The Baird/STR Hotel Stock Index fell 11.7% in February to a level of 4,296. Year to date through the first two months of 2020, the stock index dropped 18.5%.
“Hotel stocks fell off a cliff at the end of the month due to mounting COVID-19 concerns domestically, and the broader stock market correction has disproportionately impacted travel-related stocks,” said Michael Bellisario, senior hotel research analyst and director at Baird. “Increased cancellations and stricter corporate travel policies will impact near-term profitability for both hotel owners and hotel brands; however, the disruption for owners, particularly ones with more urban gateway and group exposure, will be far greater than the impact on the global hotel brands companies.”
“It was not surprising to see such a steep drop in the stock index given the heightened concern around the coronavirus outbreak and the overall sentiment in the market,” said Amanda Hite, STR’s president. “Prior to the wider spread outbreak, we forecasted flat RevPAR performance for the year. Performance has held to this point, but we expect a negative trend to surface at some point in this quarter’s data, especially in gateway cities.”
February performance of the Baird/STR Hotel Stock Index fell behind both the S&P 500 (-8.4%) and the MSCI US REIT Index (-8.1%).
The Hotel Brand sub-index decreased 10.6% from January to 7,195 while the Hotel REIT sub-index declined 14.3% to 1,169.