EXECUTIVE SENTIMENT CREEPS UPWARD

The Lodging Executives Sentiment Index registered essentially the same reading for the current period of 78.6 from 77.4 last period and 84.6 during the same period last year. The LESI indicates continued economic expansion in lodging, with this period's Present Situation Index reading at 85.7, up from 83.3 last month and 92.3 during the same period a year ago. The Future Expectations Index flat-lined at 71.4 for this period and the previous one and from 76.9 last year. A reading greater than 50 indicates the lodging industry is expanding and below 50, declining, with the distance from 50 indicative of the strength of the expansion or decline.

Of the respondents, 74.3 percent indicated current business conditions were “good,” up from 66.7 percent last period, though only 22 percent called them “normal,” compared to 33 percent last. Three percent of lodging executives indicated current business conditions were “bad.” With regard to future business, 48.6 percent said they thought conditions would improve in the next 12 months but 45.7 percent feel they will be the same. Only 5.7 percent indicated that business conditions would be worse.

Lodging executives indicated a fairly steady volume of rooms reservations as the Reservations Expectations Index read 74.3 as against last period's 73.8 and 85.6 a year ago to date. Nearly two-thirds, or 62.9 percent, indicated they expected rooms reservations to grow in the next 12 months, and 22.9 percent felt they would stay the same; 14.3 percent indicated rooms reservations would decrease in the next 12 months.

The Lodging Employment Index dipped to 72.1 versus last period's reading of 82.5 and 67.3 a year ago. Not quite half, or 45.7 percent, indicated they “expect to add non-management employees over the next 12 months,” with 48.6 percent expecting to “keep the total number of non-management employees the same.” Only 2.9 percent indicated they will lay off such employees.

This index asks lodging industry executives whether, over the next 12 months, they expect to: 1) increase the total number of non-management employees, 2) keep it about the same, or 3) reduce it. The Bureau of Labor Statistics reports that non-farm payroll employment increased by 111,000 in January, with the unemployment rate essentially unchanged at 4.6 percent.

The LESI indices follow the Institute of Supply Management's Index (ISM) method of tracking leading indicators, like this one for the lodging sector. Based on opinions of lodging executives, the LESI satisfies the need for real-time information for executive decision-making in lodging. The LESI was developed and is maintained by the University of New Hampshire's Hospitality Management Department.

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