EXECUTIVES SIGNAL BUSINESS UPLIFT

The current Lodging Executives Sentiment Index (LESI) rose slightly to 83.8, compared to last month's reading of 83.3. The present conditions measure shows a slight slippage at 82.5, compared to last period's mark of 85.7. The future conditions index mirrors the industry's general optimism, nudging up to 85.0 versus 81.0 last month.

As one survey participant says, “Business is better, and I expect it to remain so for the balance of the year. Most market areas have rebounded nicely and should continue to grow in 2005.”

The LESI is a leading indicator based on opinions of lodging executives and is a summary measure that shows the prevailing direction and magnitude of change in the lodging industry.

A LESI index reading greater than 50 shows that the industry is generally expanding and below 50, the industry is generally declining. The distance from 50 indicates the strength of the expansion or decline of the lodging sector. The LESI was created more than four years ago and is maintained by LodgingForecast.

Lodging executives surveyed believe future business conditions will continue to be robust. Seventy percent of respondents expect business activity to improve in the next 12 months, while 30 percent say business will be about the same in the next year. More than six out of ten lodging executives rate current business conditions as good, while 35 percent say current conditions have remained the same.

The Reservations Expectations Index, in which executives project rooms reservations over the next 12 months as compared to the last 12 months, reads at 92.5 — up from last period's reading of 88.1. Eighty-five percent of those surveyed feel rooms reservations will increase over the next 12 months; none believe reservations will decrease.

While the unemployment rate for the nation remains unchanged, the current lodging employment index has a reading of 80.0, compared to 76.2 in the last report. The employment index asks lodging industry executives whether over the next 12 months they expect to: 1) add the total number of non-management employees, 2) keep the number about the same or 3) reduce the total number of non-management employees.

Sixty-five percent of the executives say they expect to add non-management employees over the next 12 months, while 30 percent expect to keep the total number of employees the same. Just five percent of respondents plan to reduce the total number of non-management employees.

The LESI Index follows the Institute of Supply Management's Index method of tracking leading indicators and satisfies the need for real-time information for executive decision making in the lodging industry.

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