The Baird/STR Hotel Stock Index dipped 0.2% in March to a level of 5,131. Year to date through the first three months of 2021, the stock index was up 12.2%.
“Hotel stocks were relatively flat in March but underperformed their benchmarks as investors rotated into more defensive and value-oriented sectors,” said Michael Bellisario, senior hotel research analyst and director at Baird. “The pent-up demand expectation is becoming a reality, and broader travel trends continue to improve as vaccination rates improve; with leisure strength well understood at this point, we expect the focus to begin shifting to the business traveler and what the demand environment might look like later this year.”
“March produced weekly occupancy levels that were the best in the U.S. in a year, supported by healthy leisure and spring break demand,” said Amanda Hite, STR president. “U.S. room demand during Q1 actually trended slightly ahead of our forecast, reflecting the acceleration in vaccine distribution and travel. TSA checkpoints have now registered more than 1 million flyers since March 11, which combined with slowly rising Wednesday occupancy levels, can be seen as an indicator that corporate transient demand is also returning. Our forecast still calls for a return of group travelers in the later part of the year.”
In March, the Baird/STR Hotel Stock Index fell behind both the S&P 500 (+4.2%) and the MSCI US REIT Index (+3.9%).
The Hotel Brand sub-index decreased 0.3% from February to 8,811, while the Hotel REIT sub-index came in flat at 1,304.
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 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 31 March 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.