A LITTLE LESS OPTIMISM

The Lodging Executives Sentiment Index (LESI) slipped slightly this period to 79.5 from 79.8* last month and from 82.4 during the same year-to-date period last year. The LESI continues to point to economic expansion in the lodging sector. This period's Present Situation Index reads at 86.4, down from 90.5 last period but up from 82.4 during the same period a year ago.

The Future Expectations Index increased a notch to 72.7 from 69.0 last month and from 82.4 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.

Seventy-three percent of respondents say current business conditions are good — down from 80 percent in the last period who had the same sentiment. While positive, lodging executives are somewhat less secure about future business conditions: Half of the survey group believe conditions will be better in the next 12 months, while 45.5 percent think conditions will be the same.

The Reservations Expectations Index reads at 77.3, indicating a very slightly slower expansion than last period's index reading of 78.6 and 88.2 a year ago. The Reservations Expectation Index asks lodging executives to project rooms reservations over the next 12 months as compared to the last 12 months. Sixty-four percent of those surveyed expect reservations to increase in the next 12 months; 27.3 percent feel reservations will stay the same, and 9.0 percent expect bookings to decrease in the next 12 months.

Likewise, the Lodging Employment Index reads very slightly lower at 76.2 versus last period's reading of 76.3 and 61.8 a year ago. More than half of lodging executives expect to add non-management employees over the next 12 months, while 47.6 percent say they'll keep the number of employees the same. The Lodging 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.

The LESI Indices follow the Institute of Supply Management's Index (ISM) 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 information for executive decisionmaking in the lodging industry. LESI was developed by the University of New Hampshire's Hospitality Management Department.

*Last month's indices have been adjusted for more recent survey respondents.

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