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STEERED BY SEVERAL factors, including the strong performance by several hotel brands, the Baird/STR Hotel Stock Index increased 1.4 percent in April to a level of 5,430, STR said in a statement. Growth is slowing, STR said, but will continue for the next quarter or more. "Hotel stocks increased in April, and the gains were driven by outperformance from the global hotel brands," said Michael Bellisario, senior hotel research analyst and director at Baird. "RevPAR trends have remained solid in the face of growing macroeconomic uncertainties and continued banking turmoil, and first-quarter earnings generally have surprised to the upside with positive full-year estimate revisions occurring. The Hotel REITs declined more than 2 percent in April and underperformed the RMZ, while the global hotel brands gained just over 2.5 percent and outperformed the S&P 500's return by 100 bps." According to STR, the Baird/STR Hotel Stock Index fell slightly behind the S&P 500, which was up 1.5 percent in April but came in above the MSCI US REIT Index, up 0.7 percent. The hotel brand sub-index jumped 2.5 percent from March to 10,178, while the hotel REIT sub-index dropped 2.6 percent to 1,045, it added. "The industry continues to revert to normal patterns and calendar shifts with growth slowing as forecasted," said Amanda Hite, STR president. "Monthly demand fell year over year for the first time since the recovery began in April 2021, but that decrease can be attributed to an extra Sunday on the calendar this year versus last. Without the extra Sunday, which is historically a low-performance night, demand would have been slightly up from last year. ADR, on the other hand, grew 3.4 percent, while RevPAR was up 1.8 percent - the lowest increase of the recovery thus far. Despite slowing growth, we expect the industry to see further gains throughout the summer and fall."

THE BAIRD/STR Hotel Stock Index was down 2.5 percent in February 2023 as the focus turned to earnings and initial 2023 outlooks, according to STR. Investors' confidence also was boosted some by strong fourth quarter results and rising demand. During the month, the Baird/STR Index surpassed both the S&P 500, down 2.6 percent and the MSCI US REIT Index, fell 4.9 percent, STR said in a report. Meanwhile, the index jumped 16.4 percent in January. According to the STR, the Hotel Brand sub-index decreased 1.2 percent from January to 10,219, while the Hotel REIT sub-index dropped 7 percent to 1,130. "Hotel stocks, just like the broader market, pulled back in February as the focus turned to earnings and initial 2023 outlooks," said Michael Bellisario, senior hotel research analyst and director at Baird. "The global hotel brand stocks, while down slightly during the month, outperformed the S&P 500 on the heels on strong fourth quarter earnings reports and guidance that matched expectations; hotel REITs were weaker and relatively underperformed as investors focused on somewhat mixed fourth quarter earnings reports and 2023 guidance that embedded heightened expense pressures and outsized renovation disruption."

THE BAIRD/STR HOTEL Stock Index jumped 16.4 percent in the first month of 2023, according to STR. A drop in recession fears and other factors gave investor confidence a boost, the research firms said. In January, the Baird/STR Index surpassed both the S&P 500, up 6.2 percent and the MSCI US REIT Index, increased 10.5 percent, STR said in a report. The index dropped 10 percent in December, and it was down 15 percent for 2022. According to STR, the Hotel Brand sub-index increased 16.2 percent from December to 10,342, while the Hotel REIT sub-index rose 17.1 percent to 1,216. "Hotel stocks rebounded sharply in January and were significant outperformers as the back-and-forth recessionary concerns once again subsided to start the year," said Michael Bellisario, senior hotel research analyst and director at Baird. "Industry-wide RevPAR trends finished the year on a strong note despite tougher calendar comparisons and weather-related travel disruptions in December. Several Hotel REITs provided fourth-quarter operational updates, and performance generally was in line with prior expectations. More broadly, investor sentiment has improved, which boosted stock prices across the board in January, but the macroeconomic indicators have remained mixed."

STR IS LAUNCHING a new phase, STR Benchmarking, a market share product for the global hotel industry, according to STR's parent company, real estate marketplaces, information and analytics provider CoStar Group. The new software platform will offer property-level data and analytics for hotel owners and operators with functionality built on the STAR Report. Acquired by CoStar in 2019, STR draws its benchmarking data from a sample of 77,000 participating properties with 10 million rooms around the world. STR Benchmarking provides new functions, including user and competitive set self-management as well as high-frequency updates to data. Future product enhancements, which are expected to begin rolling out later this year, include portfolio-level benchmarking, monthly P&L, average-length-of-stay data, and forward-looking occupancy.

THE BAIRD/STR Hotel Stock Index jumped 15.8 percent in October, according to STR. There were no signs of slowing as U.S. demand continued to strengthen during the month. The index decreased 8 percent year-to-date through the first ten months of 2022. The index fell 9.1 percent in September. In October, the index outgrew both the S&P 500, up 8 percent and the MSCI US REIT Index, increased 4.7 percent. The hotel brand sub-index increased 14.4 percent from September to 9,458, while the hotel REIT sub-index grew 20.6 percent to 1,193. "October was a strong rebound month for hotel stocks, and they recouped all their losses from the prior two months," said Michael Bellisario, senior hotel research analyst and director at Baird. "Importantly, both the global hotel brands and the hotel REITs were relative outperformers versus their respective benchmarks in October. As investors shifted their focus from broader macroeconomic uncertainties to sector-specific performance ahead of and through third-quarter earnings reports, hotels continued to screen favorably given still-strong underlying fundamentals and an intact post-pandemic recovery thesis."

THE BAIRD/STR Hotel Stock Index rose in March, continuing a trend from the previous month. Still, continued growth remains at risk by factors such as inflation and political unrest. The index increased 2.2 percent in March after rising 4.1 percent in February. It rose 2.4 percent year to date through the first three months of 2022. However, Baird/STR fell behind both the S&P 500, up 3.6 percent in March, and the MSCI US REIT Index, which rose 5.9 percent. The hotel brand sub-index rose 1.4 percent from February, while the Hotel REIT sub-index jumped 5.1 percent. "Hotel stocks increased in March but underperformed their benchmarks as stock market volatility eased and geopolitical concerns did not worsen," said Michael Bellisario, senior hotel research analyst and director at Baird. "Underlying hotel fundamentals continued to improve in March, and the outlook appears more favorable today than just one month ago despite all of the background noise in the stock market and with interest rates on the rise. Higher gas prices and heightened concerns about a slower growth backdrop have been topical with investors lately, but broader travel momentum and pent-up demand should keep the lodging recovery going over the near term, in our opinion."

THE HOTEL PROPERTY types most associated with business travel, upper upscale hotels, are well represented in the U.S. hotel construction pipeline. The volume of projects in the segment points to confidence in the future of business travel, according to STR. "Upper upscale saw the slowest recovery, but a steady climb in performance and the business travel indicators have supported developer confidence in the segment," said Isaac Collazo, STR's vice president for analytics. "The more than 23,000 upper upscale rooms in construction right now represent 3.4 percent of the segment's existing supply. That is well above the long-term growth average, up 2 percent in the U.S." According to STR, a total 154,284 rooms were under construction in March, down 0.5 percent compared to the same period last year. As many as 239,995 rooms are in the final planning state, an increase of 34.6 percent over last year. STR pipeline data showed that 232,517 rooms are under planning, a decline of 21.6 percent compared to March 2022. After three consecutive month-over-month increases, the overall number of U.S. rooms in construction fell slightly in March, which aligns with patterns in previous years. Among the chain scale segments, luxury shows the highest number of rooms as a percentage of existing supply. Luxury segment reports the highest increase in hotel construction in March, up 5.2 percent containing 7,136 rooms, followed by upscale, up 4.1 percent with 36,089 rooms and upper midscale, increased 3.7 percent containing 43,470 rooms.

THE BAIRD/STR Hotel Stock Index rose 12.7 percent in December over the previous month. It was up 25.6 percent for 2021 as a whole. The index outperformed both the S&P 500, up 4.4 percent, and the MSCI US REIT Index, which rose 8.2 percent in December. The hotel brand sub-index increased 13.2 percent from November while the Hotel REIT sub-index rose 10.9 percent. Investment was bolstered by some, if not good, then less bad than expected news regarding the COVID-19 pandemic, said Michael Bellisario, senior hotel research analyst and director at Baird. "Hotel stocks ended a volatile year with strong gains in December as the worst-case scenarios related to the Omicron variant appeared unlikely to unfold as initially feared," Bellisario said. "With the big rebound into year-end, the hotel brands ended up slightly outperforming the S&P 500 in 2021, while the hotel REITs - despite gaining 12 percent on the year - significantly lagged the RMZ's best-ever annual performance. Turning the calendar to 2022, leisure travel strength is expected to persist, but the wildcard for the overall industry's continued recovery remains a more substantialreturn of the business traveler."

ALL RECOVERY INDICES of U.S. extended-stay hotels were lower compared to 2019 in May than in April, according to hotel investment advisors The Highland Group. The demand for economy extended-stay hotels declined 1.3 percent for the second consecutive month in May compared to same period last year mainly due to sharp increase in ADR in last few months, the report said. The U.S. Extended-Stay Hotels Bulletin: May 2022 by The Highland Group said that the extended-stay room supply growth was just 1.9 percent during the month. It is the second successive month that the growth was below 2 percent since 2013, and the eighth consecutive month of 4 percent or lower supply growth. The report added that the supply increase will be well below pre-pandemic levels during the near term. According to STR, all hotel room revenue was up 43 percent in May 2022 compared to last year. "In May, mid-price and upscale extended-stay segments reported their lowest monthly change in demand in 2022. Except for February 2021, due to the leap year in 2020, economy extended-stay hotels reported only the second monthly fall in demand in 23 consecutive months," the report said. "Overall hotel occupancy gained more than extended-stay hotels in May compared to one year ago, decreasing extended-stay hotel's occupancy premium to 12 percentage points, and remains within its long-term average range."

THE BAIRD/STR HOTEL Stock Index rose again in April, continuing a trend the index has followed for the past four months. Investors' optimism is driven by the travel industry's ongoing recovery due to pent-up demand that is overriding negative influences, such as the Russia/Ukraine war and rising interest rates. Baird/STR went up 0.7 percent during the month, according to STR. The index rose 3.1 percent over the first four months of 2022. In March it increased 2.2 percent in March after rising 4.1 percent in February. The index also surpassed both the S&P 500, which dropped 8.8 percent in April, and the MSCI US REIT Index, which went down 4.6 percent. The hotel brand sub-index rose 0.5 percent from March, while the hotel REIT sub-index jumped up 1.5 percent.

U.S. HOTEL PERFORMANCE moved closer to pre-pandemic levels during the third week of November according to STR. It dipped, however, from the week before. Occupancy was 59.7 percent for the week ending Nov. 20, down from 61.6 percent for the week before and a slight decrease of 2.1 percent from the same period two years ago. ADR for the third week of the month was $126.66, down from $129.98 the week before and increased 1.7 percent when compared to two years ago. RevPAR decreased to $75.60 for the third week of the month from $80.02 the week before, and a slight drop of 0.4 percent for the same period in 2019. Among STR's top 25 markets, Phoenix saw the largest occupancy increase during the week under review, up 6.4 percent to 76.6 percent over 2019. Miami reported the largest ADR increase when compared to 2019, 25.5 percent to $207.72. Oahu Island, Hawaii, experienced the steepest occupancy decline from 2019, down 35.2 percent to 51.8 percent.

THE COLLECTIVE RECOVERY indices of U.S. extended-stay hotels exceeded 100 percent in November for the first time in 2021, according to hotel investment advisors Highland Group. The strongest gains were reported by mid-price and upscale extended-stay hotels. Economy extended-stay hotels continue to lead the RevPAR recovery during the month with a 22 percent gain compared to two years ago, according to "U.S. Extended-stay Hotels Bulletin: November 2021" report from the Highland Group. According to the report, the 4 percent increase in extended-stay room supply in November tied with October as the lowest monthly gain in 2021. "The impact to supply growth from reopening hotels closed during the pandemic is effectively over. Early indications are that mid-price and upscale supply growth should be well below pre-pandemic levels during the near term," the report said. "The overall hotel industry lost far more revenue than extended-stay hotels in 2020, so it is now recovering revenue more quickly." STR reported that all hotel room revenue was up 110 percent in November compared to a year ago.

U.S. HOTEL CONSTRUCTION declined for the seventh consecutive month in June, according to STR. Rooms in construction in New York City and Nashville represent a significant percentage of existing supply in those markets. Though at a slower pace, planning activity increases across the U.S. and developers are showing interest in Miami, Nashville and Phoenix, the report said. According to STR, there are 146,198 rooms under construction in the U.S. in June, down 20.1 percent when compared to same period last year. As many as 178,809 rooms are at final planning during the month, decreased 11.3 percent from last year and 281,190 rooms are at planning phase, an increase of 6.1 percent from June 2021. "The U.S. hotel pipeline continues to decelerate as we enter the second half of the year," said Carter Wilson, senior vice president of consulting, STR. "The continued increases in debt costs combined with the ongoing supply chain disruptions will likely delay projects from breaking ground this year, which will lead to a further decline in rooms in construction. On a national basis, new supply will not be a significant headwind for the future." New York leads the major markets in rooms in construction at 13,568 rooms in June, up 10.8 percent compared to last year, followed by Nashville with 3,939 rooms, up 7 percent, Phoenix with 4,388 rooms, an increase of 6.3 percent over last year, Atlanta with 5,991 rooms, up 5.5 percent and Detroit with 2,382 rooms, an increase of 5.1 percent over June 2021.

THE U.S. HOTEL industry will continue its recovery in 2022, but the path will be uneven and potentially volatile, according to a report by the American Hotel & Lodging Association. It added that a full recovery from the impacts of the COVID-19 pandemic will take several years. AHLA's 2022 State of the Hotel Industry report also revealed shifts in consumer and business sentiment. The report was created in collaboration with Accenture and is based on data and forecasts from Oxford Economics and STR. According to the report, hotel occupancy rates and room revenue will approach 2019 levels this year, but the outlook for ancillary revenue, which includes F&B and meeting space, is less optimistic. Leisure travelers will continue to drive recovery, the report added. Hotels lost a collective $111.8 billion in room revenue alone during 2020 and 2021. Business travelers made up 52.5 percent of industry room revenue in 2019 and it will be 43.6 percent in 2022. Business travel will be down more than 20 percent for much of the year, the report said. As the full effects of Omicron is not yet known, just 58 percent of meetings and events are expected to return. AHLA report said that the rapid rise of bleisure travelers-those who blend business and leisure travel-are impacting hotel operations now. A recent study revealed that 89 percent of business travelers wanted to add a private holiday to their business trips in the next twelve months.

THE DEMAND PREMIUM that extended-stay hotels have experienced over the past two years compared to other types of hotels is beginning to ebb, according to consulting firm The Highland Group. Also, ADR growth decelerated for the fourth consecutive month in July but remains higher than any other period before 2021. The overall hotel industry revenue recovery is now only one half a point greater than extended-stay hotels, according to the US Extended-Stay Hotels Bulletin: July 2022 report by the Highland Group. According to STR, all hotel room revenue was up 12.1 percent in July this year compared to last year. "For the first time in more than two years all three extended-stay segments reported a monthly decline in demand compared to the previous year. Demand declines in economy and mid-price segments, which were less than corresponding falls for all hotels in the same rate categories, are mainly correlated to strong growth in ADR. The upscale segment's demand decline is correlated to both increasing ADR and the contraction in supply," the report said.

THE HOTEL INDUSTRY is poised for a fairly strong year in 2023 despite remaining concerns about a downturn, according to a pair of reports. Continuing demand is expected to overcome extra labor costs and economic vagaries to propel performance above pre-pandemic levels, according to the reports from the American Hotel & Lodging Association and STR. The state of the industry AHLA's 2023 State of the Hotel Industry Report projects that demand, nominal room revenue and state and local tax revenue all are well on the way to recovery. Operational challenges, such as staffing shortages and economic factors will replace COVID as hoteliers' top concerns, the report predicts. "Three years after the unprecedented hardships our industry faced due to the pandemic, hotels continue to make significant strides toward recovery," said Chip Rogers, AHLA president and CEO. "2022 saw one of the strongest summer travel seasons ever, and this year we expect hotels to reach new heights in terms of room revenue, room-night demand and state and local tax revenue. But when inflation is taken into account, our industry likely won't see full recovery for several more years. Nevertheless, hotel performance is trending in the right direction - great news for our industry and our employees, who are enjoying better pay, more career opportunities, upward mobility and flexibility than ever before."

REVPAR FOR U.S. hotels recovered to 83.2 percent of 2019 levels in 2021, according to STR. Also, in December 2021, ADR and RevPAR hit all-time highs. U.S. hotel occupancy in 2021 was 57.6 percent, down 12.6 percent when compared to 2019. ADR for the year was $124.67, down just 4.8 percent from 2019. RevPAR at $71.87, down 16.8 percent when compared to two years ago. "In addition to 2020, U.S. hotel occupancy failed to reach 60 percent for just the second time since 2011," STR said. "On a nominal basis, 2021 ADR was the fourth highest on record. The country's RevPAR level was its second lowest in eight years behind only 2020." According to the report, none of the top 25 markets experienced an occupancy increase last year over 2019. Tampa reported the highest occupancy at 68.4 percent, down 5.2 percent from 2019. The largest ADR increase in 2021 was in Miami, up 14.7 percent to $223.49, compared to 2019. Norfolk/Virginia Beach registered the highest growth in RevPAR, up 7.7 percent to $72.31.

THE OMICRON VARIANT of COVID-19 has come and, for now, gone, and U.S. hotels are recovering quickly according to STR. The recovery does come after a slight dip in GOPPAR. That dip was a $20 decline in January, but GOPPAR rose to $58.88 in February, the highest since October, according to STR's P&L report for the month. TRevPAR for the month was $169.77, EBITDA PAR was $39.29 and labor costs were $56.63. All also were increases over January. In 2021, U.S. hotel profits reached 52 percent of pre-pandemic levels, according to STR. "Following trends in top-line performance, U.S. profitability levels are recovering more quickly from Omicron than with previous variants," said Raquel Ortiz, STR's director of financial performance. "February GOPPAR was roughly 77 percent of the 2019 comparable, but independents (108 percent), luxury (94 percent) and midscale (88 percent) chains were far above the national average. The upper upscale (67 percent) and upscale (70 percent) segments are where the largest deficits persisted.

THE REVPAR OF U.S. hotels reached an all-time weekly high on a nominal and a pandemic-era high on an inflation-adjusted basis in the third week of June, according to STR. Boosted by the highest weekly demand of 28 million room nights sold since August 2019, occupancy was the highest of the pandemic-era during the week. Occupancy was 71.8 percent for the week ending June 18, up from 70.6 percent the week before and dropped 4.8 percent from 2019. ADR was $155.02 for the week, slightly down from $155.37 the week before and increased 14.9 percent from three years ago. RevPAR reached $111.29 during the week up from $109.76 the week before and up 9.4 percent from 2019. San Diego saw the only occupancy increase, up 0.5 percent to 86 percent, over 2019 among STR's top 25 markets. According to STR, New York City (86.6 percent), San Diego and Seattle (85 percent) led the major markets in absolute occupancy for the week.

THE REVPAR OF hotels in Phoenix is forecasted to reach $419 for Super Bowl weekend of February 10-12, the second-highest level for the event, according to STR. As the city also hosts Phoenix Open this week, the Friday through Sunday night occupancy may touch 94 percent and ADR to hit $445. According to STR, a unique volume of demand would push occupancy slightly higher than Phoenix's last host year in 2015 (93.7 percent) even though supply increased by 11.7 percent this year. The ADR level would rank third among host markets behind Miami in 2020 and San Francisco in 2016. "Phoenix's jump in RevPAR during its last Super Bowl host year was staggering, and this time around will be no different with big-time growth contribution from both occupancy and ADR," said Isaac Collazo, STR's vice president of analytics. "Demand speaks for itself, especially with consumer behavior around the event free of pandemic concerns-unlike the last two Super Bowls. Phoenix's ADR situation has different influences than recent host markets given inflation and having less upper-tier supply than a Los Angeles or Miami." The overall Phoenix market comprises 544 hotels with 70,488 rooms.