The Baird/STR Hotel Stock Index ended March with a 4.9-percent decrease to 2,294. During the first quarter of 2011 the index was down 3.0 percent. 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, the data processing of STR and the industry’s leading news website, HotelNewsNow.com.
“After starting the year in a positive direction, the Baird/STR Hotel Stock Index declined in March, wiping out all of the gains of the first two months,” said Randy Smith, chairman and cofounder of STR. “In contrast to the S&P500, which rose 5.4 percent during the first quarter of 2011, the Hotel Stock Index declined by 3.0 percent for the quarter following a 4.9-percent decline in March. While the intermediate and long-term outlook for the industry continues to look positive, there is mounting concern about the next several months as fuel prices continue to rise rapidly. Guidance from several of the major brands has been less than enthusiastic, causing a slight pullback in virtually all of the major public company share prices. However, there does appear to be a slow but steady improvement in industry fundamentals overall. Going forward, investors will need to continue to focus not only on fuel prices and how that will affect summer travel but also on room rates and how quickly pricing begins to rebound.”
“The Baird/STR Hotel Stock Index underperformed the S&P 500 and the RMZ for the third consecutive month as volatile oil prices and a potential for decreased demand from Japanese travelers weighed on stocks,” said David Loeb, senior analyst at Baird. “The Baird/STR Hotel Stock Index fell 4.9 percent versus a broader market decline of only 0.1 percent. The RMZ also outperformed hotels with a modest 1.8-percent loss. Marriott International lowered 1Q11 guidance for its North American properties, which caused all hotel stocks to sell off sharply. Expectations for first-quarter results are fairly low given poor weather in January and February, high oil prices and decreased outbound travel from Japan.”