DURHAM, New Hampshire—Economic research firm e-forecasting.com, in conjunction with Smith Travel Research, announced the U.S. Hotel Industry Leading Indicator—HIL—edged down 0.2 percent in January, the first monthly decrease after nine consecutive months of increases for the indicator. HIL went up 1.4 percent in December.
HIL, a monthly leading indicator for the U.S. hotel industry, is a composite leading indicator 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 109.7. The index is set to equal 100 in 2000.
HIL’s six-month growth rate, a signal of turning points, went up by an annual rate of 10.6 percent in January, after going up 12 percent in December. This compares to a long-term annual growth rate of 3.5 percent, the same as the annual growth rate of the state's overall economic activity. To put this in perspective, the growth rate was down to negative 15.7 percent during the deepest part of this last recession last January.
Three of the nine components that make up HIL had a positive contribution in January: International Visitors Future Demand; Interest Rate Spread and New Orders for Manufactured Goods. Six of the nine components had a negative or zero contribution to Hotel Industry's Leading Indicator in January: Labor Market Tightness; Weekly Hours in Hotels; Hotel Profitability; Oil Prices; Housing Activity and National Vacation Barometer.
“This month we see the Hotel Industry Leading Indicator pull back a bit,” commented Maria Simos, CEO of e-forecasting.com. “There were just too many components that brought the indicator down this month, particularly hotel profitability, which measures aspects of future hotel revenue and costs. Also this month, we see the six-month growth rate step back from its previous high of 12 percent that it reached in December.”
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.