The Hotel Industry Pulse has slowed down after two months of increases. The HIP, an indicator of hotel business growth, had declined 2.1 percent in September, bringing the current level to 79.7.
The index, which was set to 100 in 2000, is based on total employment in the hotel industry, hotel revenues (adjusted for inflation), and occupancy rates, across all sizes and types of hotels. The index is run by economic research firm e-forecasting.com and Smith Travel Research.
Those behind the index believe the dip is merely "noise" and doesn't indicate a significant shift in the generally positive direction that the hotel industry is moving in. "We are still improving month after month," said Evangelos Simos, chief economist of e-forecasting.com. "It's going to take a few more months to have a confirmation, but the trend is indicating that the worst is over."
The HIP's six-month growth rate, which measures the annualized growth across the most recent six months, has been steadily improving since it hit bottom with -23.4 percent in March 2009. For September it hit -14.6 percent, down a bit from -13.8 percent in August.
According to Simos, this indicator gives a better sense of the general direction the industry is moving than looking at just the current month, which can be too limited, or the full year, which misses when a turning point in business growth has occurred.
"Over the past months, we saw leisure demand continue to make strides in recovery while business travel maintained its downward trend," said Chad Church, industry research manager for Smith Travel Research, in a statement. "Now that the summer travel season has come to an end, we're waiting to see any signs of life from the business segment."