The Baird/STR Hotel Stock Index outperformed the S&P 500 and the MSCI REIT (RMZ) during January.
The Baird/STR Hotel Stock Index closed January at 5,200, up 6.4% from the end of 2017.
“Hotel stocks outperformed in January for the fifth consecutive month, and the hotel REITs were the bigger relative winners as interest rates moved higher throughout the month and investors rotated into shorter lease duration real estate sectors,” said Michael Bellisario, senior hotel research analyst and vice president at Baird. “While the potential for RevPAR growth to accelerate in 2018 remains topical, higher interest rates are becoming an increasing focus and could offset some of the expected uptick in economic growth, which we believe is worth keeping a close eye on as absolute valuation levels have moved much higher in recent months.”
“Another record year for industry performance only strengthened the investment community’s confidence in hotel stocks to open the year,” said Amanda Hite, STR’s president and CEO. “We would anticipate that trend to continue, as we’ve forecasted continued performance growth through 2019 underpinned by strong economic indicators and upgraded GDP forecasts.”
The Baird/STR Hotel Stock Index for January outperformed the S&P 500 (+5.6%) and the MSCI REIT (RMZ) (-4.3%).
The Hotel Brand sub-index increased 7.8% to 7,937 from December to January. The Hotel REIT sub-index increased 3.2% to 1,738.
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 31 January 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.