The growth in public hotel company stock values finally reversed course in April.
The Baird Hotel Stock Index decreased by 7.1% in April, its first decline of 2024. 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.
In the first three months of the year, the Baird Hotel Stock Index saw varying levels of growth. In January, the index rose 3.3%; in February, the index jumped 6.3%; and in March, growth slowed to 1.9%.
The sub-indexes of both hotel brands and real estate investment trusts declined in April, but the brands performed slightly better. The hotel brand sub-index fell 6.8%, while the hotel REIT sub-index decreased by 8.3%.
The S&P, which represents the health of the broader economy, declined 4.2% in April. The RMZ, or MSCI U.S. REIT Index, which is a gauge of the overall real estate investment market, fell 7.2% for the month.
Year to date, the Baird Hotel Stock Index is up 4%, just behind the S&P 500, which is up 5.6% over the same period. The brand sub-index has increased 6.4% year to date while the REIT sub-index is down 5% and the RMZ has fallen 8.4%.
“Hotel stocks declined in April, and both the hotel brands and hotel REITs underperformed their relative benchmarks,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Higher interest rates and growing investor concerns on the macroeconomic front, particularly related to potentially slower consumer spending, caused the broader stock market to pull back in April. Hotel stocks also were impacted by relatively weaker domestic RevPAR trends in recent months.”
Month over month, Braemar Hotels & Resorts reported the largest gain in stock performance from March to April as its stock jumped 36.5%. Ashford Hospitality Trust stock declined 14.6% from March, outpacing a group of REITs that included Apple Hospitality REIT, Chatham Lodging Trust and others. Wyndham, Choice and Marriott each saw their stock performance decline from March to April.
Year over year, Park Hotels & Resorts' stock jumped 46.7% and was the lone hotel REIT in the top five performers. IHG, Marriott, Hilton and Hyatt rounded out the top five stock performers when compared to April 2023.
Conversely, Ashford Hospitality Trust reported a 65.6% drop in stock performance in April compared to a year ago. Braemar Hotels & Resorts was a distant second with a 28.2% year-over-year stock decline. The only public hotel brand in the bottom five was Choice, which reported a 7.3% year-over-year decrease in stock performance.
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.