The stock prices of publicly traded hotel companies rebounded in August following a disappointing July.
The Baird Hotel Stock Index — which comprises 20 of the largest hotel brand companies and real estate investment trusts publicly traded on a U.S. stock exchange by market capitalization — rose 2.1% in August.
The Hotel Stock Index has risen in two of the past three months. In July, the index fell 2.9%, and in June, it jumped 4.4%. Year to date, the Hotel Stock Index has increased in five of the first eight months of the year.
The S&P 500 — an indicator of the health of the broader economy — rose 2.3% in August, just outpacing the Hotel Stock Index. The RMZ, or MSCI U.S. REIT Index — which is a gauge of the overall real estate investment market — rose 6.3% after a 6.1% increase in July.
The hotel brand sub-index rose 2.4%, while the hotel REIT sub-index increased just 0.8% for the month.
“Hotel stocks gained 2% in August as both the global hotel brands and hotel REITs increased,” said Michael Bellisario, senior hotel research analyst and director at Baird. “The global hotel brands performed in line with the S&P 500’s performance, while the hotel REITs underperformed the broader real estate index as interest rates declined and investors favored longer-lease duration sub-sectors. Post-Labor Day, the focus shifts to business and group travel, which should support RevPAR growth better than leisure travel did during the summer months.”
Month over month, Summit Hotel Properties and DiamondRock Hospitality Company reported the highest jumps in stock performance. Meanwhile, Braemar Hotels & Resorts' stock fell 12.4% since July, which was the worst-performing stock among public hotel companies month over month. Ashford Hospitality Trust's stock fell 9.4% month over month.
Year over year, three public hotel brand companies led the way in terms of stock performance. Hilton's stock rose 47.8%, Hyatt Hotels Corp.'s stock jumped 35.1% and IHG Hotels & Resorts' stock increased 32.3%. Park Hotels & Resorts was the highest-performing hotel REIT with a 31.2% increase over last year. Ashford Hospitality Trust's stock fell 68.3% year over year.
Through August, the Hotel Stock Index is up 6.7%. The index's year-to-date performance lags the S&P 500 — which is up 18.4% — and the RMZ, which is up 10.2% over the same period. The hotel brand sub-index is up 10.8% year to date while the hotel REIT sub-index is down 9.2%.
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.