Baird/STR Hotel Stock Index falls 6.9 percent in February
The Baird/STR Hotel Stock Index closed February at 4,841, down 6.9 percent from the previous month.
“Hotel stocks fell sharply in February and erased their early year-to-date gains. Higher interest rates and broader stock market volatility were the main drivers of lower stock prices,” said Michael Bellisario, senior hotel research analyst and VP at Baird. “Investor expectations for the hotel companies were elevated heading into fourth-quarter earnings, and initial 2018 guidance ranges, particularly for the hotel REITs, were generally disappointing. With stock prices and earnings estimates down across the board, expectations appear more appropriately balanced today versus just a few weeks ago.”
“February broke a recent trend as investor sentiment didn’t follow the strong industry performance results from the previous month,” said Amanda Hite, STR’s president and CEO. “January 2018 was the strongest January on record, despite the tough comparisons created by the inauguration weekend in 2017. Even as the post-hurricane impact in Texas and Florida slowly subsides, U.S. hotel room demand remains robust, and the annualized key performance indicators point to another healthy year. STR pipeline numbers continue to show a slowing in rooms under construction, which will bode well for a continued and healthy performance run. The only dark cloud on the horizon is, and likely will be, a lack of pricing power. Fourth-quarter real ADR (ADR growth minus the rate of inflation, as measured by CPI) was just 0.2 percent.”
The decrease of the Baird/STR Hotel Stock Index for February was steeper than that of the S&P 500 (-3.9 percent). The MSCI REIT (RMZ) showed the worst decline of the three (-7.9 percent).
The Hotel Brand sub-index decreased 4.6 percent to 7,570 from January to February. The Hotel REIT sub-index decreased 12.1 percent to 1,527.
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 28 February 2018, the companies that comprised the Baird/STR Hotel Stock Index included: Apple Hospitality REIT, Choice Hotels International, 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, Park Hotels & Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Summit Hotel Properties, 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.
Baird is an employee-owned, international wealth management, capital markets, private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has more than 3,500 associates serving the needs of individual, corporate, institutional and municipal clients. Baird has more than $200 billion in client assets as of Dec. 31, 2017. Committed to being a great place to work, Baird ranked No. 12 on FORTUNE’s 100 Best Companies to Work For in 2018 – its 15th consecutive year on the list. Baird is the marketing name of Baird Financial Group. Baird’s principal operating subsidiaries are Robert W. Baird & Co. Incorporated in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s investment banking and private equity operations. For more information, please visit www.rwbaird.com.
STR provides clients from multiple market sectors with premium, global data benchmarking, analytics and marketplace insights. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, and an international headquarters in London, England. For more information, please visit str.com.