Hotel Industry Indicator Shows Growth
The United States Hotel Industry Leading indicator, or HIL, went up 0.4 percent during March, the second monthly increase after a slight dip in January's reading, according to economic research firm e-forecasting.com in conjunction with STR. The metric rose 0.5 percent in February.
HIL is a composite leading indicator for the U.S. hotel industry that, on average, leads the industry’s business activity four to five months in advance. The latest increase brought the index to a reading of 111.7. The index was set to equal 100 in 2000.
“This report shows that the small loss in January for the Hotel Industry Leading indicator was not a major indication of the industry heading back south," said Maria Simos, CEO of e-forecasting.com. "Highlighted last month, the domestic Vacation Barometer's continued weakness and the decline in the six-month growth rate are concerning. If the barometer continues to trend negatively, it is indicating the peak was in January. We will closely keep our eye on these trends to best identify the future turning point.”
HIL’s six-month growth rate, which is a signal of turning points, went up by an annual rate of 10.4 percent in March, after going up 11.5 percent in February. This compares to a long-term annual growth rate of 3.5 percent, the same as the annual growth rate of the country’s overall economic activity. At the deepest part of the recession during January 2009, the growth rate was down to negative 15.7 percent.
Five of the nine components that make up Hotel Industry's Leading indicator had a positive contribution during March: Labor Market Tightness; Hotel Profitability; International Visitors Future Demand; Interest Rate Spread and New Orders for Manufactured Goods. Four of the nine components had a negative or zero contribution to HIL during March: Weekly Hours in Hotels; Oil Prices; Housing Activity and a National Vacation Barometer.
The U.S. Hotel Industry Leading indicator, or HIL, is a monthly leading indicator that provides useful information about the future direction of the U.S. hotel industry. Building off the tracking success of HIP, the real-time indicator for the U.S. hotel industry, HIL was built as a composite indicator that uses nine different components that, on average, have led the industry four to five months in advance of a change in direction in the industry business cycle.
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