eforcasting.com’s ‘HIP’ shows setback…

DURHAM, New Hampshire—This morning, economic research firm e-forecasting.com in conjunction with Smith Travel Research announced HIP hit another bump in November.

After edging down 0.1 percent in October, HIP went down 1.8 percent in November. HIP, the Hotel Industry’s Pulse index, is a composite indicator that gauges business activity in the U.S. hotel industry in real-time, similar to a GDP measure for the industry.  The latest monthly change brought the index to a reading of 79.9.  The index is set to equal 100 in 2000.

Looking at HIP’s six-month growth rate, which historically has signaled turning points in U.S. hotel business activity, HIP’s growth rate worsened from the previous month, with a reading of negative 9.3 percent compared with negative 8.7 percent in October. As a benchmark, March had been the worst month of the cycle when the six-month growth rate hit negative 23.4. This compares with a long-term annual growth rate of 3.2 percent, the same as the 38-year average annual growth rate of the industry’s gross domestic product.

“As noted last month, what we are seeing now is that the hotel industry recovery has gone flat. It seems that the industry, although we are not seeing major declines again yet, is leveling out at very low levels,” commented Maria Simos, CEO of e-forecasting.com.