The Baird/STR Hotel Stock Index was up 31.0% in November to a level of 4,354. Year to date through the first 11 months of 2020, the stock index was down 17.4%.
“Election clarity and several positive vaccine updates caused a sharp reversal in investor expectations and led to significant outperformance for hotel stocks during November,” said Michael Bellisario, senior hotel research analyst and director at Baird. “The positive vaccine updates allow investors to look to ‘the other side’ and reset their expectations for growth in 2022 and beyond. Worst-case scenarios, especially for the hotel REITs, are unlikely to unfold as previously feared, and more clarity exists regarding the timing of the broader travel recovery.”
“Owners and operators can be excused for showing whiplash symptoms as the news governing the U.S. hotel industry was both good and bad in November,” said Amanda Hite, STR president. “Multiple vaccine trials awaiting emergency authorization are seen as signs that the travel industry can count on some recovery in 2021 and that corporate transient and group demand could return in force. The rise in hotel stock prices certainly seems to have priced that in. On the other hand, the continued rapid increase in COVID-19 cases continues to put a damper on room demand. As offices remain empty and CDC officials urge Americans to stay home, hotel occupancies continue to wane and there is no change to that pattern in sight.”
The Baird/STR Hotel Stock Index in November outperformed both the S&P 500 (+10.8%) and the MSCI US REIT Index (+10.6%).
The Hotel Brand sub-index increased 26.3% from October to 7,570, while the Hotel REIT sub-index jumped 47.7% to 1,068.
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.