HENDERSONVILLE, Tennessee, and MILWAUKEE — 5 March 2021 — The Baird/STR Hotel Stock Index jumped 22.4% in February to a level of 5,141. Year to date through the first two months of 2021, the stock index was up 12.4%.
“Hotel stocks posted huge gains in February as the reopening and reflation trade momentum caused many hotel brands and hotel REITs to reach new post-pandemic highs,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Investors appear willing to pay up today for several years of expected growth, and improving vaccine distribution and declining case counts have caused investors to become even more optimistic about the prospects for a significant improvement in demand during the second half of the year and in 2022.”
“Investor sentiment clearly reflects the focus on future developments as our current data still shows RevPAR declines around 50%,” said Amanda Hite, STR president. “We do expect that additional vaccine production will give rise to an increase in traveler confidence but not beyond what has already been forecasted. Green shoots are emerging, and some markets in Florida are already seeing healthy demand numbers, but the U.S. overall will not see a sustained recovery until the summer.”
In February, the Baird/STR Hotel Stock Index outperformed both the S&P 500 (+2.6%) and the MSCI US REIT Index (+3.8%).
The Hotel Brand sub-index increased 22.0% from January to 8,833, while the Hotel REIT sub-index rose 23.6% to 1,305.
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 28 February 2021, 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.