THE BAIRD/STR Hotel Stock Index dropped 10 percent in December and decreased 15 percent for 2022 mainly due to recessionary fears and concerns over slowing growth, according to STR.
In December, the Baird/STR Hotel Stock Index fell behind both the S&P 500, down 5.9 percent and the MSCI US REIT Index, dropped 5.8 percent. The index rose 2.7 percent in November. The hotel brand sub-index decreased 9.2 percent from November to 8,904, while the hotel REIT sub-index fell 12.8 percent to 1,038.
“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,” said Michael Bellisario, senior hotel research analyst and director at Baird. “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 500 bps; 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."
Despite investors’ concerns for the future, U.S. hotels were in a solid position by the end of 2022, said Amanda Hite, STR president.
“Room demand in the final month of 2022 was the highest for any December before it – even 2019, the previous record holder,” she said. “When looking at the full year, demand came in slightly below 2019 levels, and most of that deficit was seen during the first quarter 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 percent behind the 2019 benchmark, which is considerably better than what was seen three years after the Great Recession.”
Sonesta launched Americas Best Value Studios, an extended-stay version of ABVI.
The model targets owners seeking limited front desk and housekeeping.
The brand meets demand for longer-term, value-focused stays.
SONESTA INTERNATIONAL HOTELS Corp. launched Americas Best Value Studios by Sonesta, an extended-stay version of its franchised brand, Americas Best Value Inn. The model targets owners seeking limited front desk and housekeeping, optional fitness center and lobby market along with standard brand requirements.
The brand aims to address the growing demand for longer-term, value-driven accommodations, Sonesta said in a statement.
"Americas Best Value Studios by Sonesta represents a strategic evolution of our trusted Americas Best Value Inn brand," Keith Pierce, Sonesta’s executive vice president and president of franchise development, said. "We are expanding our offerings to directly address the increasing demand within the extended-stay segment, providing a practical solution for travelers seeking longer-term lodging at value. This new brand type allows our local franchised owner-operators to tap into a growing market while maintaining the community-focused experience that Americas Best Value Inn is known for."
ABVI has a majority presence in secondary and tertiary markets, the statement said.
The extended-stay brand’s operational model features a front desk, bi-weekly housekeeping, on-site laundry and pet-friendly accommodations, Sonesta said. Guests can also earn or redeem points through the Sonesta Travel Pass loyalty program.
In August, Sonesta named Stayntouch its preferred property management system after a two-year review of its ability to support the company’s franchise model. The company operates more than 1,100 properties with more than 100,000 rooms across 13 brands on three continents.
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