HOTEL STOCKS ROSE in April, according to the Baird/STR Hotel Stock Index, but they were behind the rest of the market. However, the industry’s recovery is expected to continue in full.
The index rose 3.2 percent in April after falling 0.2 percent in March, and it was up 15.8 percent year to date. It was behind the S&P 500, which rose 5.2 percent during the month, and the MSCI US REIT Index, up 7.9 percent.
“Hotel stock prices increased in April, but they were relative underperformers on a monthly basis for the third time this year,” said Michael Bellisario, senior hotel research analyst and director at Baird. “The broader reopening trade has lost some momentum recently as investors continue to rotate into more defensive and value-oriented sectors despite the progress that is being made on the vaccination front and the sequential monthly improvement in hotel fundamentals being realized. The Hotel REITs have outperformed the Hotel Brand stocks each month this year.”
The index’s underperformance is not necessarily a point of concern, according to Amanda Hite, STR president.
“The first quarter of the year produced stronger room demand than expected as American consumers, emboldened by ongoing vaccinations and plenty of savings, are buying the experiences they had to forego for the last year,” Hite said. “This translated directly to higher occupancies, especially on weekends. Luxury hotels actually showed a higher March ADR than in March of 2019, pointing to the resilience of the offerings at the highest end of the market. STR and Tourism Economics will likely revise our new forecast upward, not because demand will exceed expectations for the remainder of 2021, but because of the strength of the first quarter.”
The hotel brand sub-index increased 2.8 percent from March, while the hotel REIT sub-index grew 4.4 percent.