What are some leading indicators of another economic recession?

Is another recession looming? It’s the question on the minds of analysts and leaders across the hotel industry. When asked if the hotel industry is more or less prepared for another recession, Mark Lomanno, partner and senior advisor at Kalibri Labs, couldn’t help but laugh. He said, by every measure hotels should be more prepared, having seen a few of these over the last 15 or 20 years, but being prepared and behaving accordingly are two entirely separate issues.

Access to advanced metrics at the market or U.S. level can aid in tracking the cycle strength and can help project whether we’re at the start or end of a particular cycle. Mark mentions how one new leading indicator from these advanced metrics would be a contracting Length of Stay and Booking Lead Time which may signal that tides are starting to change and budgets are tightening.

In the case below, a 6-month look at the YOY% change of Booking Lead Time and Length of Stay appears to show both metrics growing, or at least holding steady, versus same month in the previous year, indicating the health of the industry remains in tact.

Booking Lead Time continued to expand versus the same time in 2017 but trended downward last fall, prior to ticking back up in December.  

Hotel distribution and the booking trends of consumers are light years different than even 10 years ago at the start of the great recession. Ensure you’re using next-generation metrics, powered by the Kalibri Labs database, to better understand the conditions in your market.