Executive Sentiment Rises

The Lodging Executives Sentiment Index (LESI) climbed to 85.7 from 84.6 last month and from 87.0 during the same period last year. The LESI continues to point to widespread economic expansion in the lodging sector. Indeed, many lodging executives believe this is the best of times for the hotel industry.

The Present Situation Index reading of 95.2 is up from 92.3 last period and 87.0 during the same period a year ago. The Future Expectations Index decreased just a click to 76.2 from 76.9 last month and 87.0 last year. An index reading greater than 50 indicates that the lodging industry is generally expanding and below 50, the sector is generally declining. The distance from 50 indicates the strength of the expansion or decline.

More than 90 percent of respondents say current business conditions are good — up from 84.6 percent last period. The group is less confident about the future: only 52.4 percent believe business conditions will be better in the next 12 months, and 47.6 percent say conditions will be the same this time next year.

Lodging executives expect an increase in rooms reservations, as the Reservations Expectations Index reads 76.2. Four out of six respondents expect reservations to increase in the next 12 months; 29 percent expect the volume to stay the same, while less than 10 percent believe res volume will decrease in the coming months.

The Lodging Employment Index mark of 75.0 is higher than last period's reading of 74.0 but lower than last year's 76.1. Fifty-five percent of executives expect to add non-management employees over the next 12 months, while 40 percent expect to keep the number of employees the same. Just five percent plan to lay off employees in the coming year. The Lodging Employment Index asks executives whether over the next 12 months they expect to add non-management employees, keep the number about the same or reduce the total number of non-management employees they employ.

The LESI is a leading economic indicator in the lodging sector and is based on opinions of lodging executives. Created more than five years ago, the LESI was developed and is maintained by the University of New Hampshire's Hospitality Management Department.

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