The Baird/STR Hotel Stock Index fell 1.0% in July to 4,883. Year to date through the first seven months of 2019, the index was up 20.0%.
“Hotel stocks were flat to down in July, and the sub-indices underperformed their respective benchmarks modestly,” said Michael Bellisario, senior hotel research analyst and VP at Baird. “Second-quarter earnings reports were the big driver of stock prices during the month; high investor expectations for the hotel brands and disappointing second-half outlooks from the hotel REITs caused hotel stocks to underperform in July.”
“A stock index trending between flat and slightly down is very much aligned with recent industry performance,” said Amanda Hite, STR’s president and CEO. “It will be interesting to monitor where investor sentiment moves over the duration of the year as we do not expect to see material improvement in the data. We’ll revise our RevPAR forecast downward at the Hotel Data Conference later this week as hotelier pricing power remains elusive and supply grows at enough of a rate to outpace demand growth and pressure performance.”
July performance of the Baird/STR Hotel Stock Index was below both the S&P 500 (+1.3%) and the MSCI US REIT Index (+1.1%).
The Hotel Brand sub-index was virtually unchanged from June at a level of 7,843, while the Hotel REIT sub-index dropped 3.2% to 1,473.
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.
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