Spokane Journal of Business

More lodging execs optimistic about current conditions

Those surveyed say they are less certain about upcoming 12 months

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U.S. lodging executives' sentiment about general business conditions was up slightly in May compared with the prior month, says the University of New Hampshire Lodging Executives Sentiment Index.

The index moved to a score of 71.2 in May from 69.3 in April.

The indices follow the Institute of Supply Management's Index (ISM) method of tracking leading indicators. A lodging survey reading of greater than 50 indicates expansion, whereas a reading below 50 indicates decline. The distance from 50 in either direction is indicating the strength of the expansion or decline.

Nelson Barber, associate professor of hospitality management at the University of New Hampshire, in Durham N.H., who manages the index, says the results are from lodging executives' sentiment of the present general business conditions for their properties, which moved upward in May but were offset somewhat by a decline in their sentiment for how they view general business conditions 12 months in the future.

"Future business conditions are influenced by the 3 percent decline in expectations about room reservations over the same 12-month period," Barber says.

Just fewer than 40 percent of lodging executives indicated current business conditions were good, an increase from 19 percent last period, while 62 percent indicated conditions were normal, down from 77 percent during the same period. None of the executives characterized conditions as bad, an improvement in sentiment from April's reading, where 4 percent indicated conditions were bad.

Managed by the department of hospitality management at the University of New Hampshire's Peter T. Paul College of Business and Economics, the lodging index is based on a monthly survey of industry executives representing companies with more than 2.5 million hotel rooms, or more than 55 percent of all rooms in the U.S., across lodging segments and geographic regions.

Executives are asked about the present and future conditions of the market. They also are asked to report their outlook for the next 12 months about room reservations and employment practices, such as an increase or decrease of their nonmanagerial work force.

Looking forward, fewer executives think conditions will be better in the next 12 months. In May, 46 percent of the executives expected improvement, versus 58 percent in April. Fifty-four percent indicated in May conditions will be the same, versus 42 percent the previous month. Executive sentiment for the next 12 months showed that no executive thought conditions would be worse.

Twelve months into the future, though, lodging executives do expect a pull back on hiring of nonmanagerial employees, representing a 3 percent decrease in expectations compared with April's report results.

The University of New Hampshire, founded in 1866, is the state's flagship public institution, enrolling 12,200 undergraduate and 2,300 graduate students.

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