U.S. Hotel Stock Index Dips 1.1 Percent in July

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Today the Baird/STR Hotel Stock Index reported a 1.1 percent decrease to 3,501 in July, yet it is still up 10.2 percent year to date. The index ended 2013 at 3,177.

The Baird/STR Hotel Stock Index outperformed the S&P 500 (-1.5 percent) but underperformed the MSCI REIT (RMZ) (-0.1 percent) in July 2014.

"Though hotel stocks saw a decrease, industry performance continued to stay positive," said Randy Smith, chairman and co-founder of STR. "As the second quarter came to a close, hotels continued to report increases; notably, revenue per available room rose by 8.2 percent in the quarter. As the summer comes to a close, travel will start to slow, but we still expect to continue to see positive performance."

"Hotel stocks continued their outperformance through most of July, but all of their absolute gains were lost at the end of the month with six consecutive down days amid rising geopolitical tensions," said David Loeb, senior hotel research analyst and managing director at Baird. "Investors had extremely high expectations heading into second quarter earnings season, and to date, results have not met these lofty expectations. The lodging recovery remains on track, but elevated valuations are likely to move lower in the near term."