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

By Dave Simpson

The Baird/STR Hotel Stock Index decreased by 5.8% in May, to a level of 5,584, and it decreased by 2.8% in the year to date, through the first five months of 2022, according to a statement published on the website of hotel industry market data company STR.

Statement By Baird’s Senior Hotel Research Analyst And Director

The statement published on STR.com included one from the senior hotel research analyst and director at Baird, Michael Bellisario, wherein he said, "Hotel stocks declined in May amid the broader stock market volatility as investors grew concerned about macroeconomic slowing and inflationary pressures, among other risks and uncertainties. Hotel fundamentals have continued to improve and are showing no signs of slowing; the demand recovery is broadening, the harder-hit urban markets are rebounding, and midweek business travel is coming back at a strong pace. Despite the positive fundamental momentum, investors remain a bit skeptical and are focused on the health of the consumer amid a slowing growth backdrop."

Statement By STR's President

The statement published on STR.com also included one from its president, Amanda Hite, wherein she said, "Despite macroeconomic uncertainty, consumer spending on travel and hotel rooms has continued. In-person graduation ceremonies drove May performance in many university-based markets, such as New York City, which reached an occupancy level of nearly 90% - its busiest week of the pandemic-era. Leisure markets continue to show strong performance levels, with room rate growth as the prominent bright spot for the industry. Our latest forecast, released early last week at NYU, upgraded the recovery timeline for nominal RevPAR. We expect both nominal ADR and RevPAR to surpass 2019 levels in 2022. Due to increases in new supply and slower corporate demand recovery, occupancy is not forecasted to reach 2019 levels until 2024."

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The Baird/STR Hotel Stock Index fell behind both the S&P 500 (flat) but surpassed the MSCI US REIT Index (-6.3%) in May, according to the statement published on STR.com, which also noted that the Hotel Brand sub-index decreased by 6.0% from April, to 9,924, while the Hotel REIT sub-index decreased by 4.9%, to 1,288.

© 2022 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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