Baird/STR Hotel Stock Index Upticks in May

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May 2011's Baird/STR Hotel Stock Index ended with a 1.2-percent increase to 2,380. The index is down 0.7 percent year-to-date 2011. The Hotel Stock Index ended 2010 at 2,364.

Robert W. Baird & Co. (Baird) and STR partnered to create the Baird/STR Hotel Stock Index--the first widely available U.S. hotel stock index in the hotel industry. The index combines Baird's financial markets expertise and the data processing of STR.

The Baird/STR Hotel Stock Index outperformed the S&P 500 and the RMZ for the first time this year. The S&P ended May with a 1.4-percent decrease and the RMZ ended the month with a 1.0-percent increase. The month's outperformance was aided by a 7.1-percent increase in shares of Marriott International, the index's largest component.

"There's a lot of uncertainty surrounding the economy, so it is a good sign that the Baird/STR Hotel Stock Index stayed positive in May," said Randy Smith, chairman and cofounder of STR. "The U.S. hotel industry is on a steady road to recovery and we expect a busy summer travel season to aid the recovery. We believe solid gains in the industry's performance will further bolster investor interest in the lodging sector."

"Investors have become wary of a second half 2011 slowdown, but declining interest rates have generally aided real estate stocks' performance," said David Loeb, senior hotel research analyst and managing director at Baird. "Specifically, hotel fundamentals remain strong and the outlook for continued growth is positive, despite several macroeconomic headwinds. We expect continued demand growth and minimal new supply to lead to occupancy gains; pricing gains should accelerate as the year progresses which should fuel hotel share price gains."

 

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