LODGING EXECUTIVE SENTIMENT SOARS
It seems that things couldn't get much better in the hotel industry. This month's Lodging Executives Sentiment Index (LESI) registers at 92.1 — the highest reading ever — with the same reading of 92.1 for both the Present Situation Index and the Future Expectations Index. At the same time last year, all three indexes registered 81.6. Last month's LESI reading was 89.0.
This highly optimistic group of lodging executives continues to be very positive about the future of the business. The Reservations Expectations Index, in which lodging executives are asked to project rooms reservations over the next 12 months compared to the last 12 months, is off the chart with a reading of 97.4.
More than 84 percent of lodging executives participating in the monthly survey believe both current and future business conditions will be better in the next 12 months; in the last period, 72 percent felt business conditions would improve in the coming year.
The Reservations Expectations Index reading of 97.4 is up from 90.0 last month. Ninety-five percent of those surveyed expect rooms reservations to increase, versus 80 percent who believed so last month. Eighty-four percent of respondents say current business conditions are good, versus 16 percent who view conditions as normal. None of the executives believe business conditions are bad.
The LESI, created more than five years ago, has had 69 continuous monthly observations and is a leading indicator developed by RevForecast. It is based on opinions of lodging executives. A LESI index reading greater than 50 indicates that the industry is generally expanding and below 50, the lodging sector is generally declining. The distance from 50 indicates the strength of the expansion or decline of the industry. This period's extremely high readings are unprecedented in the history of the survey.
The LESI Employment Index shows a significant increase, registering 88.9 versus 74.0 last month and 60.5 during the same period a year ago. More than three-fourths of lodging executives expect to add non-management employees over the next 12 months, while 22.2 percent expect to keep the total number of employees the same. None of those surveyed plans to lay off employees over the next 12 months. Total non-farm payroll has increased slightly, and the unemployment rate of 4.9 percent is almost the same as it was last month, according to the Department of Labor's Bureau of Labor Statistics.
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 Index follows the Institute of Supply Management's Index method of tracking leading indicators.
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