Baird/STR Hotel Stock Index falls 15.3 percent in 2011

The Baird/STR Hotel Stock Index ended December with a 2.7-percent increase to 2,003 and was down 15.3 percent in 2011. The index ended 2010 at 2,364.

Robert W. Baird & Co. and STR partnered to create the Baird/STR Hotel Stock Index-the first widely available U.S. hotel stock index in the hotel industry. The index combines Baird's financial markets expertise, the data processing of STR and the up-to-the-minute distribution capabilities of HotelNewsNow.com, the industry's leading news website.

The Baird/STR Hotel Stock Index outperformed the S&P 500, which was up 0.9 percent in December. The MSCI REIT (RMZ) was up 4.1 percent for the month. The S&P 500 ended 2011 flat and the RMZ was up 4.7 percent for the year.

"While there continues to be considerable turmoil in the financial markets, the lodging stocks included in the RWB/STR Hotel Stock Index rebounded 2.7 percent for the month of December," said Randy Smith, co-founder and chairman at STR. "With industry fundamentals remaining fairly strong through the end of the year including a healthy increase in room demand, very low growth in overall room supply and modest improvements in room rates, 2011 ended on a positive note. As a result, continued strong growth in 2012 will be difficult because of a variety of factors and this concern was reflected in the 15.3-percent decline in the index for full year 2011. Assuming there will be a limited number of disasters this year-either natural or man-made-the outlook for the industry continues to be positive with a modest increase in revenue per available room forecast for the year."

"Hotel stocks performed quite poorly in 2011 despite strong underlying fundamentals. The Index underperformed nearly every month until early fall when investors finally stepped in as valuations became extremely attractive," said David Loeb, senior hotel research analyst and managing director at Baird. "The Index has gained momentum in the last few months, outperforming the broader market and other real-estate sectors, and we expect this trend to continue in 2012 as investors, who are still relatively under-weight hotels, reallocate their portfolios."

As of 1 January 2012, the composition of the Index is changing, with the addition of RLJ Lodging Trust (RLJ) and the removal of Orient-Express Hotels (OEH). RLJ's implied market capitalization is approximately $1.8 billion while OEH's is about $770 million. A complete list of the stocks in the index can be found at www.hotelstockindex.com.

About the Baird/STR Hotel Stock Index

The Baird/STR Hotel Stock Index was set to equal 1,000 on 1 January 2000, as its starting point. The Index reached its peak of 3,178 on 5 July 2007. The Index's lowest point occurred on 6 March 2009, when it dropped to 573.

The Index is available exclusively on www.hotelstockindex.com and www.HotelNewsNow.com. The Baird/STR Hotel Stock Index is a co-branded index created by Robert W. Baird & Co. (Baird) and Smith Travel Research, Inc. (STR). The market-cap weighted Index is comprised of 15 of the largest market capitalization hotel companies publicly traded on a U.S. exchange and attempts to characterize the performance of hotel stocks. The Index is maintained by Baird and is hosted on HotelNewsNow.com. The Index is not actively managed and a direct investment cannot be made in it.

The companies that comprise the Baird/STR Hotel Stock Index: Choice Hotels International, DiamondRock Hospitality, Hersha Hospitality Trust, Hospitality Properties Trust, Host Hotels & Resorts, Hyatt Hotels Corporation, InterContinental Hotels Group, LaSalle Hotel Properties, Marriott International, Pebblebrook Hotel Trust, RLJ Lodging Trust, Starwood Hotels & Resorts Worldwide, Strategic Hotels & Resorts, Sunstone Hotel Investors and Wyndham Worldwide.

About Baird

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 2,600 associates serving the needs of individual, corporate, institutional and municipal clients. Baird oversees and manages client assets of more than $88 billion. Committed to being a great place to work, Baird ranked number 14 on FORTUNE's "100 Best Companies to Work For" in 2011 – its eighth consecutive year on the list. Baird's principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird's private equity operations. For more information, please visit Baird's Web site at www.rwbaird.com.