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�oog Market �verview (Continued) According to a December 12�h article in HNN {hotelnewsnow.com), the �conomic research firm e-forecasting.com, in conjunction with Smith Travel Research, announced tF�ai following a decline of 1.9 percent in October, the Hoiei indus�ry's Pu[se Index (HIP) feli by 3.Z perc�r�t in No�ember. HIP is a composite indicatar that gauges business activity in �he U.S. hotef industry in real-time. This decline brought the index ta a reading af 92.4. The index was set to equal 100 in 20D0, Loofcing at HIP's six-mon�h grovv�h ra�e, which histor�cally has signaled turning points in U.S. hatel business acti�ity, HIP went down by an annua[ rate of 13.5 percent �n November, further warsening its decline af 9.2 percer�t in �cto�er. This compar�s to a long-term annual growt� rate of 3.2 percent, the same as the 38-year average ann�al growth raie of the industry's gross domestic praduct. The praba�ility af a recession in the hotel ir�dustry, which is detected ir� real-fime fram HIP wit� the help af sophisticated stafiistical techni�ues, registered 99.9 percent in November, up from 95.7 per- ce�fi reported in October. Historically, when ihis �ecession-warning gauge passes t�e threshald prab- ability of 35 percent fo� a few months, the U.S. I�otel industry has entered a recession. As a result, the odds of business expansion in the hatef industry were at the Q.1, percenf mark in No�ember, becaming e�en mare dismai than Octaber's reading of 4.3 percent. Presider�t-elect Qbama has taker� important s�eps aver the past year to demonstrate his support for travel �y cospansoring the Travel Promotio� Act, encouraging expansion of �he Visa Wai�er Program and speaking aufi on our nation's d�ier�orating air travel system, according �o Roger pow from TIA. He now has an opportunity to demonsirat� his commi�ment to impro�ing the American ecor�omy and winning hearts and minds aro�nd tF�e worfd by supporting lawer barriers to tra�el to and within the United States, and by making impro�ements an the trave[ process a ceRtral priority af his adminis�ra�ion. The change in adminis�ration and balance of pawer in the U.S. House of Represe�tati�es and Senate pra�ides oppo�tunities for the travel community. According to Smith Tra�e[, the indUSiry will also see mare gues�rooms closing—in large part because of �he lack of capital thraugh traditional lending sources. Same pro�erties with a serious need for renovation will simply naf have funding available to do so. From a historical perspective, an a�erage of 15,000 guestrooms closed artnUally untif 1997. Then, for the next six years, �he average was about 30,004. During the period from 2004 through 2006, about 50,a00 guesirooms were clased annuafly— due in large part ta natural disasters such as Hurricane Katrina and the rush ro conver� existing hotel rooms into condominiums. The net number af room c�osings figure fell again �o about �a,Q�O in 20o7, bu� in ihis enviranment we fully expect tha� numb�r to rise fia abaut 45,000 annually far 2Q08, 2009 and z010. -Page 9-