Baird/STR Hotel Stock Index posts solid gains in September
“Hotel stocks posted solid gains in September as investors bid up more economically sensitive sectors, including both the hotel brand companies and the hotel REITs,” said Michael Bellisario, Senior Hotel Research Analyst and Vice President at Baird. “Higher interest rates, improved prospects for potential tax reform, and expected hurricane-related demand tailwinds helped stocks easily outperform their benchmarks last month. Fundamentals have remained steady, but investors have extended their investment time horizons and are more optimistic about next year’s growth prospects.”
“Despite the fact that there was a calendar shift with the Jewish high holidays (October last year), preliminary performance results point to a healthy September and a record occupancy level for the first ninth months of the year,” said Amanda Hite, STR’s president and CEO. “The massive hurricanes in Texas and Florida affected demand and will likely have implications on the development pipeline moving forward. Because of the aforementioned Jewish holiday calendar shift, and the very disruptive hurricane season, September and October data will be hard to parse for trends. By the time a more ‘normal’ November comes around, the year will basically be done, but we still expect that room demand growth will be slightly higher and ADR growth slightly lower than previously projected.”
The Baird/STR Hotel Stock Index for September was ahead of the performance of both the S&P 500 (+1.9 percent) and the MSCI REIT (RMZ) (-0.7 percent).
The Hotel Brand sub-index increased 6.2 percent to 6,249 from August to September, while the Hotel REIT sub-index increased 3.7 percent to 1,618 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.
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 September 2017, the companies that comprised the Baird/STR Hotel Stock Index include: 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.