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Baird/STR Hotel Stock Index increases 3.3% in December, ends year up 32.0%

January 12, 2018 Hotel Trends No Comments Email Email

The Baird/STR Hotel Stock Index increased 3.3% in December, closing the month at 4,888. For total-year 2017, the index was up 32.0%. 

“Hotel stocks outperformed in December, primarily led by gains from the brand companies, which significantly outperformed the broader market in 2017,” said Michael Bellisario, senior hotel research analyst and VP at Baird. “Stock valuation multiples continue to increase, particularly for the brand companies, and investors remain upbeat about the potential for better RevPAR growth in 2018 given the strong macroeconomic backdrop and several additional potential demand-related tailwinds.”

“Monthly performance figures have foreshadowed the performance trends to come during the first quarter of 2018,” said Amanda Hite, STR’s president and CEO. “Demand growth has continued unabated, and while healthy, supply growth is not a significant headwind on a national level. As seen during the last quarter, Texas and Florida data is still supported by hurricane-related demand, and we expect this to continue into the first few months of 2018. ADR growth was and will be the main driver for RevPAR and profit growth.”

The Baird/STR Hotel Stock Index for December outperformed the S&P 500 (+1.0%) and the MSCI REIT (RMZ) (-0.8%).

The Hotel Brand sub-index increased 5.0% to 7,363 from November to December, while the Hotel REIT sub-index decreased 0.4% to 1,684. For the year, the Hotel Brand sub-index was up 49.9%. The Hotel REIT sub-index grew 2.7% in 2017.

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