HENDERSONVILLE, Tennessee, and MILWAUKEE—The Baird/STR Hotel Stock Index rose 2.7% in November to a level of 5,430. Year to date through the first 11 months of 2022, the stock index was down 5.5%.
“Hotel stocks increased in November but were relative underperformers for the first time since June,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Softer than expected CPI data fed into the Federal Reserve pivot narrative, which caused the broader stock market to jump, particularly in some of the industries and sectors that had lagged recently; as a result, both the hotel REITs and the global hotel brands underperformed their respective benchmarks. Hotel fundamentals broadly continue to hold steady, but the rate of change on the top line has moderated. Following third-quarter earnings, expense pressures now are more in focus, particularly as investors focus on 2023 growth outlooks and potential risks to the overall recovery.”
“U.S. hotel room demand continued to improve in November, but year-over-year growth slowed compared to October due in part to the calendar shift around Halloween,” said Amanda Hite, STR president. “Similarly, rate growth remained robust, albeit at a slightly slower pace than the previous month. Despite the slowdown in growth, nominal RevPAR remained above the pre-pandemic comparable while inflation-adjusted RevPAR was just four percent lower than 2019. While we continue to monitor the inflation impact and likely recession, the resilience of the industry allowed us to maintain our previous projections for ADR and RevPAR in our final forecast of the year.”
In November, the Baird/STR Hotel Stock Index fell behind both the S&P 500 (+5.4%) and the MSCI US REIT Index (+5.6%).
The Hotel Brand sub-index increased 3.7% from October to 9,804, while the Hotel REIT sub-index fell 0.2% to 1,190.
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 30 November 2022, 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.