Baird/STR hotel stock index jumped 15.8 percent in October

The index decreased 8 percent year-to-date, but outlook remains strong

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STR hotel stock index Oct'22
The Baird/STR Hotel Stock Index rose 15.8 percent in October, according to STR. The index outgrew both the S&P 500, up 8 percent, and the MSCI US REIT Index, which increased 4.7 percent.

THE BAIRD/STR Hotel Stock Index jumped 15.8 percent in October, according to STR. There were no signs of slowing as U.S. demand continued to strengthen during the month.

The index decreased 8 percent year-to-date through the first ten months of 2022. The index fell 9.1 percent in September. In October, the index outgrew both the S&P 500, up 8 percent and the MSCI US REIT Index, increased 4.7 percent. The hotel brand sub-index increased 14.4 percent from September to 9,458, while the hotel REIT sub-index grew 20.6 percent to 1,193.

“October was a strong rebound month for hotel stocks, and they recouped all their losses from the prior two months,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Importantly, both the global hotel brands and the hotel REITs were relative outperformers versus their respective benchmarks in October. As investors shifted their focus from broader macroeconomic uncertainties to sector-specific performance ahead of and through third-quarter earnings reports, hotels continued to screen favorably given still-strong underlying fundamentals and an intact post-pandemic recovery thesis.”

While the forecast for the coming year remains uncertain, the industry outlook is mostly positive, said Amanda Hite, STR president.

“Despite worries around the likely recession on the horizon, October showed no signs of slowing as U.S. demand continued to strengthen,” Hite said. “Multiple pandemic-era highs were recorded during the month, specifically demand for the group segment and the Top 25 Markets. We expect these strong demand trends to continue through the fourth quarter with a strong holiday period and increased group activity into the beginning of 2023.”