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TBR Index Of Leading Economic Indicators Dips In August, Still Outpaces U.S Economy Over Last 12 Months.

NEW YORK--(BUSINESS WIRE)--Oct. 10, 1997--The Travel Business Roundtable (TBR) Index of Leading Economic Indicators declined in August by 0.9 percent -- the third monthly decline over the past 12 months.

The TBR Index provides a forecast of changes in future activity in the travel and tourism industry, and offers valuable insight into the significant impact of the industry on the U.S. economy.

"In spite of the decline, the August TBR Index is 5.1 percent above what it was a year ago," notes Jonathan Tisch, chairman of the TBR and president & CEO of Loews Hotels. "This strong industry performance is in sharp contrast to the U.S. Index of Leading Economic Indicators," continues Tisch, referring to the fact that the U.S. Index is up only 1.8 percent over last year.

"While the August fall-off could be considered as significant, a review of the data indicates that the decline was concentrated in a single sector -- the Hotel/Motel Occupancy Rate," says renowned economist Dr. James Howell, developer of the TBR Index, president of Boston-based The Howell Group and former chief economist of Bank of Boston.

Dr. Howell explains that the Occupancy Rate is a very reliable month-to-month indicator, and as such, it is given greater weight in the TBR Index. Because seven of the remaining eight sectors of economic data included in the TBR Index remained unchanged from July, the greater weight given to the Occupancy Rate caused the TBR Index to dip.

"The softening in the occupancy rate not only in August, but over the past 5-6 months, has been expected as the growth in room supply has outpaced market demand for rooms," comments Chuck Ross, vice president of Smith Travel Research, a firm that contributes data to the TBR Index. "The shift to slightly lower occupancy rates will continue into 1998," concludes Ross.

"From a five year perspective, the average annual increase in the TBR Index of 3.5 percent reflects the strong growth taking place among travel, tourism and related industries during the current growth phase of the national business cycle," says Tisch. He notes that over the same period the average annual rate of change for the U.S. Index was 0.7 percent. "More rapid growth rates are usually associated with greater shorter term volatility," Dr. Howell points out, "And this is certainly the case with the TBR Index vis-a-vis the U.S. Index."

The TBR Index of Leading Economic Indicators is a composite of nine key travel, tourism, entertainment, and restaurant data -- representing all the major economic sectors of this industry. The TBR Index is a weighted computation of the month-to-month changes in each of the data sources, and seasonal fluctuations have been removed from these data before they are aggregated into the final TBR Index.

The TBR was established in 1995 by travel and tourism industry leaders who recognized the need for an organization to educate legislative leaders -- at both state and national levels -- about the importance of the industry to the nation's economy. Today, more than 70 CEOs (or their functional equivalents) are members of the TBR, representing the largest businesses in the travel and tourism industry.

CONTACT: Travel Business Roundtable, New York

Jon Paul Buchmeyer, 212/758-8809
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Publication:Business Wire
Date:Oct 10, 1997
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