U.S. Hotel Stock Tracking Index Sharply Rebounds 11.8 Percent in February

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Hotel stocks in the U.S. have enjoyed a significant rebound this past Winter based on the Baird/STR Hotel Stock Index, which increased 11.8% in February 2016 to close the month at 3,039.

"With a rebound in lodging stocks in February, perhaps investor sentiment is falling more in line with industry expectations," said Randy Smith, STR's chairman and co-founder. "This year is going to see a slowdown in industry performance which would be expected since most of the key indicators are at record levels. But while supply growth will be a problem in a few key markets, overall industry performance should continue to modestly improve this year. There continues to be an abundance of risk to future demand, but at this point the outlook remains positive."

"Hotel stocks rebounded sharply in February and built upon the upward momentum that began in late January following The ALIS (Americas Lodging Investment Summit) Conference," said David Loeb, senior hotel research analyst and managing director at Baird. "Sentiment was extremely pessimistic, stocks were trading at significant discounts to their private market valuations, and fourth-quarter earnings reports and forward-looking outlooks from companies exceeded investors' low expectations. While growth has slowed a bit in recent months, we do not forecast a recession to occur this year that would lead to a broad-based slowdown in demand trends, which keeps us positive with a relatively bullish outlook for both the brands and REITs."

The Baird/STR Hotel Stock Index for February outperformed the S&P 500 (-0.4%) and the MSCI REIT (RMZ) (-0.7%). 

The Hotel Brand sub-index reported a 13.7% spike to 4,019 in February. The Hotel REIT sub-index experienced a 7.7% rise to 1,356 during the month.