The Baird/STR Hotel Stock Index's January performance lagged behind the S&P 500 and MSCI US REIT Index.
The Baird/STR Hotel Stock Index dropped 7.7% in January to 4,863.
“Hotel stocks significantly underperformed in January as coronavirus fears mounted,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Last year’s positive stock market momentum reversed course sharply, and investors have become increasingly concerned about how the spread of coronavirus might impact global growth with hotel stocks being disproportionately impacted as a result. Industry RevPAR forecasts for 2020 continue to moderate, and most industry participants now are expecting flattish growth.”
“As presented at ALIS last week, we’re forecasting 2020 to be the industry’s first non-growth year in RevPAR since 2009,” said Amanda Hite, STR’s president. “Even though preliminary U.S. performance results for January have shown positive, the uncertainty around the coronavirus outbreak on top of already modest growth expectations has created angst around the investment community. It will be some time before we know the extent of the coronavirus impact on travel and lodging in the U.S., but this is no doubt a concern with global implications in the sector. It is worth pointing out that the total number of Chinese visitors was expected to be around 2.8 million in 2020, and any disruption to this flow will impact local and national demand growth figures.”
January performance of the Baird/STR Hotel Stock Index fell behind both the S&P 500 (-0.2%) and the MSCI US REIT Index (+1.0%).
The Hotel Brand sub-index decreased 6.4% from December to 8,052 while the Hotel REIT sub-index declined 10.8% to 1,364.
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.