The Baird/STR performance was behind both the S&P 500 and the MSCI US REIT Index, which grew 2 percent and 1.3 percent respectively.

THE BAIRD/STR Hotel Stock Index rose 0.2 percent in October to 4,641. The index was up 14 percent year to date through the first 10 months of 2019.

The performance was behind both the S&P 500 and the MSCI US REIT Index, which grew 2 percent and 1.3 percent respectively. The index rose 1.6 percent in September but dropped 6.6 percent in August.

Hotel stocks had mixed performance in October and the hotel brands outgained the hotel REITs by nearly five percentage points, said Baird Vice President and Senior Research Analyst Michael Bellisario.

“Third-quarter earnings have been highlighted by slower growth trends and reduced forward-looking guidance, which have negatively impacted the hotel REITs more than the hotel brands,” Bellisario said.

The hotel brand sub-index increased 1.7 percent from the previous month while the hotel REIT sub-index declined 3.2 percent to 1,438.

“Industry fundamentals and investor sentiment don’t always align, but with that said, October was a pretty good month for hotel stocks considering the latest RevPAR trend,” said Amanda Hite, STR’s president. “With two months of RevPAR declines in the books thus far in 2019, the year is shaping up to come in well below the expectations of analysts and operators alike. We continue to monitor the lack of hotelier pricing power as a concerning sign as the industry has now shown ADR increases below the level of inflation for five consecutive quarters. While supply increases at the national level are manageable, demand increases have only been in line with those increases, meaning that the occupancy change for 2019 is basically flat. All RevPAR increases are ADR-driven, and those increases are and will be muted going forward.”