AFTER MONTHS OF maintaining growth despite the COVID-19 pandemic, the Baird/STR Hotel Stock Index fell 5.3 percent in June. Investors apparently grew cautious as cases of the virus spiked in some states.
The index was down 41.9 percent year-to-date, an increase from negative 38.7 percent in May.
“Hotel stocks were volatile in June as the broader reopening trade continued into the early part of the month; the Hotel Brand and Hotel REIT Sub-Indices were up more than 19 percent and nearly 37 percent, respectively, through six trading days,” said Michael Bellisario, senior hotel research analyst and director at Baird. “However, the momentum reversed course, and hotel stocks finished the month approximately 5 percent lower as rising coronavirus case counts in several states dampened investor sentiment and negatively impacted travel-related stocks.”
The Baird/STR Index fell behind the S&P 500, up 1.8 percent, for the month and the MSCI US REIT Index that rose 2.5 percent. The hotel brand sub-index dropped 5.4 percent from May to 5,332, while the hotel REIT sub-index was down 4.9 percent to 746.
“Different metrics seem to point to opposite stories,” said Amanda Hite, STR’s president. “On one hand, RevPAR declines continue to ease, and occupancy continues to grow nationally and by scale. On the other hand, the continued acceleration in positive COVID cases could have implications for the U.S. hotel industry if it means that states slow or reverse their opening. This then would not only impact transient demand, but also, as importantly, group demand. If governors decide that congregations of 10 or more people should be discouraged, then the meetings industry’s recovery will be that farther off.”