The current Lodging Executives Sentiment Index, or LESI, reads 51.7, down from 55.4 last period and from 75 during the same period last year. A reading greater than 50 indicates lodging is expanding. One below 50 indicates it's declining. Although several respondents were cautious about the future, the Future Expectations Index is 10 points higher that the Present Situation Index.

The Present Situation Index registers a slightly faster decline in business activity with a reading of 46.6 this period versus last period's 53.6 and 81.5 during the same period a year ago. This is the first registered decline in the PSI since January 2004, when the reading ascended after being in decline for nearly three years. Since February 2004, the Present Situation Index has been in expansion mode, never registering a reading below 50. The Future Expectations Index reading of 56.9 suggests respondents think business conditions are expanding at a very slightly slower rate than last period, which read at 57.1, and far lower than the 68.5 reading of last year.

About 17 percent indicated current business conditions were good, virtually the same as 17.9 percent last period, while 58.6 percent termed them normal (versus 71.4 percent last period).

One-fourth of the executives indicated business conditions were bad, versus 10.7 percent last period. Twenty-eight percent thought business will improve in the next 12 months, slightly fewer than last period's 28.6 percent, while 58.5 percent feel conditions will stay the same, versus 57.1 percent last period. Fourteen percent indicated business conditions would be worse in the next 12 months, versus 14.3 percent of last period.

Lodging executives expect a very slight increase in the volume of room reservations, with the Reservations Expectations Index flat-lined at 50.0 against last period's reading of 48.2. A year ago to date that index read 77.8. Twenty-one percent indicated they expect rooms reservations to increase in the next 12 months, down from 32.1 percent last period. Fifty-seven percent felt rooms reservations would stay the same, versus 32.1 percent last period, and 21.4 percent indicated rooms bookings would decrease in the next 12 months, compared to 35.8 percent last period.

The Lodging Employment Index declined to 55.4 from last period's reading of 59.3 and 70.4 last year at this time. A quarter of the lodging executives, versus one-third last period, expect to add non-management employees over the next 12 months; 60.7 percent expect to maintain current levels; and 14.3 percent expect to lay off workers.

The respective numbers during the same period last year: 48.2 percent, 44.4 percent and 7.4 percent.

LESI is a leading economic indicator created and monitored by The University of New Hampshire's Hospitality Management Department.