HIL: Predictive Analytic Continues to Show Slow Future Business Activity for US Hoteliers
Hotel Industry Real-time Indicator – Report On Current Business Activity
Future business activity in U.S. hotels rose in July according to the latest reading of the Hotels' future business conditions (HIL) indicator. e−forecasting.com's HIL, a composite indicator that gauges future monthly overall business conditions in the U.S. hotel industry, increased by 0.1% in July to 127.8, following a nil growth in June. The index is set to equal 100 in 2010.
Durham, New Hampshire USA -- Future business activity in U.S. hotels rose in July according to the latest reading of the Hotels' future business conditions (HIL) indicator. e−forecasting.com's HIL, a composite indicator that gauges future monthly overall business conditions in the U.S. hotel industry, increased by 0.1% in July to 127.8, following a nil growth in June. The index is set to equal 100 in 2010.
"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 39.3% in July, up from 38.3% in June," said Maria Sogard, CEO at eforecasting.com. "When this gauge of the risk for an upcoming recession passes the threshold probability of 50% for more than three months, the U.S. hotel industry will enter a recession phase in its business cycle," 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 July: Jobs Market; Hotel Profitability; Foreign Demand; New Orders and Vacation Barometer. Four indicators of future business activity had a negative or zero contribution to HIL's change in July: Hotel Worker Hours; Yield Curve; Oil Prices and Housing Activity.
"The six month annualized smoothed growth rate of HIL, a long-range growth predictive analytic which confirms the underlying cyclical business trend for US hoteliers, posted a positive rate of 0.6% in July, compared to a 30-year average annual growth rate of 2%," said Evangelos Simos, professor of economics at the University of New Hampshire and series editor for predictive analytics databases at e-forecasting .com."When the six month growth in HIL enters a near zero to negative range for 2-4 consecutive months, the industry will go to recession," Evangelos added.
The latest HIL reading is used to update e-forecasting.com'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–forecasting.com with subject: UShotelforecast.
About HIP
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.
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.