FOR A SECOND month the Baird/STR Hotel Stock Index declined, albeit just 1.1 percent in March. The drop comes a month after a significant 6.9 percent decline in February.
The index closed March at 4,786 points and was down 2.1 percent for the year through the first quarter. That decline is part of a larger market trend, said Baird Vice President and senior hotel research analyst Michael Bellisario.
“Hotel stocks posted mixed results in March as the broader stock market remained volatile,” Bellisario said, adding that investors did show some optimism after Pebblebrook Hotel Trust announced its plans to acquire LaSalle Hotel Properties in March. “Despite the recent mergers and acquisition chatter, investors are not overly excited about hotel stocks, particularly the hotel REITs, as broader industry-specific concerns linger, and investors appear less optimistic about a RevPAR growth reacceleration in the near term.”
However, RevPAR continued growing at a healthy pace in March, said STR President and CEO Amanda Hite. “Although partially driven by hurricane-related demand, February was actually the industry’s 96th consecutive month with a year-over-year RevPAR increase. March will continue that run even with lower results in the last week of the month due to the Easter calendar shift from April. After eight years of growth, industry stakeholders are rightly wondering how long the upcycle can last, but we expect growth for the foreseeable future, albeit at a slower pace.”