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China Hotels Growth Expected to Slow

Column: industry Tag: China Hotels Published: 2017-04-25 11:11 Source: Author:

Business activity for China's hoteliers weakened in February according to the latest reading of the country's Hotel Industry Pulse (HIP). e−forecasting.com's China HIP - a business analytic which tracks monthly overall business conditions in China's hotel industry - decreased 0.2% in February to a reading of 94.4. HIP index is set to equal 100 in 2010.

Looking ahead of the curve, prospects of future business activity for China's hoteliers increased in February according to the latest reading of the country's Hotel Industry Leading (HIL) indicator. e−forecasting.com's China HIL - a predictive analytic which gauges monthly what's next for business in China's hotel industry - rose 0.3% in February to a reading of 100.3, after stalling in January. HIL index is set to equal 100 in 2010.

The six-month smoothed annualized growth rate of China's predictive analytic HIL registered a positive reading of (+5.5%) in February, following a gain of (+6.4%) in January. Consistent with its goal, the six-month smoothed annualized growth rate in HIL dips down several months ahead of the growth rate of the country's hotel performance indicators, like Revenue Per Available Room (RevPAR). Similarly, when the country's hotels are in a downswing of the industry's business cycle, the growth in HIL pops up first, signaling an upcoming end of the business recession, which implies a forthcoming recovery in business activity.

"The probability for the country's hotels entering a recession in the near future with falling performance indicators, like Revenue Per Available Room (RevPAR), rose to 39.3% in February from 37.5% in January." said Maria Sogard CEO at e-forecasting.com.

"When this recession-warning gauge passes the doorstep probability of 25%, growth in hotel performance indicators slow down substantially; and, when the recession probability passes the threshold of 50%, growth rates in hotel industry's performance indicators will turn from positive to negative in a few months later." Maria added.

"All eight forward looking indicators of business activity that comprise China's Hotel Industry Leading (HIL) had a positive contribution to its change in February: US Future Hotel Business; Energy Costs; Merchandise Imports; Leading Economic Indicator; Foreign Demand; Manufacturing Barometer; Economic Climate and Consumer Confidence; " said Evangelos Simos, editor of predictive analytics databases and professor of economics at the University of New Hampshire. None of the 8 indicators of future business activity had a negative or zero contribution to the change of China's Hotel Industry.

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