Business activity for US hoteliers held flat at the previous month reading of 116.8 in April according to today’s release of the Hotel Industry’s Pulse (HIP) indicator. e−forecasting.com’s HIP – a predictive analytic which gauges monthly overall business conditions for hotels earlier than any industry indicator – stalled, posting a nil growth rate in April after an increase of 0.1% in March. The index is set to equal 100 in 2010.
HIP’s six-month growth rate, which has historically confirmed the turning points in US hotel business activity, posted a positive rate of 0.6% in April, following a positive rate of 0.8% in March. This compares to a long-term annual growth rate of 2%, the same as the 40-year average annual growth rate of the industry’s gross domestic product.
The probability of the hotel industry being in recession, which is detected in real-time from HIP with the help of sophisticated statistical techniques, registered 40.9 % in April, up from 39.2% reported in March. When this recession-warning gauge is near or passes the threshold probability of 50%, the US hotel industry has entered a recession.
“The slowdown in the growth rate of HIP continued in April. In the last 10 months, monthly growth rates varied between (+0.1) to (-0.1) with three months posting nil growth,” said Maria Sogard, CEO of eforecasting.com. “We have not seen any solid gains in predictive analytics for a long time, ” Maria added.
Only one of the three demand and supply indicators of current business activity that make up Hotel Industry’s Pulse (HIP) Index had a positive contribution to its change in April: Total Spending on Hotels (includes non-room revenues). The two of the three indicators of current business activity which had a negative or zero contribution to HIP’s change in April were Hotel Jobs and Hotel Capacity.
“Two turning-point predictive analytics, recession probabilities and the long-term growth rate, show underlying trends leading to a recession for US hoteliers. The readings of analytics over the next three months are critical to confirm the industry’s position in the business cycle,” said Evangelos Simos, research advisor for predictive analytics at e-forecasting.com
The latest HIP reading will be 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.
