The Lodging Executives Sentiment Index (LESI) registers continued expansion in general business conditions to a mark of 82.4 from 85.9 last month and 73.8 during the same reporting period last year. The Present Situation Index reads very slightly lower at 82.4 from 87.0 last month and 59.5 a year ago, while the Future Expectations Index reads very slightly lower at 82.4 versus 84.8 for last period and last year's reading of 88.1.

As the leading indicator of lodging performance and based on opinions of lodging executives, the LESI was developed by RevForecast to forecast lodging occupancy, average daily rate and RevPAR on a property-specific as well as on a market basis. A LESI index reading greater than 50 indicates that the industry is generally expanding and below 50, the lodging sector is generally declining. The distance from 50 shows the strength of the expansion or decline of the industry. This revenue management tool, among other criteria and decisions, is used in decisionmaking by lodging executives to set rates, establish staffing levels and determine when to take rooms out of inventory for upgrading.

Our group of lodging executives continues to feel positive about the future, although a little less so than last period. About 70 percent believe business conditions will improve in the next 12 months. The respondents are less bullish about rooms reservations over the next 12 months compared to the last year. The Reservations Expectations Index reading of 88.2 was down from 93.5 in the last reporting period. Fewer lodging executives (70.6 percent versus 87 percent last month) expect rooms reservations to increase. Sixty-five percent of respondents say current business conditions are good versus 35.3 percent who say conditions are normal; none believe current conditions are bad.

The Lodging Employment Index asks lodging industry executives whether over the next 12 months they expect to add the total number of non-management employees, keep the number about the same or reduce the total number of employees. The Employment Index reads markedly lower at 61.8 versus last period's reading of 76.1. These readings are in contrast to last year's Employment Index reading of 70.0. Forty-one percent of respondents expect to add non-management employees over the next 12 months, and the same number expect to keep the total number of non-management employees the same. Nearly 18 percent of executives say they expect to lay off employees over the next 12 months.

The LESI Index follows the Institute of Supply Management's Index method of tracking leading indicators. The LESI was developed and is maintained by LodgingForecast. Developed more than four years ago, it satisfies the need for real-time information for executive decisionmaking in the lodging industry.

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