Baird/STR index up 16.4 percent in January

Lessening fears of a recession encouraged investor confidence

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Baird/STR stock index
The Baird/STR Hotel Stock Index rose 16.4 percent in January, surpassing both the S&P 500 and the MSCI US REIT Index in January, according to STR.

THE BAIRD/STR HOTEL Stock Index jumped 16.4 percent in the first month of 2023, according to STR. A drop in recession fears and other factors gave investor confidence a boost, the research firms said.

In January, the Baird/STR Index surpassed both the S&P 500, up 6.2 percent and the MSCI US REIT Index, increased 10.5 percent, STR said in a report.  The index dropped 10 percent in December, and it was down 15 percent for 2022.

According to STR, the Hotel Brand sub-index increased 16.2 percent from December to 10,342, while the Hotel REIT sub-index rose 17.1 percent to 1,216.

“Hotel stocks rebounded sharply in January and were significant outperformers as the back-and-forth recessionary concerns once again subsided to start the year,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Industry-wide RevPAR trends finished the year on a strong note despite tougher calendar comparisons and weather-related travel disruptions in December. Several Hotel REITs provided fourth-quarter operational updates, and performance generally was in line with prior expectations. More broadly, investor sentiment has improved, which boosted stock prices across the board in January, but the macroeconomic indicators have remained mixed.”

“Altogether, U.S. performance in January felt normal with preliminary data showing the month’s second-highest room demand on record,” said Amanda Hite, STR president. “Our most recent revision to the forecast included a modest upgrade for 2023 with continued RevPAR growth, albeit at a lower level. Industry leaders have displayed quite a bit of confidence in recent weeks, and we share in the positive outlook while expecting gains to slow as ADR growth slips below the rate of inflation. Regardless, the industry is in solid shape with typical seasonal patterns on a week-to-week basis.”