The Baird/STR Hotel Stock Index in January was up 3.3% overall, fueled by investor confidence in hotel brand companies but held back somewhat by concerns over hotel real estate investment trusts' ability to transact amid persistently high interest rates.
The Hotel Stock 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.
“Hotel stock performance was mixed in January following a two-month, broad-based rally to end 2023, but both the hotel brands and Hotel REITs outperformed their respective benchmarks,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Investors have continued to bid up quality growth stocks, and as a result the hotel brands have been the relative beneficiaries. Higher interest rates to start the year have weighed on real estate stocks and investor sentiment.”
Hotel brand stocks as a sub-index were up 4.6% for the month, while hotel REITs were down 1.9%. The index and both sub-indexes outperformed broader economic indexes. The S&P 500 was up 1.6% in January. The RMZ, or MSCI US REIT Index, which is a gauge of the overall real estate investment market, was down 4.2%.
The Hotel Stock Index ended 2023 up 38.4% compared to the end of 2022.
Of the 20 companies represented on the Hotel Stock Index, only four brands posted gains in January: Choice Hotels International, Marriott International, Hilton and IHG Hotels & Resorts.
Four of the top five year-over-year performances were also by brand companies: Marriott, IHG, Hilton and Hyatt. Ryman Hospitality Properties was the top-performing REIT, with a year-over-year stock value gain of 18.3%.
For more information about the Hotel Stock Index, email hotelstockindex@rwbaird.com.
The Baird/STR Hotel Stock Index and sub-indices are available exclusively on Hotel News Now. The indices are cobranded and were created by Robert W. Baird & Co. (Baird) and STR. 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/STR 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.