China Hotel Predictive Analytics Gain Momentum

E-forecasting.com Releases China Hotel Industry Report

Current business activity for China’s hoteliers weakened in August 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 0.3% in August to a reading of 93.9. HIP index is set to equal 100 in 2010.

However, looking ahead of the curve, prospects of future business activity for China’s hoteliers increased in August 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 –  advanced 0.6% in August to a reading of 96.8, following an increase of 0.4% in July. HIL index is set to equal 100 in 2010.

Table - China Hotel Industry Report

The six-month smoothed annualized growth rate of China’s predictive analytic HIL registered a 10.3% growth reading August, following a gain of (+10.2%) in July. 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), declined to 31.0% in August from 31.1% in August.” said Maria Sogard CEO at e-forecasting.com, “with Chinese imports, lower energy costs and foreign demand significantly contributing to the positive China HIL assessment.”

“When this recession-warning gauge passes the doorstep probability of 25%, growth in China 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 August: US Future Hotel Business; Energy Costs; Merchandise Imports; Leading Economic Indicator; Foreign Demand; Manufacturing Barometer; Economic Climate and Consumer Confidence.  None of the 8 indicators of future business activity had a negative or zero contribution to the change of China’s Hotel Industry Leading (HIL) in August.

About e-forecasting.com 

e-forecasting.com, an international economic research and consulting firm, offers forecasts of the economic environment using proprietary, real-time economic indicators to produce customized solutions for what’s next. e−forecasting.com collaborates with domestic and international clients and publications to provide timely economic content for use as predictive intelligence to strengthen its clients’ competitive advantage.