Baird/STR Hotel Stock Index Down 15.3% in 2011

The Baird/STR Hotel Stock Index outperformed the S&P 500, which was up 0.9 percent in December. The MSCI REIT (RMZ) was up 4.1 percent for the month. The S&P 500 ended 2011 flat and the RMZ was up 4.7 percent for the year.

“While there continues to be considerable turmoil in the financial markets, the lodging stocks included in the RWB/STR Hotel Stock Index rebounded 2.7 percent for the month of December,” said Randy Smith, co-founder and chairman at STR. “With industry fundamentals remaining fairly strong through the end of the year including a healthy increase in room demand, very low growth in overall room supply and modest improvements in room rates, 2011 ended on a positive note. As a result, continued strong growth in 2012 will be difficult because of a variety of factors and this concern was reflected in the 15.3-percent decline in the index for full year 2011. Assuming there will be a limited number of disasters this year—either natural or man-made—the outlook for the industry continues to be positive with a modest increase in revenue per available room forecast for the year.”

“Hotel stocks performed quite poorly in 2011 despite strong underlying fundamentals. The Index underperformed nearly every month until early fall when investors finally stepped in as valuations became extremely attractive,” said David Loeb, senior hotel research analyst and managing director at Baird. “The Index has gained momentum in the last few months, outperforming the broader market and other real-estate sectors, and we expect this trend to continue in 2012 as investors, who are still relatively under-weight hotels, reallocate their portfolios.”

As of 1 January 2012, the composition of the Index is changing, with the addition of RLJ Lodging Trust (RLJ) and the removal of Orient-Express Hotels (OEH). RLJ’s implied market capitalization is approximately $1.8 billion while OEH’s is about $770 million.

About the Baird/STR Hotel Stock Index

The Baird/STR Hotel Stock Index was set to equal 1000 on 1 January 2000, as its starting point. The Index reached its peak of 3178 on 5 July 2007. The Index’s lowest point occurred on 6 March 2009, when it dropped to 573.

The Index is available exclusively on www.hotelstockindex.com and www.HotelNewsNow.com. The Baird/STR Hotel Stock Index is a co-branded index created by Robert W. Baird & Co. (Baird) and Smith Travel Research, Inc. (STR). The market-cap weighted Index is comprised of 15 of the largest market capitalization hotel companies publicly traded on a U.S. exchange and attempts to characterize the performance of hotel stocks. The Index is maintained by Baird and is hosted on HotelNewsNow.com. The Index is not actively managed and a direct investment cannot be made in it.

The current companies that comprise the Baird/STR Hotel Stock Index: Ashford Hospitality Trust, Choice Hotels International, DiamondRock Hospitality, FelCor Lodging Trust, Hersha Hospitality Trust, Hospitality Properties Trust, Host Hotels & Resorts, Hyatt Hotels, InterContinental Hotels Group, LaSalle Hotel Properties, Marriott International, Orient-Express Hotels, Starwood Hotels & Resorts Worldwide, Sunstone Hotel Investors and Wyndham Worldwide.

About Baird

Baird is an employee-owned, international wealth management, capital markets, private equity and asset management firm with offices in the United States, Europe and Asia. Established in 1919, Baird has more than 2,500 associates serving the needs of individual, corporate, institutional and municipal clients. Baird oversees and manages client assets of nearly $75 billion. Committed to being a great place to work, Baird ranked number 11 on FORTUNE’s “100 Best Companies to Work For” in 2010 – its seventh consecutive year on the list. Baird’s principal operating subsidiaries are Robert W. Baird & Co. in the United States and Robert W. Baird Group Ltd. in Europe. Baird also has an operating subsidiary in Asia supporting Baird’s private equity operations. For more information, please visit Baird’s Web site at www.rwbaird.com.

About STR

STR provides clients—including hotel operators, developers, financiers, analysts and suppliers to the hotel industry—access to hotel research with regular and custom reports covering North America, Mexico and Caribbean. STR provides a single source of global hotel data covering daily and monthly performance data, forecasts, annual profitability, pipeline and census information. STR founded the STR family of companies and is proudly associated with STR Global, RRC Associates, STR Analytics, and HotelNewsNow.com. For more information, please visit www.str.com.


Logos, product and company names mentioned are the property of their respective owners.

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