Lodging Executive Outlook Sours
The current Lodging Executives' Sentiment Index (LESI) reading is 69.6, down from last month's 72.3 and the 79.3 of the same period last year. While the LESI indicates continued economic expansion in lodging, the Future Expectations Index has taken a precipitous drop with this period's reading at 53.6 versus last period's 66.1 and the 69.6 reading of a year ago. The Present Situation Index's rate of change moved faster than last period to 85.7 versus 78.6, but it kept the LESI from dipping further, given the dire predictions of the Future Situation. The future direction of business gibes with the Reservations Expectations Index reading of 55.4, far below the 64.3 reading last period. The Future Expectations and Reservations Expectations indices read 69.6 and 71.7 respectively a year ago to date. At 53.6, the Future Expectations Index' direction of business activity is only slightly above the expansion threshold; as a reading below 50 indicates that the lodging industry is generally in decline. A reading greater than 50 indicates that lodging is generally growing and below 50, declining. The distance from 50 indicates strength of expansion or decline. A majority — 71.4 percent — of the respondents indicated current business conditions were good, up significantly from 57 percent last period, while 28.6 versus 43 percent last period indicated current conditions were normal. None considered business bad. With regard to future business conditions, 28.6 percent of the lodging executives thought they will improve in the next 12 months versus 43.1 percent last period; 21.4 percent felt they would worsen, far more than last period's 10.7 percent.
The Reservations Expectation Index asks lodging executives to project rooms reservations over the next 12 months as compared to the last 12 months; 28.53 percent indicated they expected reservations to increase, versus 35.7 percent last period. 53.55 percent felt that rooms reservations would stay the same, down from 57.1 percent last period, and 17.9 percent felt reservations would decrease over the next 12 months, far up from the 7.3 percent of last period.
The Lodging Employment Index, also setting a 12-month projection against the last 12 months, indicated a decrease to 63.0 this period from last period's 70.0, and last year's reading of 68.5 this period is up from 63.0 last period and 69.6 last year, with 40.7 percent of the executives indicating they would increase the total number of non-management employees versus 37 percent last period. 55.6 percent this period, up from 51.9 percent last period, expect to maintain current levels.
The LESI was developed by the University of New Hampshire's Hospitality Management Department. An economic indicator in the lodging sector, it is based on opinions of lodging executives and satisfies the need for real-time information for executive decision-making in the lodging industry.
Reprints and Licensing
© 2014 Penton Media Inc.
Acceptable Use Policy blog comments powered by Disqus
Enter a City:
Select a State:
Select a Category: