THE BAIRD/STR hotel stock index rose 7 percent in November to 4,968. The increase indicates that some investor optimism remains despite the industry’s recent RevPAR decreases, STR analysts said.
The index was up 22.1 percent year to date through the first 11 months of 2019. The November performance surpassed both the S&P 500 and the MSCI US REIT Index. The S&P 500 saw a 3.4 percent growth while the MSCI US REIT Index decreased 1.8 percent.
Hotel brands posted the largest monthly percentage increase for the year and performed better than the hotel REITs, said Baird Vice President and Senior Research Analyst Michael Bellisario.
“The broader risk-on trade in November, which has continued in December, caused investors to become more optimistic about the prospects for continued economic growth despite still-soft industry RevPAR growth trends,” Bellisario said.
The Hotel Brand sub-index recorded a 9.1 percent increase from October to 8,035, while the Hotel REIT sub-index rose 2.5 percent to 1,474.
“Despite RevPAR decreases in three of the last five months, the hotel stock index has posted gains in three consecutive months,” said Amanda Hite, STR’s president. “Our latest forecast revision projects RevPAR growth to come in below 1 percent for both 2019 and 2020, so in terms of performance growth, these will be the hotel industry’s worst years since the recession. However, it appears that investors are placing greater consideration on net unit growth.”