“It’s interesting to see hotel stocks in general continue to underperform as a whole while the hotel industry overall continues to exhibit strong performance metrics across the board,” said Randy Smith, chairman and co-founder of STR, Inc. “Somewhat volatile economic conditions and political instability around the world continue to be the potential Achilles’ heel for the hotel industry, but in general, we’re bullish about the overall state of the industry.”
“Hotel stocks posted their fourth consecutive month of negative returns,” said David Loeb, senior hotel research analyst and managing director at Baird. “Hotel REITs were the relative outperformers while the Hotel Brands were the relative underperformers. Rising interest rates caused real-estate-dedicated investors to focus more on higher-growth sectors like hotels, but recent macroeconomic and political turmoil in Greece, particularly toward the end of the month, caused the more globally-exposed brands to underperform. Fundamentals, especially domestically, remain quite strong and most now expect the lodging up cycle to continue into at least 2017.”
The Baird/STR Hotel Stock Index for June outperformed the MSCI REIT (RMZ) (-5.1 percent) but lagged the performance of the S&P 500 (-2.1 percent).
The Hotel Brand sub-index reported a 3.9-percent decrease to 4,808. The Hotel REIT sub-index experienced a 1.8-percent decrease to 1,704 during the month.