Hotel Industry Leading Indicator

US HIP and HIL Both Hit All-Time Highs in July

Hotel Industry Real-Time and Leading Indicators - HIP and HIL - Report on Current and Future Business Activity

e-forecasting.com Business activity in U.S. hotels increased in July to a reading of 108.2 according to the latest reading of the U.S. Hotel Industry's Pulse (U.S.-HIP) indicator. e−forecasting.com's U.S.-HIP, a composite indicator that gauges monthly overall business conditions in the U.S. hotel industry increased 0.3% in July, following an increase of 0.5% in June. The index is set to equal 100 in 2005.

Graph - Hotel Industry Leading Indicator July 2013

U.S.-HIP's six-month growth rate, which has historically confirmed the turning points in U.S. hotel business activity, had a positive rate of 4.7% in July, the same rate as in June. This compares to a long-term annual growth rate of 3%, the same as the 30-year average annual growth rate of the industry's gross domestic product.

Graph - Hotel Business Activity July 2013

The probability of the hotel industry entering into recession, which is detected in real-time from U.S.-HIP with the help of sophisticated statistical techniques, registered 5% in July, holding the same rate as the previous month. When this recession-warning gauge passes the threshold probability of 50%, the U.S. hotel industry enters a recession.

"HIP rose in July for a tenth month in row to an all-time high level of business activity during the last 44 years," said Maria Sogard, CEO of e­forecasting.com.

Two of the demand and supply indicators of current business activity that constitute Hotel Industry's Pulse (U.S.-HIP) Index had a positive contribution to its change in July: Hotel Jobs and Spending on Hotels. The current business activity indicator that had a negative or zero contribution to U.S.-HIP's change in July was Hotel Capacity. 

"The hotel industry expanded by four times faster than the national economy, " added Maria. "In the last twelve months - July 2012 to July 2013 - overall economic activity, measured by e-forecasting.com's monthly U.S. GDP - rose by 0.8%. Over the same period, economic activity in U.S. Hotels, measured by HIP, increased by 3.9%.", she explained. 

Looking forward, future business activity in U.S. hotels rose in July according to the latest reading of the Hotels' future business conditions  (U.S.-HIL) indicator.  e−forecasting.com's U.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 114.1, following an increase of 0.8% in June.  The index is set to equal 100 in 2005.

"Although U.S.-HIL reached its highest level on record, cuts in weekly worker hours and rising energy costs held down the growth of the indicator in July," said Maria Simos Sogard, CEO of e-forecasting.com.

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. 

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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