U.S. Hotel Industry Stock Index Upticks in August

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STR is reporting this week that their Baird/STR Hotel Stock Index increased 0.9% in August to close the month at 3,349. Year to date, the index is up 8.2%.

"The U.S. hotel industry continues through a slowdown as supply and demand grow at the same pace," said Amanda Hite, STR's president and CEO. "RevPAR (revenue per available room) growth is now completely driven by ADR (average daily rate), and because of the lower performance through the first seven months of the year, STR has adjusted its RevPAR forecast to +3.2% in 2016 and +2.8% in 2017. It will be interesting to see if second-half performance falls in line with these muted expectations."

"Hotel stocks continued their relative outperformance in August, but absolute performance was mixed with the REITs down slightly and the brands up modestly," said David Loeb, senior hotel research analyst and managing director at Baird. "Market volatility remained at historically low levels throughout August, which likely boosted riskier stocks like hotels. The leisure-heavy period at the end of the month was quite strong, which is encouraging after weekly hotel RevPAR results were below expectations for the first few weeks of the month."

The Baird/STR Hotel Stock Index for August outperformed the S&P 500 (-0.1%) and the MSCI REIT (RMZ) (-4.0%).

The Hotel Brand sub-index reported a 1.5% increase to 4,366 in August. The Hotel REIT sub-index was down 0.5% to 1,540 during the month.