DURHAM, New Hampshire—The outlook for future business activity in the U.S. hotel industry increased 0.2% during April, according to e-forecasting.com’s Hotel Industry Leading indicator, or HIL. The composite indicator measured a reading of 113.2 during the month after holding flat during March. The indicator was set to equal 100 in 2005.
HIL's six-month growth rate, which historically has confirmed the forthcoming turning points in U.S. hotel business activity, posted a positive rate of 2.5% during April, the same rate as in March. This compares to a long-term annual growth rate of 3%, the same as the 30-year average annual growth rate of the industry's gross domestic product.
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 8.6% in April, holding the same probability as in March. When this recession-warning gauge 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.
"HIL's six-month growth rate continues to stall out, hovering near its long-term trend the last few months," commented Maria Simos Sogard, CEO of e-forecasting.com.
Seven of the forward looking indicators of business activity that comprise HIL had a positive contribution to its change in April: Jobs Market; Hotel Profitability; Foreign Demand; Yield Curve; New Orders; Oil Prices and Vacation Barometer. Two indicators of future business activity had a negative or zero contribution to HIL's change in April: Hotel Worker Hours and Housing Activity.
The U.S. Hotel Industry Leading indicator, or HIL for short, is a monthly leading indicator for the 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, when put together have led the industry four to five months in advance of a change in direction in the industry business cycle. HIL provides useful information about the future direction of the U.S. hotel industry.