SENTIMENT TOWARD EXPANSION SLIDES DOWNWARD
While the most recent Lodging Executives Sentiment Index (LESI) reflects continued expansion in general business conditions, it also suggests a little softening. The current mark of 76.3 is down from last month's 80.0 figure. The Present Situation Index reads slightly higher at 72.5 against last period's reading of 70.0; the Future Situation Index reading of 80.0 moved downward from 90.0.
Created three and a half years ago, LESI is a leading indicator 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 shows the strength of the expansion or decline of the industry.
The spread of responses for this reporting period represents a relatively flat distribution as compared to previous reports. About 10 percent of respondents say current business conditions are bad; 35 percent believe current conditions are normal; and 55 percent say business is good. The Present Conditions Index reading of 72.5 points to a 10-month-long expansion mode for the business. A mark of 50.0 is the break point between decline and expansion. Sixty-five percent of lodging executives feel most positive about future business conditions, while 30 percent sense that business conditions will be about the same.
Lodging executives corroborate their Future Business Conditions optimism with The Reservations Expectations Index, which reads 87.5 — down very slightly from the previous reading of 90.0.
The Lodging Employment Index reads very slightly higher at 69.4 versus last period's reading of 68.4. Four in ten lodging executives say they expect to add non-management employees over the next 12 months, while 45 percent will keep the number of non-management employees the same. Only five percent expect to lay off employees in the next year.
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