Low Oil Prices Boost Hotels

Low prices for energy, particularly oil-based fuel, are good for the economy in general but are particularly good for the hospitality sector. Energy costs represent a significant part of the cost structure of a hotel, most notably for climate control in winter and summer, so lower energy prices reduce the cost of operating a hotel. At the same time, low prices for fuel make people more willing to travel, particularly by car and airplane, and that results in more customers at the hotel. E-forecasting.com in its latest monthly HIL index is projecting a boost of 0.2 percent in the hotel business, largely on the basis of the decline in energy prices in December. This follows a series of upward moves in the HIL previous months. E-forecasting.com says the HIL is a leading indicator that is four to five months ahead of changes in business results at U.S. hotels.