Hotel Stock Performance

U.S. Hotel Stocks Down 3.5 Percent for April 2016

The Hotel Brand sub-index reported a 2.7% decrease to 4,260 in April. The Hotel REIT sub-index experienced a 5.4% decline to 1,382 during the month.

The Baird/STR Hotel Stock Index decreased 3.5% in April to close the month at 3,183. Year to date, the index is up 2.9%.

“While overall industry performance remains somewhat erratic, it is doing so at record levels,” said Randy Smith, STR’s chairman and co-founder.  “For the month of April, on a seasonally adjusted basis, occupancy was the second-highest we have ever documented and both room rates and RevPAR hit record levels. Continued growth at previous levels will simply not be possible as the industry reaches occupancies not seen since the 1960s. Investors clearly recognize that the growth rates of the past few years are behind us, but seem to not realize just how well the industry is performing overall.  Prices paid for recent acquisitions continue to highlight the difference between the public markets and what inside investors see as the value of the underlying assets.”

“Hotel stocks pulled back a bit in April after a big first-quarter rebound as recent industrywide trends have generally disappointed the investment community,” said David Loeb, senior hotel research analyst and managing director at Baird. “Hotel stocks are still outperforming the broader market year to date, aided by the higher offer price for Starwood and greater interest in hotel brands. While the credit markets and the velocity of transaction activity appear to be improving, which should provide a nice benefit to the REITs looking to sell assets, overall demand remains choppy, especially on the business transient side, and ADR growth remains constrained and below most management teams’ expectations.”

The Baird/STR Hotel Stock Index for April lagged behind the performance of the S&P 500 (+0.3%) and the MSCI REIT (RMZ) (-2.5%). 

The Hotel Brand sub-index reported a 2.7% decrease to 4,260 in April. The Hotel REIT sub-index experienced a 5.4% decline to 1,382 during the month.

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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 are comprised of 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 April 2016, the companies that comprise the Baird/STR Hotel Stock Index include: Apple Hospitality REIT, Choice Hotels International, Chesapeake Lodging Trust, DiamondRock Hospitality Company, Extended Stay America, Hilton Worldwide Holdings, Hospitality Properties Trust, Host Hotels & Resorts, Hyatt Hotels Corporation, InterContinental Hotels Group, La Quinta Holdings, LaSalle Hotel Properties, Marriott International, Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Starwood Hotels & Resorts Worldwide, Sunstone Hotel Investors, Wyndham Worldwide Corporation, 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.



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