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.
