Renamed TBR Index Rebounds, Slightly
<B>Renamed TBR Index Rebounds, Slightly</B>
A modest increase of 0.4 percent in the Travel Business Roundtable/World Travel and Tourism Council Index of Leading Economic Indicators in May, following a deep 2.2 percent decline in April, reflects a rebound in consumer confidence rather than any real strength in the travel business.
The Conference Board's consumer confidence index was up 0.61 percent. Only one other of the nine sectors that comprise the index--hotel room revenue from Smith Travel Research--showed any strength in May, with a modest seasonally adjusted increase of 0.1 percent.
Meanwhile, the index of rental car daily mileage, which is provided by a major car rental company, declined by 0.48 percent. This indicator has been soft for the past several months, reflecting second-quarter corporate travel spending cutbacks.
The six other indicators, which were unchanged or only slightly up from April, include: revenue passenger miles from the Air Transport Association, total travel agent sales from the Airlines Reporting Corp., hotel occupancy rates from Smith Travel Research, personal consumption of services--excluding housing, utilities and medical--from the Bureau of Economic Analysis, air transportation and transportation service industry employment from the Bureau of Labor Statistics and eating and drinking establishment retail sales from the U.S. Department of Commerce and the Bureau of Census.
Dr. James Howell, president of Boston-based Howell Group and the economist who created and maintains the index, said that having six of the nine indicators relatively unchanged points to an industry with a "sideways meanders," a characteristic often observed at a turning point in the business cycle. Since November, the TBR/WTTC Index has followed an irregular pattern, in which three months were up and three were down. Howell said the relatively stronger performance in May must be judged in the context of the decline over the past 12 months, taking into account the cyclical adjustment that already has affected the travel and tourism industry more seriously than the U.S. economy as a whole.
Meanwhile, the U.S. Index of Leading Economic Indicators showed an increase of 0.5 percent for the month of May.
In looking at the U.S. economy as a whole, Howell said the data indicate that the U.S. economy "successfully has passed through the most recent cyclical pause without slipping into a recession." With regard to the TBR/WTTC Index and the travel and tourism industry, he said, "Analysts will look for not only consistent monthly increases, but also a decisive shift to increases across the majority of indicators in the Index."
The new, lengthier name of the Index reflects the alliance between the Travel Business Roundtable, a U.S.-based organization representing CEOs from all sectors of the travel and tourism industry, and The World Travel & Tourism Council, the global forum for travel and tourism industry chief execs.