The Lodging Executives Sentiment Index (LESI) slipped to 86.5 this month from the robust reading of 92.9 during the last reporting period. Catalyst for the drop was a significant decline in the Future Expectations Index: 81.3 this month from 92.9 in the previous period.

The Present Situation Index was down slightly, to 91.7 from 92.9. The Reservation Expectations Index was off as well, to 91.7 from 97.6 last period. Executives seem a little wary of the future.

Nonetheless, index readings in the low 90s and high 80s still indicate a tremendously healthy business environment for the lodging sector. When compared to index readings a year ago, the survey respondents see a much better business environment today than they did in 2005. The LESI reads 86.5 today versus 81.6 a year ago. The Present Situation reads 91.7 today versus 81.6 a year ago, while the Future Expectations Index stands at 81.3 today versus 81.6 a year ago.

Eighty-three percent of executives responding to the monthly LESI survey believe present business conditions are good, while 16.7 percent characterize business as normal. Compared to previous surveys, the hotel community isn't as optimistic are the future. About a third of respondents believe conditions will be good through the next 12 months. Last month, 87.5 percent of those surveyed were optimistic about the coming year.

The LESI, created more than five years ago by RevForecast in the Hospitality Management Department at the University of New Hampshire has produced 70 continuous monthly observations. Based on opinions of lodging executives, 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.

The LESI Employment Index shows a significant decrease, with a reading of 70.8 versus 90.0 last month and 62.5 during the same period a year ago. Compared to last period, in which 80 percent of executives said they expected to add non-management employees over the next 12 months, just 45.8 percent of this month's respondents say they plan to hire additional employees in the coming year.

Half of the respondents in this month's survey expect to keep the total number of non-management employees the same, while just 4.2 percent plan to reduce the workforce at their properties or companies.