The Lodging Executives Sentiment Index (LESI) climbed to its highest reading ever — 87.0 — from 83.8 last month and from 75.0 during the same period last year. The LESI, its sub-components and all other indicators point to robust economic expansion in the lodging sector. This period's Present Situation Index reads at 87.0, up from 82.5 last period and 61.8 during the same period a year ago. The Future Expectations Index increased to 87.0 from 85.0 and from 88.2 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.

The Sentiment Index fell to its lowest level since April 2003 with most of the concern regarding gasoline prices even though energy prices slumped in May. Indeed, several hotels have advertised that they would buy a tank of gas for guests to use in traveling to their resort properties with a receipt indicating the purchase of gas on the day of travel.

The Lodging Reservations Expectations Index posted a reading of 93.5, up from 92.5 last period and 88.9 a year ago. Seventy-four percent of respondents say current business conditions are good — up from 70 percent last period — with 26.1 percent indicating that current conditions are normal. Similarly, 73.9 percent of lodging executives believe conditions will be better in the next 12 months; 26.1 percent feel conditions will be the same. None of the lodging executives surveyed believe business conditions will be worse 12 months from now.

The Reservations Expectations Index reading of 93.5 indicates a very-slightly faster expansion than last period's index reading of 92.5. The Reservations Expectation Index asks lodging executives to project rooms reservations over the next 12 months as compared to the last 12 months. Nearly 90 percent of the lodging executives expect rooms reservations to increase in the next 12 months, while 13 percent feel reservations will stay the same.

The Lodging Employment Index is lower at 76.1 versus last period's reading of 80.0. Fifty-two percent of those surveyed expect to add non-management employees over the next 12 months, while 48 percent say they'll keep the total number of non-management employees the same. No one anticipates layoffs of non-management employees in the coming year. The employment index survey 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.

The LESI Indices follow the Institute of Supply Management's Index (formerly Purchasing Manager's Index) method of tracking leading indicators. The LESI is a leading economic indicator in the lodging sector and is based on opinions of lodging executives. It satisfies the need for real-time information for executive decision making in the lodging industry.

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