HENDERSONVILLE, TENNESSEE, and MILWAUKEE — The Baird/STR Hotel Stock Index fell 5.3% in June to a level of 3,060. Year to date through the first six months of 2020, the stock index was down 41.9%.
“Hotel stocks were volatile in June as the broader reopening trade continued into the early part of the month; the Hotel Brand and Hotel REIT Sub-Indices were up more than 19% and nearly 37%, respectively, through six trading days,” said Michael Bellisario, senior hotel research analyst and director at Baird. “However, the momentum reversed course, and hotel stocks finished the month approximately 5% lower as rising coronavirus case counts in several states dampened investor sentiment and negatively impacted travel-related stocks.”
“Different metrics seem to point to opposite stories,” said Amanda Hite, STR’s president. “On one hand, RevPAR declines continue to ease, and occupancy continues to grow nationally and by scale. On the other hand, the continued acceleration in positive COVID cases could have implications for the U.S. hotel industry if it means that states slow or reverse their opening. This then would not only impact transient demand, but also, as importantly, group demand. If governors decide that congregations of 10 or more people should be discouraged, then the meetings industry’s recovery will be that farther off.”
June performance of the Baird/STR Hotel Stock Index fell behind the S&P 500 (+1.8%) and the MSCI US REIT Index (+2.5%).
The Hotel Brand sub-index dropped 5.4% from May to 5,332, while the Hotel REIT sub-index was down 4.9% to 746.