STR - US Hotel Industry Recovery Continues to Slow
January 7, 2011 - The Hotel Industry Pulse Index went up 0.4% during November after an increase of 0.2% during October, according to economic research firm e-forecasting.com in conjunction with STR.
The Hotel Industry's Pulse Index, or HIP, is a composite indicator that gauges business activity in the United States hotel industry in real-time, similar to a GDP measure for the industry. The latest monthly change brought the index to a reading of 89.9. The index was set to equal 100 in 2000.
HIP's six-month growth rate, which historically has signaled turning points in U.S. hotel business activity, continued to deteriorate for the month. After recording an 11.9% rate of growth during October, the six-month growth rate fell to 10.8% during November. It is useful to benchmark against the long-term growth rate of 3.2% as it is the same as the 38-year average annual growth rate of the industry's gross domestic product.
“With the November Hotel Industry Pulse Index report, we see that the U.S. hotel industry's recovery pace has slowed but continues. Although expected, we remain cautious as we continue to see slowdowns in growth rates," said Evangelos Simos, chief economist of e-forecasting.com.
The probability of business expansion in the hotel industry was at 98.5% during November, slightly higher than October's reading of 98%.
The Hotel Industry Pulse Index, or HIP for short, was created to fill the void of a real-time monthly indicator that captures current conditions for the U.S. hotel industry. The indicator provides useful information about the timing and degree of the industry's linking with the U.S. business cycle for the last 40 years. 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.
About STR
STR provides clients—including hotel operators, developers, financiers, analysts and suppliers to the hotel industry—access to hotel research with regular and custom reports covering North America, Mexico and Caribbean. STR provides a single source of global hotel data covering daily and monthly performance data, forecasts, annual profitability, pipeline and census information. STR founded the STR family of companies and is proudly associated with STR Global, RRC Associates, STR Analytics, and HotelNewsNow.com. For more information, please visit www.str.com.
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