U.S. Hotel Stock Tracking Index Up in February

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According to STR, the Baird/STR Hotel Stock Index increased 0.7% in February 2017, closing the month at 3,750. Through the first two months of 2017, the index was up 1.3%.

"Hotel stocks underperformed the broader indices in February as industry trends remained sluggish and investors digested 2017 guidance updates that were generally a bit below expectations, especially from the hotel REITs," said Michael Bellisario, senior hotel research analyst and vice president at Baird. "Management teams remain hopeful that fundamentals will improve in the back half of the year, but green shoots have yet to emerge, and full-year guidance ranges reflect a continuation of moderate year-to-date growth trends, which caused stocks to be relative underperformers in February."

"Early-year industry performance seems to be falling in line with our expectation for slight occupancy declines and muted RevPAR growth," said Amanda Hite, STR's president and CEO. "Mixed signals from the new administration--tax relief on one hand, a travel ban on the other--is likely not helping investor sentiment, but thus far, there hasn't been a noticeable impact on data. We'll continue to monitor demand numbers, specifically in the coastal markets, to see if any trends emerge."

The Baird/STR Hotel Stock Index for February lagged behind the performance of the S&P 500 (+3.7%) and the MSCI REIT (RMZ) (+3.2%).

The Hotel Brand sub-index increased 1.7% to 5,111 from January to February, while the Hotel REIT sub-index fell 1.0% to 1,580 during the month.