Lodging executives are still sour on prospects for the industry. The current Lodging Executives Sentiment Index is 40.9 versus 45.7 last period and 45.8 during the same month last year. An index reading greater than 50 indicates the lodging industry is generally expanding and below 50, the sector is generally declining. The distance from 50 shows the strength of the expansion or decline.

The Fed's beige book survey released at the same time as the LESI survey also reveal generally weak economic conditions and deterioration in some regions in the U.S. and within the commercial real estate sector. Even with the federal government infusing capital into the economy, credit is still very tight for both commercial markets and consumers.

The Present Situation Index moved down to 4.5 (nearly zero!) from 9.5 last period and 52.1 during the same period a year ago. The Present Situation Index indicates abject negative sentiment in the lodging sector. The Future Expectations Index reading, 77.3, slipped only a little. Last month, it jumped to 81.8 from a low of 39.6 a year ago. This sentiment reflects the traditionally optimistic view lodging executives have about the future: 63.6 percent of respondents this month, as well as last period, feel business conditions will be better 12 months from now than they are today.

Regarding current conditions, 4.5 percent of the survey group, versus 4.8 percent last period, believe the environment is good. None of the executives responding to the LESI survey feel current business conditions are normal, while 95.5 percent (versus 85.7 percent last month) say current conditions are poor.

The Reservations Expectations Index rose to 64.3 this period compared to last month’s reading of 59.1, with last year’s reading at 41.3. About 43 percent of those surveyed, versus 27.3 percent last month, expect rooms reservations to increase in the next 12 months. An equal number believe reservations will be the same over the next 12 months as compared to the last 12 months. Fourteen percent (versus 9.1 percent last month) think rooms reservations will decrease in the next 12 months.

Just as the Fed’s survey indicates that labor markets will continue to face challenges, the Lodging Employment Index also moved down slightly from last period (50.0) to a reading of 47.5 this month. Last year at this time, the Lodging Employment Index read at 58.7. A quarter of lodging executives expect to add non-management employees over the next 12 months, versus 27.3 percent last period. Forty-five percent expect to keep the total number of employees the same, and 30 percent expect to lay off some non-management employees in the coming year.

The University of New Hampshire’s Hospitality Management Department created the LESI and the complementary indices more nine years ago under the guidance of its department chair, Raymond J. Goodman, Jr. As the leading economic indicator in the lodging sector based on opinions of lodging executives, the LESI survey mimics the Institute for Supply Management’s index.