HENDERSONVILLE, Tennessee, and MILWAUKEE—The Baird/STR Hotel Stock Index declined 2.6% in May to a level of 5,287.
“Hotel stocks were mixed in May – the Hotel REITs increased slightly and outperformed the real estate benchmark by 400 bps, while the Global Hotel Brands declined and underperformed the S&P 500’s marginal gain by 380 bps,” said Michael Bellisario, senior hotel research analyst and director at Baird. “While macroeconomic concerns have subsided recently, investors are incrementally focused on normalizing customer and geographic demand trends and slower year-over-year RevPAR growth, particularly related to last year’s strong summer travel season domestically.”
“While small, demand was back up in May with a lift from graduations and concerts, setting the stage for a solid summer,” said Amanda Hite, STR president. “We upgraded the forecast in our most recent revision despite expectations of a mild recession and recent banking woes. In line with earlier projections, however, year-over-year growth has slowed with tougher comparables. Any growth is noteworthy though considering the underlying economic uncertainty.”
In May, the Baird/STR Hotel Stock Index fell behind the S&P 500 (+0.2%) but came in above the MSCI US REIT Index (-3.2%).
The Hotel Brand sub-index fell 3.6% from April to 9,815, while the Hotel REIT sub-index grew 0.8% to 1,053.
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.
The Baird/STR Hotel Stock Index and sub-indices are available exclusively on Hotel News Now. The indices are cobranded and were created by Robert W. Baird & Co. (Baird) and STR. The market-cap-weighted, price-only indices comprise 20 of the largest market-capitalization hotel companies publicly traded on a U.S. exchange and attempt to characterize the performance of hotel stocks. The Index and sub-indices are maintained by Baird and hosted on Hotel News Now, are not actively managed, and no direct investment can be made in them.
As of 31 May 2023, the companies that comprised the Baird/STR Hotel Stock Index included: Apple Hospitality REIT, Ashford Hospitality Trust, Chatham Lodging Trust, Choice Hotels International, DiamondRock Hospitality Company, Hersha Hospitality Trust, Hilton Inc., Host Hotels & Resorts, Hyatt Hotels, InterContinental Hotels Group, Marriott International, Park Hotels & Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Service Properties Trust, Summit Hotel Properties, Sunstone Hotel Investors, Wyndham Hotels & Resorts, and Xenia Hotels & Resorts.
This communication is not a call to action to engage in a securities transaction and has not been individually tailored to a specific client or targeted group of clients. Research reports on the companies identified in this communication are provided by Robert W. Baird & Co. Incorporated, and are available to clients through their Baird Financial Advisor. This communication does not provide recipients with information or advice that is sufficient on which to base an investment decision. This communication does not take into account the specific investment objectives, financial situation or need of any particular client and may not be suitable for all types of investors. Recipients should consider the contents of this communication as a single factor in making an investment decision. Additional fundamental and other analyses would be required to make an investment decision about any individual security identified in this release.
