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Baird/STR Hotel Stock Index Decreased In December, Notes STR

By Dave Simpson

The Baird/STR Hotel Stock Index decreased by 10% in December, to a level of 4,885, and it decreased by 15% in 2022 as a whole, according to a statement published on the website of hotel industry market data company STR.

Statement By Senior Hotel Research Analyst And Director At Baird

The statement published on STR.com quoted a senior hotel research analyst and director at Baird, Michael Bellisario, as saying, "Hotel stocks ended a relatively strong year on a weak note as recessionary fears and slowing growth concerns were front and center for investors in December, which caused hotel stocks to underperform during the month. Pebblebrook's negative fourth-quarter preliminary earnings announcement caused the hotel REITs to tag in December and reinforced investors' negative sentiment towards the sub-sector. In 2022, the global hotel brands outperformed the S&P 500 by more than 500bps; the hotel REITs outperformed the RMZ by more than 1,000 bps, which was the first year of relative outperformance since 2017. For the year, the global hotel brands topped the hotel REITs by approximately 280 bps."

Statement By STR President

The statement published on STR.com also quoted STR president Amanda Hite as saying, "While the future weighed heavily on investor sentiment, U.S. hotel performance completed the year in solid position,. Room demand in the final month of 2022 was the highest for any December before it – even 2019, the previous record holder. When looking at the full year, demand came in slightly below 2019 levels, and most of that deficit was seen during Q1 when omicron was at its peak. Nominal RevPAR finished the year above the pre-pandemic comparable, and we remain confident that the metric will continue to grow despite the looming recession. Inflation-adjusted RevPAR, however, remained 6% behind the 2019 benchmark, which is considerably better than what was seen three years after the Great Recession."

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The Baird/STR Hotel Stock Index fell behind both the S&P 500 (-5.9%) and the MSCI US REIT Index (-5.8%) in December, according to the statement published on STR.com, which also noted that the Hotel Brand sub-index increased by 9.2% from November, to 8,904, while the Hotel REIT sub-index decreased by 12.8%, to 1,038.

© 2023 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.

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