U.S. Hotel Stock Tracking Index up 2.9 Percent in November

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The Baird-STR Hotel Stock Index increased 2.9 percent to 3,839 in November and is up 20.8 percent year to date. The index ended 2013 at 3,177. The Baird-STR Hotel Stock Index outperformed the S&P 500 (+2.5 percent) and the MSCI REIT (RMZ) (+1.7 percent) in November.
 
"The Hotel Stock Index saw another positive month in November," said Randy Smith, STR's co-founder and chairman. "Hotel performance broke records in October. Demand for the industry set another record, increasing 6.3 percent for the month. The industry hasn't seen demand growth this strong since December 2010. We expect to see hotels finish 2014 strong as occupancy is forecasted to end at the highest level we've seen since 1996. The forecasted actual ADR and RevPAR is expected to be at the highest rates we've seen since STR started tracking data in 1987. It is great to see the industry ending the year on such a high note."
 
"Hotel stocks outperformed both the broader market and other real estate sectors as momentum from October carried over to November," said David Loeb, senior hotel research analyst and managing director at Baird. "Hotel brands performed better than hotel REITs as heightened global macroeconomic fears receded and oil prices plunged; strong economic growth, especially domestically, and declining interest rates should continue to benefit the hotel REITs as investors shift their focus to 2015 and beyond."
 
On 1 October 2014, the Baird-STR Hotel Stock Index expanded to 20 stocks, up from 15 previously. In addition to expanding the index, two price-only sub-indices have been created to separately track the performance of Hotel Brands and Hotel REITs. Similar to the index, both the Hotel Brand and Hotel REIT sub-indices were set to equal 1,000 on 1 January 2000 as their starting points.
 
The Hotel Brand sub-index reported a 3.4-percent increase to 4,828 in November and is up 19.5 percent year to date. The sub-index ended 2013 at 4,042.
 
The Hotel REIT sub-index reported a 1.9-percent increase to 1,906 in November and is up 23.0 percent year to date. The sub-index ended 2013 at 1,549.