The Baird/STR Hotel Stock Index jumped 14.3% in July to a level of 5,158. Year to date through the first seven months of 2022, the stock index decreased 10.4%.
“Hotel stocks rebounded sharply and outperformed their respective benchmarks in July; relative outperformance has continued in August,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Despite the big gains in July, hotel stocks did not fully recapture June’s losses. Positively, second quarter earnings exceeded analysts’ and investors’ expectations, and broader recession fears have begun to subside, which has boosted sentiment and stock prices. All eyes are on the post-Labor Day outlook that should reflect a more normalized travel environment.”
“Echoed by the positive sentiment expressed in Q2 earnings calls, U.S. hotel performance continues to support a positive outlook,” said Amanda Hite, STR president. “Last week at the Hotel Data Conference, we unveiled our latest forecast, which lifted ADR projections once again as second quarter room rates exceeded expectations. Moving forward, we anticipate continued robust ADR growth in a positive demand environment. With the fall season fast approaching, all eyes will be on group and corporate transient demand as leisure travel traditionally slows during this period. Group travel, thus far, has been one of the recovery success stories, while individual corporate travel continues to lag. Business transient is gaining traction, but we don’t expect a return to pre-pandemic levels for some time.”
In July, the Baird/STR Hotel Stock Index surpassed both the S&P 500 (+9.1%) and the MSCI US REIT Index (+8.7%).
The Hotel Brand sub-index rose 14.2% from June to 9,171, while the Hotel REIT sub-index increased 14.6% to 1,188.