U.S. Hotel Stocks Down 3.8 Percent for June 2016

The Hotel Brand sub-index reported a 3.5% increase to 4,127 in June. The Hotel REIT sub-index experienced a 4.4% increase to 1,403 during the month.

The Baird/STR Hotel Stock Index increased 3.8% in June to close the month at 3,128. Year to date, the index is up 1.1%. “As year-to-date RevPAR (revenue per available room) rebounded in June, public market activity followed suit,” said Amanda Hite, STR’s president and CEO. “Brexit created uncertainty in the global markets last month, but that appears to have slowed in early July. Rising sentiment, along with an anticipated and usually strong summer for U.S. hotels, will likely lead to more investor confidence.”

“Hotel stocks rebounded in June as fundamentals improved a bit following several months of lackluster growth,” said David Loeb, senior hotel research analyst and managing director at Baird. “The Brexit referendum at the end of the month resulted in a significant amount of capital markets volatility; however, the hotel REITs have disproportionately benefitted since the vote as lower interest rates are expected to boost real estate values as the United States appears to be the safest haven for global capital flows given the heightened level of uncertainties abroad.” The Baird/STR Hotel Stock Index for June outperformed the S&P 500 (+0.1%) but fell short of the performance of the MSCI REIT (RMZ) (+6.3%). The Hotel Brand sub-index reported a 3.5% increase to 4,127 in June. The Hotel REIT sub-index experienced a 4.4% increase to 1,403 during the month.

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.

As of 30 June 2016, the companies that comprised the Baird/STR Hotel Stock Index include: Apple Hospitality REIT, Choice Hotels International, Chesapeake Lodging Trust, DiamondRock Hospitality Company, Extended Stay America, Hilton Worldwide Holdings, Hospitality Properties Trust, Host Hotels & Resorts, Hyatt Hotels Corporation, InterContinental Hotels Group, La Quinta Holdings, LaSalle Hotel Properties, Marriott International, Pebblebrook Hotel Trust, RLJ Lodging Trust, Ryman Hospitality Properties, Starwood Hotels & Resorts Worldwide, Sunstone Hotel Investors, Wyndham Worldwide Corporation, and Xenia Hotels & Resorts.

This communication is not a call to action to engage in a securities transaction and has not been individually tailored to a specific client or targeted group of clients. Research reports on the companies identified in this communication are provided by Robert W. Baird & Co. Incorporated, and are available to clients through their Baird Financial Advisor. This communication does not provide recipients with information or advice that is sufficient on which to base an investment decision. This communication does not take into account the specific investment objectives, financial situation, or need of any particular client and may not be suitable for all types of investors. Recipients should consider the contents of this communication as a single factor in making an investment decision. Additional fundamental and other analyses would be required to make an investment decision about any individual security identified in this release.

Comments:

Wow! This is a big drop for the industry.

posted byJeff Moran reply

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