The Baird/STR Hotel Stock Index jumped 22.4% in February to a level of 5,141. Year to date through the first two months of 2021, the stock index was up 12.4%.
“Hotel stocks posted huge gains in February as the reopening and reflation trade momentum caused many hotel brands and hotel REITs to reach new post-pandemic highs,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Investors appear willing to pay up today for several years of expected growth, and improving vaccine distribution and declining case counts have caused investors to become even more optimistic about the prospects for a significant improvement in demand during the second half of the year and in 2022.”
“Investor sentiment clearly reflects the focus on future developments as our current data still shows RevPAR declines around 50%,” said Amanda Hite, STR president. “We do expect that additional vaccine production will give rise to an increase in traveler confidence but not beyond what has already been forecasted. Green shoots are emerging, and some markets in Florida are already seeing healthy demand numbers, but the U.S. overall will not see a sustained recovery until the summer.”
In February, the Baird/STR Hotel Stock Index outperformed both the S&P 500 (+2.6%) and the MSCI US REIT Index (+3.8%).
The Hotel Brand sub-index increased 22.0% from January to 8,833, while the Hotel REIT sub-index rose 23.6% to 1,305.
About the Baird/STR Hotel Stock Index and Sub-Indices
The Baird/STR Hotel Stock Index was set to equal 1,000 on 1 January 2000. Last cycle, the Index peaked at 3,178 on 5 July 2007. The Index’s low point occurred on 6 March 2009 when it dropped to 573.
The Hotel Brand sub-index was set to equal 1,000 on 1 January 2000. Last cycle, the sub-index peaked at 3,407 on 5 July 2007. The sub-index’s low point occurred on 6 March 2009 when it dropped to 722.
The Hotel REIT sub-index was set to equal 1,000 on 1 January 2000. Last cycle, the sub-index peaked at 2,555 on 2 February 2007. The sub-index’s low point occurred on 5 March 2009 when it dropped to 298.
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 28 February 2021, the companies that comprised the Baird/STR Hotel Stock Index included: Apple Hospitality REIT, Chatham Lodging Trust, Choice Hotels International, DiamondRock Hospitality Company, Extended Stay America, 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.
Baird is an employee-owned, international wealth management, asset management, investment banking/capital markets, and private equity firm with offices in the United States, Europe and Asia. Established in 1919, Baird has approximately 4,600 associates serving the needs of individual, corporate, institutional and municipal clients and more than $305 billion in client assets as of June 30, 2020. Committed to being a great workplace, Baird ranked No. 13 on the Fortune 100 Best Companies to Work For® list in 2020 – its 17th consecutive year on the list. Baird is the marketing name of Baird Financial Group. Baird’s principal operating subsidiaries are Robert W. Baird & Co. Incorporated in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s investment banking and private equity operations. For more information, please visit Baird’s website at www.rwbaird.com.