The Refinishing Touch Blog

As the economy as a whole continues to recover from last year’s recession, individual industries are facing their own unique hurdles to overcome. The hotel industry is no exception, as noted by the recent decline in the Hotel Industry’s Pulse index (HIP), the real-time monthly composite indicator of business activity throughout the hotel industry, similar to a GDP measure. This includes indicators such as revenue generated by consumers staying at hotels and motels, room occupancy rates and hotel employment. Despite increasing by 2.8 percent in December of 2009, the HIP fell in January, signaling a slight hiccup in the hospitality industry’s economic recovery.

Still, this slight drop doesn’t mean that the hotel industry is heading for another sharp decline. As with any recovery effort, there are going to be bumps in the road, with some months seeing an improvement whereas others see decline. Although January saw a slight decline in the probability of business improvement when compared to December, it still saw a strong probability for improvement of 96.4 percent.

The HIP is a useful indicator of the timing and degree to which the hotel industry and the U.S. business cycle sync, and with December historically seeing a bigger boost in consumer travel, it makes sense that January would fall slightly in comparison. As the hospitality industry continues to improve and learn from the lessons of last year’s economic difficulties, the HIP is sure to reflect those changes with increasing numbers and a more positive outlook.

Labels: HIP, Hotel Industry Pulse index