HIP’s Business Expansion Probability Remains 100 Percent
The Hotel Industry Pulse Index went up 2.2 percent during June after edging up 0.4 percent during May, according to economic research firm e-forecasting.com in conjunction with STR. The Hotel Industry Pulse Index, or HIP, is a composite indicator that gauges business activity in the United States hotel industry in real-time, similar to a GDP measure.
DURHAM, New Hampshire -- The Hotel Industry Pulse Index went up 2.2 percent during June after edging up 0.4 percent during May, according to economic research firm e-forecasting.com in conjunction with STR.
The Hotel Industry Pulse Index, or HIP, is a composite indicator that gauges business activity in the United States hotel industry in real-time, similar to a GDP measure. The latest monthly change brought the index to a reading of 87.1. The index was set to equal 100 in 2000.
During June, HIP's six-month growth rate, which historically has signaled turning points in U.S. hotel business activity, improved upon May's growth of 8.1 percent by gaining 11.8 percent. After 20 months of the six-month growth rate being negative, it has gone up for five consecutive months. This compares with a long-term growth rate of 3.2 percent, which is the same as the 38-year average annual growth rate of the industry's gross domestic product.
“The Hotel Industry Pulse Index continues to show that the U.S. hotel industry performed quite well in the second quarter of this year," said Maria Simos, CEO of e-forecasting.com.
The probability of business expansion remained near the 100 mark in June, as has been the case since the beginning of the year. The expansion probability was at 99.9 percent for the month, up from the already high 99.1 percent mark reached in May.
The Hotel Industry Pulse Index, 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. The indicator provides useful information about the timing and degree of the industry’s linking with the U.S. business cycle for the last 40 years. 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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