Industry Update
Press Release 9 September 2019

Baird/STR Hotel Stock Index Drops 6.6% In August

Year to date, the Hotel Stock Index is up 12.1%.

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Smith Travel Research

HENDERSONVILLE, Tennessee, and MILWAUKEE — The Baird/STR Hotel Stock Index dropped 6.6% in August to 4,561. Year to date through the first eight months of 2019, the index is up 12.1%.

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"Hotel stocks declined and underperformed their benchmarks again in August as macroeconomic concerns continue to be front and center for investors," said Michael Bellisario, senior hotel research analyst and VP at Baird. "RevPAR trends have been sluggish lately, broader growth uncertainties remain a headwind for investor sentiment and most hotel management teams expect the slow pace of growth to continue for the remainder of the year, all of which has caused hotel stocks to be relative underperformers in recent months."

"The current performance environment is a seesaw with stops at good, ok and poor news," said Amanda Hite, STR's president and CEO. "In July, the industry sold more rooms than any other month on record, and the RevPAR upcycle hit a record 111 months in a 113-month span. But ADR growth of 0.7% in July and 1.1% year to date is below or just at the level of inflation, which does not bode well for profit growth. All chain scales and classes are equally affected by the lack of ADR and RevPAR growth, and as our latest forecast projects, we do not expect the fundamentals to change rapidly in either direction."

August performance of the Baird/STR Hotel Stock Index was behind both the S&P 500 (-1.8%) and the MSCI US REIT Index (+3.1%).

The Hotel Brand sub-index decreased 7.5% from July to 7,254 while the Hotel REIT sub-index declined 4.5% to 1,407.

About Baird

Celebrating its 100th anniversary in 2019, Baird is an employee-owned, international wealth management, asset management, investment banking/capital markets, and private equity firm with offices in the United States, Europe and Asia. Baird has approximately 3,500 associates serving the needs of individual, corporate, institutional and municipal clients and more than $208 billion in client assets as of Dec. 31, 2018. Committed to being a great workplace, Baird ranked No. 12 on FORTUNE's 2018 100 Best Companies to Work For list. Baird is the marketing name of Baird Financial Group. Baird's principal operating subsidiaries are Robert W. Baird & Co. Incorporated in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird's investment banking and private equity operations. For more information, please visit www.rwbaird.com.

About STR

STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. For more information, please visit str.com.

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