The Baird/STR Hotel Stock Index dropped 6.6% in August to 4,561. Year to date through the first eight months of 2019, the index is up 12.1%.
“Hotel stocks declined and underperformed their benchmarks again in August as macroeconomic concerns continue to be front and center for investors,” said Michael Bellisario, senior hotel research analyst and VP at Baird. “RevPAR trends have been sluggish lately, broader growth uncertainties remain a headwind for investor sentiment and most hotel management teams expect the slow pace of growth to continue for the remainder of the year, all of which has caused hotel stocks to be relative underperformers in recent months.”
“The current performance environment is a seesaw with stops at good, ok and poor news,” said Amanda Hite, STR’s president and CEO. “In July, the industry sold more rooms than any other month on record, and the RevPAR upcycle hit a record 111 months in a 113-month span. But ADR growth of 0.7% in July and 1.1% year to date is below or just at the level of inflation, which does not bode well for profit growth. All chain scales and classes are equally affected by the lack of ADR and RevPAR growth, and as our latest forecast projects, we do not expect the fundamentals to change rapidly in either direction.”
August performance of the Baird/STR Hotel Stock Index was behind both the S&P 500 (-1.8%) and the MSCI US REIT Index (+3.1%).
The Hotel Brand sub-index decreased 7.5% from July to 7,254 while the Hotel REIT sub-index declined 4.5% to 1,407.
July performance of the Baird/STR Hotel Stock Index was below both the S&P 500 (+1.3%) and the MSCI US REIT Index (+1.1%).
The Hotel Brand sub-index was virtually unchanged from June at a level of 7,843, while the Hotel REIT sub-index dropped 3.2% to 1,473.
About the Baird/STR Hotel Stock Index and Sub-Indices
The Baird/STR Hotel Stock Index was set to equal 1,000 on 1 January 2000. Last cycle, the Index peaked at 3,178 on 5 July 2007. The Index’s low point occurred on 6 March 2009 when it dropped to 573.
The Hotel Brand sub-index was set to equal 1,000 on 1 January 2000. Last cycle, the sub-index peaked at 3,407 on 5 July 2007. The sub-index’s low point occurred on 6 March 2009 when it dropped to 722.
The Hotel REIT sub-index was set to equal 1,000 on 1 January 2000. Last cycle, the sub-index peaked at 2,555 on 2 February 2007. The sub-index’s low point occurred on 5 March 2009 when it dropped to 298.