Baird/STR Hotel Stock Index dropped 10% in December, ended year down 15%

HENDERSONVILLE, Tennessee, and MILWAUKEE - The Baird/STR Hotel Stock Index dropped 10% in December to a level of 4,885. For 2022 as a whole, the stock index was down 15%.

Hotel stocks ended a relatively strong year on a weak note as recessionary fears and slowing growth concerns were front and center for investors in December, which caused hotel stocks to underperform during the month. Pebblebrook's negative fourth-quarter preliminary earnings announcement caused the hotel REITs to tag in December and reinforced investors' negative sentiment towards the sub-sector. In 2022, the global hotel brands outperformed the S&P 500 by more than 500bps; the hotel REITs outperformed the RMZ by more than 1,000 bps, which was the first year of relative outperformance since 2017. For the year, the global hotel brands topped the hotel REITs by approximately 280 bps. Michael Bellisario, senior hotel research analyst and director at Baird

While the future weighed heavily on investor sentiment, U.S. hotel performance completed the year in solid position. Room demand in the final month of 2022 was the highest for any December before it – even 2019, the previous record holder. When looking at the full year, demand came in slightly below 2019 levels, and most of that deficit was seen during Q1 when omicron was at its peak. Nominal RevPAR finished the year above the pre-pandemic comparable, and we remain confident that the metric will continue to grow despite the looming recession. Inflation-adjusted RevPAR, however, remained 6% behind the 2019 benchmark, which is considerably better than what was seen three years after the Great Recession. Amanda Hite, STR’s president

In December, the Baird/STR Hotel Stock Index fell behind both the S&P 500 (-5.9%) and the MSCI US REIT Index (-5.8%).

The Hotel Brand sub-index decreased 9.2% from November to 8,904, while the Hotel REIT sub-index fell 12.8% to 1,038.

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 Hotel News Now. The indices are cobranded and were created by Robert W. Baird & Co. (Baird) and STR. The market-cap-weighted, price-only indices comprise 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 31 December 2022, the companies that comprised the Baird/STR Hotel Stock Index included: Apple Hospitality REIT, Ashford Hospitality Trust, Chatham Lodging Trust, Choice Hotels International, DiamondRock Hospitality Company, Hersha Hospitality Trust, Hilton Inc., Host Hotels & Resorts, Hyatt Hotels, InterContinental Hotels Group, Marriott International, Park Hotels & Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Service Properties Trust, Summit Hotel Properties, Sunstone Hotel Investors, Wyndham Hotels & Resorts, 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.

About Baird

Putting clients first since 1919, 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 4,600 associates serving the needs of individual, corporate, institutional and municipal clients and more than $415 billion in client assets as of Dec. 31, 2021. Committed to being a great workplace, Baird ranked No. 27 on the 2022 Fortune 100 Best Companies to Work For® list – its 19th consecutive year on the list. Baird is the marketing name of Baird Financial Group. Baird’s principal operating subsidiaries are Robert W. Baird & Co. Incorporated and Baird Trust Company 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 Baird’s website at www.rwbaird.com.

About STR

STR provides premium data benchmarking, analytics and marketplace insights for the global hospitality industry. Founded in 1985, STR maintains a presence in 15 countries with a North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com and costargroup.com.

Haley Luther
Communications Manager
+1 (216) 278 0627
STR