The Baird/STR Hotel Stock Index decreased 1.9% in August, closing the month at 4,099. Year to date through the first eight months of 2017, the index was up 10.7%.
Hotel stocks underperformed in August amid increased stock market volatility and heightened geopolitical uncertainties, said Michael Bellisario, Senior Hotel Research Analyst and Vice President at Baird. Overall industry growth trends remain sluggish, and difficult calendar comparisons in September should lead to anemic growth during the month, which could keep managements and investors expectations in check after modestly weaker-than-expected fundamentals over the prior few months.
A more bearish sentiment around the investment community is not surprising given the slower performance growth rates around the industry, said Amanda Hite, STRs president and CEO. While hotel demand continued to grow at a healthy clip this summer, we will likely see a negative impact on performance results for Q3 due to the calendar shift around the Jewish holidays (October 2016 to September 2017). It is also too early to gauge the hotel performance impact of Hurricane Harvey and its aftermath, and the developing situation around Hurricane Irma may add more uncertainty to the industry outlook.
The Baird/STR Hotel Stock Index for August lagged behind the performance of both the S&P 500 (+0.1%) and the MSCI REIT (RMZ) (-0.5%).
The Hotel Brand sub-index decreased 1.0% to 5,885 from July to August, while the Hotel REIT sub-index fell 3.6% to 1,560 during the month.