HENDERSONVILLE, Tennessee, and MILWAUKEE—The Baird/STR Hotel Stock Index fell 5.3% in June to a level of 3,060. Year to date through the first six months of 2020, the stock index was down 41.9%.
“Hotel stocks were volatile in June as the broader reopening trade continued into the early part of the month; the Hotel Brand and Hotel REIT Sub-Indices were up more than 19% and nearly 37%, respectively, through six trading days,”said Michael Bellisario, senior hotel research analyst and director at Baird. “However, the momentum reversed course, and hotel stocks finished the month approximately 5% lower as rising coronavirus case counts in several states dampened investor sentiment and negatively impacted travel-related stocks.”
“Different metrics seem to point to opposite stories,” said Amanda Hite, STR’s president. “On one hand, RevPAR declines continue to ease, and occupancy continues to grow nationally and by scale. On the other hand, the continued acceleration in positive COVID cases could have implications for the U.S. hotel industry if it means that states slow or reverse their opening. This then would not only impact transient demand, but also, as importantly, group demand. If governors decide that congregations of 10 or more people should be discouraged, then the meetings industry’s recovery will be that farther off.”
June performance of the Baird/STR Hotel Stock Index fell behind the S&P 500 (+1.8%) and the MSCI US REIT Index (+2.5%).
The Hotel Brand sub-index dropped 5.4% from May to 5,332, while the Hotel REIT sub-index was down 4.9% to 746.
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 www.HotelNewsNow.com. 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 30 June 2020, the companies that comprised the Baird/STR Hotel Stock Index included: Apple Hospitality REIT, Chatham Lodging Trust, Choice Hotels International, DiamondRock Hospitality Company, Extended Stay America, 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.