The Baird/STR Hotel Stock Index during May lagged the performance of the S&P 500 (+1.0 percent) and the MSCI REIT (RMZ) (-0.5 percent).
HENDERSONVILLE, TENNESSEE, and MILWAUKEE – The Baird/STR Hotel Stock Index decreased 1.3 percent in May to close the month at 3,817.
“Investors are obviously concerned about real estate-oriented companies, and the hotel industry is a notable segment of real estate,” said Randy Smith, chairman and co-founder of STR, Inc. “We’re somewhat surprised by this sentiment as the hotel industry continues to have strong performance metrics, and we believe that performance will continue into the foreseeable future. The nervousness from investors about hotels, and hotel REITs in particular, could stabilize once it becomes clear which direction The Fed is going to take with interest rates.”
“Hotel stocks continued their underperformance in May despite strong first-quarter earnings reports,” said David Loeb, senior hotel research analyst and managing director at Baird. “Investor sentiment remains negative, particularly toward the Hotel REITs, on continued relative weakness in New York City and broader concerns toward real estate stocks in the face of rising interest rates. Despite the significant pullback in share prices and valuations over the last several months, hotel real estate values continue to rise as capital flows to the sector remain strong; we see a disconnect between public and private market valuations.”
The Baird/STR Hotel Stock Index during May lagged the performance of the S&P 500 (+1.0 percent) and the MSCI REIT (RMZ) (-0.5 percent).
The Hotel Brand sub-index reported a 1.6-percent decrease to 5,003 during May. The Hotel REIT sub-index experienced a 0.8-percent decrease to 1,735 during the month.
Europe hotel pipeline for May 2015
There are 820 hotels totalling 133,251 rooms Under Contract in Europe, according to the May 2015 STR Global Construction Pipeline Report. This represents a 10.7-percent decrease in rooms Under Contract compared with May 2014 and a 7.9-percent year-over-year decrease in rooms under construction. The Under Contract data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Unconfirmed stage. The region reported 56,299 rooms in 351 hotels under construction for the month. Among the Chain Scale segments, the Upscale segment accounted for the largest portion of rooms in Under Contract (26.0 percent with 34,660 rooms). Two other segments each accounted for more than 15.0 percent of rooms in Under Contract: the Upper Midscale segment (22.7 percent with 30,279 rooms) and the Unaffiliated segment (15.3 percent with 20,337 rooms). The Upscale segment also made up the largest portion of rooms under construction (32.7 percent with 18,404 rooms) followed by the Upper Midscale segment (18.3 percent with 10,277 rooms) and the Upper Upscale segment (17.1 percent with 9,604 rooms).
Middle East/Africa hotel pipeline for May 2015
There are 653 hotels totalling 159,945 rooms Under Contract in the Middle East/Africa region. This represents a 16.1-percent increase in rooms Under Contract compared with May 2014 and a 40.4-percent year-over-year increase in rooms under construction. The Under Contract data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Unconfirmed stage. The region reported 91,510 rooms in 351 hotels under construction for the month. Among the countries in the region, Saudi Arabia reported the most rooms under construction with 28,050 rooms in 64 hotels. United Arab Emirates followed with 22,724 rooms in 90 hotels. Qatar (6,383 rooms in 26 hotels) was the only other country in the region to report more than 5,000 rooms In Construction.
US hotel pipeline for May 2015
There are 3,509 projects totaling 425,896 rooms Under Contract in the United States. This represents an 11.7-percent increase in the number of rooms Under Contract compared with May 2014 and a 23.8-percent year-over-year increase in rooms under construction. The Under Contract data includes projects in the In Construction, Final Planning and Planning stages but does not include projects in the Unconfirmed stage.
“Upscale and Upper Midscale chains continue to dominate overall construction activity in the U.S., but Upper Upscale construction increased by 56.1 percent (versus May 2014) to more than 13,000 rooms,” said Bobby Bowers, STR’s senior VP of operations.
Among the Top 25 Markets, New York, New York, reported the most rooms Under Contract with 29,451 rooms. Two additional markets reported more than 10,000 rooms Under Contract for the month: Houston, Texas (17,612 rooms) and Dallas, Texas (11,412 rooms). New York had the largest number of rooms under construction with 13,300 rooms, followed by Houston with 6,946 rooms. Four other markets reported more than 3,000 rooms under construction: Las Vegas, Nevada (3,929 rooms); Miami/Hialeah, Florida (3,557 rooms); Los Angeles/Long Beach, California (3,515 rooms); and Chicago, Illinois (3,370 rooms).
“New York is far and away the leader in rooms under construction with about 10 percent of the U.S. total,” Bowers said. “Together, New York, Houston and Las Vegas account for roughly one-fifth of the U.S. construction activity.”
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
