Major U.S. Hotel Stock Index Dips 5.4 Percent in November

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STR is reporting this week that the Baird/STR Hotel Stock Index decreased 5.4% in November 2015 to close the month at 3,283.
 
"The outlook for lodging performance remains very positive with occupancy, room rate and revenue per available room all headed upward," said Randy Smith, STR's chairman and co-founder. "Granted the pace is slowing, but we should end 2015 with higher profitability and go into 2016 with more record-setting performance indicators. As usual, there are plenty of headwinds with concerns over global travel given recent terrorist activities, higher interest rates from the Fed and recent softness in gross private domestic investment--a key variable in industry performance."
 
Year to date through November, the Baird/STR Hotel Stock Index decreased 15.1%.
 
"Hotel stocks gave back some of their October gains as travel-related names were negatively impacted by overseas terrorist attacks and heightened geopolitical uncertainties," said David Loeb, senior hotel research analyst and managing director at Baird. "All eyes are on the Fed and its upcoming decision about whether to increase interest rates later this month. Investors continue to have mixed views about the growth trajectories of the domestic and global economies, which have been a headwind for hotel stocks in recent months. Domestic hotel fundamentals have rebounded off their August lows, and management teams remain optimistic about growth heading into next year."
 
The Baird/STR Hotel Stock Index for November lagged behind the performance of the S&P 500 (+0.1%) and the MSCI REIT (RMZ) (-1.0%).
 
The Hotel Brand sub-index reported a 6.8% decrease to 4,290 in November. The Hotel REIT sub-index experienced a 2.2% drop to 1,504 during the month.