Across the hotel industry, public companies are still struggling with dips in stock value.
In May, the Baird Hotel Stock Index decreased by 0.9%, its second consecutive month of decline. The index dropped by 7.1% in April.
The index comprises 20 of the largest hotel brand companies and real estate investment trusts publicly traded on a U.S. stock exchange by market capitalization.
During the month, hotel brands performed better than hotel real estate investment trusts. The hotel brand sub-index slightly outperformed the broader Hotel Stock Index as it declined just 0.4%. However, the hotel REIT sub-index decreased by 3.1%.
The S&P 500, which represents the health of the broader economy, rose 4.8% in May. The RMZ, or MSCI U.S. REIT Index, which is a gauge of the overall real estate investment market, increased 4.5% for the month.
“Hotel stocks declined again in May, and on a relative basis, both the global hotel brands and hotel REITs underperformed their relative benchmarks for the third consecutive month,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Investors are squarely focused on the health of the consumer and the broader spending outlook. Domestic RevPAR growth has been sluggish recently, and the summer travel outlook could be less strong than originally expected.”
Year to date, the Baird Hotel Stock Index is up 3.1%, but still behind the S&P 500 — which is up 10.6% — and the hotel brand sub-index, which has risen 5.9% over the same period. The RMZ is down 4.3% year to date, and the hotel REIT sub-index has fallen 8% year to date.
Month over month, Xenia Hotels & Resorts was the top performer on the Hotel Stock Index; Xenia's stock improved 4.5% from April to May. IHG Hotels & Resorts' stock rose 3.3% to lead all other brand companies in terms of month-over-month performance. On the other end of the spectrum, RLJ Lodging Trust's stock declined 9.3% — the lowest among all hotel REITs — and Choice Hotels International's stock fell 4.3%, outpacing other brands.
Four hotel brand companies took the top spots in terms of year-over-year stock growth, led by IHG at 53.1%. Hilton's stock rose 47.4% year over year, followed by Marriott International — up 37.8% — and Hyatt Hotels Corp., which rose 37.2%. Park Hotels & Resorts' stock rose 34.5% vs. the same month in 2023.
Ashford Hospitality Trust reported the largest year-over-year decrease in stock performance at 71.8%.
For more information about the Hotel Stock Index, email hotelstockindex@rwbaird.com.
The Baird Hotel Stock Index and sub-indices are available exclusively on Hotel News Now. The indices were created by Robert W. Baird & Co. (Baird). The market-cap-weighted, price-only indices comprise 20 of the largest market-capitalization hotel companies publicly traded on a U.S. exchange and attempt to characterize the performance of hotel stocks. The Index and sub-indices are maintained by Baird and hosted on Hotel News Now, are not actively managed, and no direct investment can be made in them. As of 30 June 2021, the companies that comprised the Baird Hotel Stock Index included: Apple Hospitality REIT, Ashford Hospitality Trust, Chatham Lodging Trust, Choice Hotels International, DiamondRock Hospitality Company, Hersha Hospitality Trust, Hilton Inc., Host Hotels & Resorts, Hyatt Hotels, InterContinental Hotels Group, Marriott International, Park Hotels & Resorts, Inc., Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Service Properties Trust, Summit Hotel Properties, Sunstone Hotel Investors, Wyndham Hotels & Resorts, and Xenia Hotels & Resorts.