The Baird/STR Hotel Stock Index increased 0.7% in February, closing the month at 3,750. Through the first two months of 2017, the index was up 1.3%.
"Hotel stocks underperformed the broader indices in February as industry trends remained sluggish and investors digested 2017 guidance updates that were generally a bit below expectations, especially from the hotel REITs," said Michael Bellisario, senior hotel research analyst and vice president at Baird. "Management teams remain hopeful that fundamentals will improve in the back half of the year, but green shoots have yet to emerge, and full-year guidance ranges reflect a continuation of moderate year-to-date growth trends, which caused stocks to be relative underperformers in February."
"Early-year industry performance seems to be falling in line with our expectation for slight occupancy declines and muted RevPAR growth," said Amanda Hite, STR's president and CEO. "Mixed signals from the new administration—tax relief on one hand, a travel ban on the other—is likely not helping investor sentiment, but thus far, there hasn't been a noticeable impact on data. We'll continue to monitor demand numbers, specifically in the coastal markets, to see if any trends emerge."
The Baird/STR Hotel Stock Index for February lagged behind the performance of the S&P 500 (+3.7%) and the MSCI REIT (RMZ) (+3.2%).
The Hotel Brand sub-index increased 1.7% to 5,111 from January to February, while the Hotel REIT sub-index fell 1.0% to 1,580 during the month.
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.
As of 28 February 2017, the companies that comprised 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, Summit Hotel Properties, Sunstone Hotel Investors, Wyndham Worldwide Corporation, and Xenia Hotels & Resorts.
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