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Hotel Stocks Tick Upward as Lodging Data Improves
The Baird/STR Hotel Stock Index rose 1.7% in May to a level of 3,232. Year to date through May 31, the stock index was down 38.7% amid the pandemic, but Baird’s Michael Bellisario said industry data “continues to be less bad on a sequential weekly basis.”
Hotel stocks were relatively flat in May, reflecting underperformance during the first two weeks, “but a sharp reversal in the back half of May as the broader re-opening trade gained momentum and stock prices recovered,” said Bellisario. “Investors’ worst-case zero-occupancy scenarios, which included significant monthly cash burn rate assumptions, have not materialized as initially feared.”
That said, STR president Amanda Hite noted, “A sustained global rebound for the industry will likely only be reached once corporate group travel returns, but with a vaccine rollout timeline far off, and online meeting tools quite successful, the timing of new group demand is questionable right now.”
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- ◦Economy
