economic research firm e-forecasting.com  in conjunction with Smith Travel research (STR), the U.S. Hotel Industry Leading Indicator ("HIL") decreased 1.1% during September after a slight drop of 0.5% during August.

The U.S. Hotel Industry Leading Indicator, or HIL, is a monthly leading indicator for the U.S. hotel industry that, on average, leads the industry's business activity four to five months in advance. The latest monthly change brought the index to a reading of 113.3. The index was set to equal 100 in 2000.

HIL's six-month growth rate, a signal of turning points, went up by an annual rate of 1.8% in September, after going up 5% in August. This compares to a long-term annual growth rate of 3.5%, the same as the annual growth rate of the state's overall economic activity.

Four of the nine components that make up Hotel Industry's Leading Indicator had a positive contribution in September: Labor Market Tightness; Interest Rate Spread; New Orders for Manufactured Goods; and Oil Prices. Five of the nine components had a negative or zero contribution to Hotel Industry's Leading Indicator in September: Weekly Hours in Hotels; Hotel Profitability; International Visitors Future Demand; Housing Activity; and National Vacation Barometer.

"As noted the last few months, the decline in the Hotel Industry Leading Indicator continued in September. This month marks the first month since last August that the six-month growth rate is below its long-term trend, which historically means an upcoming slowdown in growth for the industry," said Maria Simos, CEO of e-forecasting.com.

The U.S. Hotel Industry Leading Indicator, or HIL for short, is a monthly leading indicator. 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. The indicator provides useful information about the future direction of the U.S. hotel industry.

 


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