THE BAIRD/STR hotel stock index dropped significantly in May, 4.9 percent to 4,645 points. However, the index was up 14.1 percent through this year’s first five months.
Just like the previous month, the Baird/STR performed better than S&P 500, which was down 6.6 percent. But it fell below the MSCI US REIT Index which remained flat.
The Hotel Brand sub-index decreased 4.1 percent from April to 7,216 while the Hotel REIT sub-index declined 6.7 percent to 1,506.
“Hotel stocks fell in May and tracked the pullback that occurred in the broader stock market during the month,” said Michael Bellisario, senior hotel research analyst and vice president at Baird. “With volatility increasing and interest rates falling due to heightened concerns surrounding tariffs and slower macroeconomic growth, hotel stocks expectedly declined. While the Hotel Brand Sub-Index modestly outperformed the broader stock market, the Hotel REIT Sub-Index materially underperformed its real estate benchmark as investors became more defensively positioned.”
This negative shift is not surprising, said STR president and CEO Amanda Hite.
“We’re aligned with industry stakeholders with concern over trade wars, labor costs and inbound tourism, but indicators remain in place for positive performance moving forward, especially during the busy summer months,” she said.