U.S. Hotel Stocks Up 7.8% in January

The Baird/STR Hotel Stock Index opened the year with a 7.8% increase and finished January at a level of 4,388.

"Hotel stocks snapped back with the broader stock market in January after a challenging fourth quarter last year," said Michael Bellisario, senior hotel research analyst and VP at Baird. "The hotel REITs and the hotel brands jumped 12.4% and 5.5%, respectively, in January, but both sub-indices are still well off their recent highs. Stocks ended last year in an oversold position with investor sentiment too negative, in our opinion, and all eyes are now focused on 2019 guidance and how all of the recent capital markets volatility and the government shutdown are impacting hotel demand."

"More positive investor sentiment was encouraging given the performance uncertainty that came from opening the year with a government shutdown," said Amanda Hite, STR's president and CEO. "Our latest forecast released at ALIS projects further flattening of occupancy and continued tepid ADR growth. The mood at ALIS aligns with our expectations for good, not great performance, moving forward."

The increase in the Baird/STR Hotel Stock Index was below both the S&P 500 (+7.9%) and the MSCI US REIT Index (+11.6%).

The Hotel Brand sub-index rose 5.5% from December to 6,496, while the Hotel REIT sub-index jumped 12.4% to 1,562.

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.