US hotel industry remains stagnant

stagnationBusiness activity for US hoteliers rose to a reading of 117.2 in August according to the release of the Hotel Industry’s Pulse (HIP) indicator.  e−’s HIP – a predictive analytic which gauges monthly overall business conditions for hotels – edged by 0.1%  in August after an increase of 0.1% in July.  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 August, following a positive rate of 0.5% in July. 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 39.6 % in August, down from 40.7% reported in July.  When this recession-warning gauge is near or passes the threshold probability of 50%, the US hotel industry has entered a recession.

“The latest reading of business activity in the hotel industry shows that US hoteliers stayed in stagnation mode in August,” said Maria Sogard, CEO of e­ “HIP posted a monthly change of just 0.1% from the previous month, thus it remained within the narrow range of nil to 0.1% for a fourteenth month in a row,” 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 August: 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 August were Hotel Jobs and Hotel Capacity.

“The probability of the hotel industry being in recession also has been in a range between 40% to 46% in the last seven months indicating that the industry is in a major slowdown near the borders of the recession,” said Evangelos Simos, professor of Economics at the  University of New Hampshire and editor for predictive analytics databases at

The latest HIP reading will be used to update’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  [email protected] with subject: UShotelforecast.


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