LODGING SENTIMENT BUMPS UPWARD

The Lodging Executives Sentiment Index reading for the current period rose to 75.0 from 69.0 last period but was down from 86.1 during the same period last year. The LESI indicates continued economic expansion in lodging, with this period's Present Situation Index reading at 78.3, up from 78.0 last period but down from 98.1 during the same period a year ago. The Future Expectations Index is 71.7 for this period, up from the previous period reading of 60.0 and down from 74.1 last year. A reading greater than 50 indicates that the lodging sector is generally expanding and below 50, generally declining, with the distance from 50 showing the strength of expansion or decline. Since July, monthly survey results from lodging executives have made the LESI a leading economic indicator for the sector.

A little more than half, or 56.5 percent, of respondents indicated current business conditions were good, down from 62.5 percent last period, while 43.5 percent indicated conditions were normal, up from 33 percent last period. No executive indicated such conditions were bad. Looking forward, 43.5 percent of the executives thought conditions will be better in the next 12 months, while 56.5 percent indicated they will be the same. No executive suggested they would be worse.

Lodging executives expect a slight increase in volume of rooms reservations as compared to last period, with a Reservations Expectations Index of 75.0 versus readings of 66.0 last period and 85.2 a year ago. This index asks these executives to project rooms reservations over the next 12 months as compared to the last 12 months. Half indicated they expect rooms reservations to increase in the next 12 months, half that rooms reservations would stay the same.

The Lodging Employment Index, which asks industry executives whether, over the next 12 months, they plan to add, reduce or keep the current level of non-management employees, inched upward to 69.6 versus last period's 66.7 reading and one of 77.8 a year ago. Thirty-nine percent of the executives indicated they expect to add such employees, 61 percent expect to maintain current levels, and none indicated layoff plans. The Bureau of Labor Statistics reports the unemployment rate was essentially unchanged, decreasing from 4.5 to 4.4 percent during the same period as this survey.

The LESI indices follow the Institute of Supply Management's Index (ISM) method of tracking leading indicators. The LESI, a leading economic indicator in lodging, is based on opinions of lodging executives and aims to provide real-time information for executive decision-making in that field. It was developed and is maintained by the University of New Hampshire's Hospitality Management Department.

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