Finance & DevelopmentFinanceU.S. Hotel Industry Grows at Half the Rate of U.S. Economy

U.S. Hotel Industry Grows at Half the Rate of U.S. Economy

Durham, NH—Business activity for U.S. hoteliers held steady at the previous month reading of 118.8 in September, according to e-forcasting.com’s Hotel Industry’s Pulse (HIP) indicator—a predictive analytic which gauges monthly overall business conditions for hotels. The HIP stalled, posting a zero growth rate in September after a flat performance in August. The index is set to equal 100 in 2010.

HIP’s six-month growth rate, which has historically confirmed the turning points in U.S. hotel business activity, posted a positive rate of 0.9 percent in September, following a positive rate of 1.2 percent in August. This compares to a long-term annual growth rate of 2 percent, 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 34.1 percent in September, up from 30.1 percent reported in August,” said Evangelos Otto Simos, professor at the University of New Hampshire and predictive analytics database editor for e-forecasting.com. “When this recession-warning gauge is near or passes the threshold probability of 50 percent, the U.S. hotel industry has entered a recession.”

“In the last twelve months—September 2016 to September 2017—overall economic activity, measured by e−forecasting.com’s monthly U.S. GDP rose by 2.2 percent. Over the same period, economic activity in U.S. Hotels, measured by HIP, increased by 1 percent,” said Maria Sogard, CEO of e-­forecasting.com.

Only one of the three demand and supply indicators of current business activity that make up the Hotel Industry’s Pulse (HIP) Index had a positive contribution to its change in September—total spending on hotels, including 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 September were hotel jobs and hotel capacity.

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