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Steep Decline�Future Looks More Positive |
| Durham, N.H., Apr. 2, 2001 � �We�ll pace ahead of other sectors, such
as retail with demand continuing to outstrip supply increases, particularly
in the full service side. It�s a market share game�occupancy, occupancy,
occupancy,� noted a senior executive responsible for more than 75,000 hotel
rooms. While J.P. Nichols from Cendant said in USA Today that business
travelers are �trading down� to Ramada�s, Wingate and other mid-Tier brands.
The Current Situation Index recorded its first decline ever at 47.4. A LEsI reading of 50+ marks the lodging industry as generally expanding; and below 50, the industry is generally declining while the distance from 50 is indicative of the strength of the expansion or decline. The composite Lodging Executive�s Sentiment Index (LEsI) calculated for the month of March is 56.6�while the lowest reading since its inception ten months ago, the index is still marking in positive territory. The latest impressions of lodging executives about the level of business activity for the lodging industry continues a downward trend for the third consecutive month with the LEsI calculation for March lower by 12.6 index points following a 8.6 decrease from February�s calculation. Another executive says, �SEUS market starting to soften up, NEUS still strong.� And, yet another said, �business conditions have deteriorated noticeably in many major markets, and travel in some domestic locations is at a virtual standstill. Our resorts are holding up so far.� The Future Situation Index of the LEsI while trending slightly lower this month�to 65.8 from 67.3 last month�still indicate expansion especially in light of the current situation index reading. �The sky is falling in talk might become the walk,� said another executive. The March Construction Index continues to slip, but still reads quite positive at 73.7. �Cash is King! Our ability to service debt, financing in this market will enable us to find new deals in high barrier markets,� echoed a senior VP in lodging development. The real estate sector chimed in, �we are clearly in a buyer�s market although hotel values are somewhat stabilized due to the low interest rate environment.� The Rooms Reservations Index calculation for the month of March dipped
below flatline into negative growth and reads at 42.1 as compared to 61.5
for February. The Rooms Reservation Index asks executives what they expected
for rooms reservations/bookings over the next 12 months compared to the
last 12 months. In its first reporting, the Employee Index signaled a reduction
in the total number of non-management employees with an index reading of
43.8. With the reading below flatline, this index reading corroborates
the decline.
About the Index Created by researchers at LodgingForecast.com, the LESI tracks on a month-to-month basis a 12-month outlook for the lodging industry. The LESI is a nationwide poll of lodging industry executives in operations, finance and development, and marketing who represent all segments of the lodging industry. LodgingForecast.com holds its executives� responses in strictest confidence; only the final summary analysis is reported, and the summary analysis encompasses upwards of 1.2 million hotel rooms. Following the Purchasing Managers Index method of tracking leading indicators, the LESI satisfies the need for real-time information for executive decision making in the lodging industry. The LESI is a leading indicator based on opinions of lodging executives. Under development since June 1999, the LESI is a diffusion index--a convenient summary measure showing the prevailing direction of change and the magnitude of change for the Lodging Industry. LodgingForecast.com is a division of the consulting firm evanjoeray, LLC which publishes several lodging related indicators each month. |
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Raymond J.Goodman, Jr. [email protected] (603) 868-7888 http://orbit.unh.edu/dhm http://www.lodgingForecast.com |