THE BAIRD/STR HOTEL Stock Index rose 1.6 percent in September to 4,634. The rise comes after a 6.6 percent drop in August.
The index was up 13.9 percent year to date through the first nine months of 2019. The September performance, however, lagged behind both the S&P and the MSCI US REIT Index, which grew 1.7 percent and 2.3 percent respectively during the month.
The modest gains in hotel stocks were driven entirely by a rebound in the Hotel REIT Sub-Index, said Baird Vice President and Senior Research Analyst Michael Bellisario.
“Interest rates increased and stock market volatility declined during the month, both of which benefitted the hotel REITs more than the hotel brands on both an absolute and relative basis,” Bellisario said.
The Hotel Brand sub-index recorded a 0.2 decrease from August to 7,238, while the Hotel REIT sub-index increased 5.6 percent to 1,486.
“Any positive with the hotel stock index as a whole is encouraging given recent industry fundamentals,” said Amanda Hite, STR’s president and CEO. “Pricing weakness continues to weigh on operators’ minds, and continued healthy demand growth is not translating into higher occupancies as new supply is also on the climb. Add wider macroeconomic and political uncertainty to the equation, and we’re likely to see dampened enthusiasm around the industry continue.”