“Hotel stocks experienced one of their worst months on record as investors contemplated worst-case liquidity scenarios for hotel companies driven by the COVID-19 demand shock and potential hotel closures,” said Michael Bellisario, senior hotel research analyst, and director at Baird. “Overall, the majority of the publicly traded hotel companies are generally well-capitalized, especially relative to private hotel owners, but the ultimate length and depth of the demand shock remain the key wildcards.”
“Hotel performance declines have been severe around the world, and decreases will likely continue for most markets until we see significant signs of containment of COVID-19,” said Amanda Hite, STR’s president. “In the U.S., occupancy levels have fallen to unprecedented lows, and we are forecasting a 50.6% drop in RevPAR for the year. The industry will be positioned for recovery once concerns are abated, but there is obviously great uncertainty on when that time will come.”
March performance of the Baird/STR Hotel Stock Index posted greater declines than both the S&P 500 (-12.5%) and the MSCI US REIT Index (-22.2%).
The Hotel Brand sub-index decreased by 34.5% from February to 4,712, while the Hotel REIT sub-index declined 40.0% to 702.