Business activity for Hong Kong's hoteliers weakened in June according to the latest reading of the country's Hotel Industry Pulse (HIP). e−forecasting.com's Hong Kong HIP - a business analytic which tracks monthly overall business conditions in Hong Kong's hotel industry - decreased 0.6% in June to a reading of 121.9. HIP index is set to equal 100 in 2010.
Looking ahead of the curve, prospects of future business activity for Hong Kong's hoteliers decreased in June according to the latest reading of the country's Hotel Industry Leading (HIL) indicator. e−forecasting.com's Hong Kong HIL - a predictive analytic which gauges monthly what's next for business in Hong Kong's hotel industry - fell 0.7% in June to a reading of 113.1, following a decline of (–0.2%) in May. HIL index is set to equal 100 in 2010.
The six-month smoothed annualized growth rate of Hong Kong's predictive analytic HIL registered a negative reading of (–6.9%) in June, following a loss of (–6.3%) in May. 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 probability for the country's hotels entering a recession in the near future with falling performance indicators, like Revenue Per Available Room (RevPAR), rose to 56.8% in June from 56.2% in May." said Maria Sogard CEO at e-forecasting.com.
"When this recession-warning gauge passes the doorstep probability of 25%, growth in hotel performance indicators slow down substantially; and, when the recession probability passes the threshold of 50%, growth rates in hotel industry's performance indicators will turn from positive to negative in a few months later." Maria added.
"Four of the seven forward looking indicators of business activity that comprise Hong Kong's Hotel Industry Leading (HIL) had a positive contribution to its change in June: Equity Market Shares Price; Re-Exports; Retail Business and Manufacturing Barometer; " said Evangelos Simos, editor of predictive analytics databases and professor of economics at the University of New Hampshire. "Three indicators of future business activity had a negative or zero contribution to the change of Hong Kong's Hotel Industry Leading (HIL) in June: Energy Costs; US Future Hotel Business and Tourism Cycle; " Simos added.
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