After increasing 1.8 percent during April, the Hotel Industry Pulse Index advanced 2.1 percent during May, according to economic research firm e-forecasting.com in conjunction with STR.
The Hotel Industry Pulse Index, or HIP, is composite indicator that gauges business activity in the United States hotel industry in real-time, similar to a GDP measure. The latest monthly change brought the index to a reading of 86.6. The index was set to equal 100 in 2000.
HIPâ€™s six-month growth rate, which historically has signaled turning points in U.S. hotel business activity, continued to improve. After 20 months of the six-month growth rate being negative, the measure has gone up four consecutive months. During May, the six-month growth improved upon Aprilâ€™s growth of 7.5 percent by gaining 11.4 percent. This compares with a long-term growth rate of 3.2 percent, which is the same as the 38-year average annual growth rate of the industryâ€™s GDP.
â€œWe continue to see strong fundamentals in the hotel industry,â€ said Evangelos Simos, chief economist of e-forecasting.com. â€œThe Hotel Industry Pulse has turned a corner and continues to improve, providing a very strong indication that the industry has exited the recessionary phase of its business cycle.â€