The Lodging Executive Sentiment Index inched upward in the last month, even as it mirrors the overall slower economic expansion in the industry. The current LESI reading of 38.8 compares to 35.0 last month and 53.8 this time last year. As one executive put it, “If you’re buying hotels right now, you’re in great shape, but if you’re trying to operate, life sucks.” Several respondents from Chicago indicated particular softening in that market.

The Present Situation Index advanced a tick to 7.5 from 5.0 last period and 55.6 during the same period a year ago. The Future Expectations Index reading of 70.0, compared to 60.0 last month, shows that many in the industry believe business conditions will be better this time next year. It also marks the first significant improvement in the Future Expectations Index since mid-year 2007. Half of the respondents believe things will be looking up within 12 months. An index reading greater than 50 indicates that the lodging industry is generally expanding and below 50, the sector is generally declining, with the distance from 50 showing the strength of the expansion or decline.

As it’s been in the past two reporting periods, not one executive responding to the LESI survey believes current business conditions are good. And exactly as recorded two months ago, 15 percent say current conditions are normal, while 85 percent believe things are bad. Last period, 10 percent indicated normal, and 90 percent indicated bad. Sentiment seems to be improving, however: 50 percent of those surveyed believe business will be better in the next 12 months, compared to 40 percent who had that opinion last period.

Opinions on future levels of room reservations haven’t changed much, with the Reservations Expectations Index holding steady at 30.0, the same reading as last month. At this time a year ago, the Index mark was 46.

The Reservations Expectation Index asks lodging executives to project room reservations over the next 12 months as compared to the last 12 months. Ten percent of the lodging executives expect reservations to increase in the next 12 months, the same percentage as last period. Four in 10 believe res traffic will stay the same in the coming year, while 50 think reservations volume will decrease.

The Lodging Employment Index inched upwards, with a reading of 26.3 versus 23.7 last month. Last year at this time, the Employment Index read at 61.5. Sixteen percent of those surveyed, versus 10.5 percent last period, expect to add non-management employees over the next 12 months. About one in five expected to keep the number of non-management employees the same, compared to 26.3 percent last period. About two-thirds of the sample plan layoffs of non-management employees in the next 12 months.

The University of New Hampshire’s Hospitality Management Department created the LESI and the complementary indices more than eight years ago. It is the leading economic indicator in the lodging sector and is based on opinions of lodging executives. The survey results mimic the Institute for Supply Management’s index (formerly the Purchasing Managers' Index) that creates an index for the composite—the LESI, the Present Situation Index, the Future Expectations Index, and the Lodging Employment Index.