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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."

HOTEL STOCK PRICE volatility dragged the Baird/STR Hotel Stock Index in November. Both the hotel brands and hotel REITs significantly underperformed their respective benchmarks during the month. The Baird/STR index fell 7.6 percent during the month from October. However, it was up 11.5 percent year to date through the first 11 months of 2021. The index rose 6.8 percent during October compared to September. The index was behind both the S&P 500, which fell 0.8 percent in November, and the MSCI US REIT Index, which dropped 0.9 percent. The hotel brand sub-index dropped 7.2 percent from October while the hotel REIT sub-index slipped 8.9 percent. "Hotel stock price volatility continued in November with both the Hotel brands and Hotel REITs significantly underperforming their respective benchmarks," said Michael Bellisario, senior hotel research analyst and director at Baird. "Two different investment narratives drove stock price performance during the month: In early November, third quarter earnings were better than expected, reopening optimism continued to gain momentum, and the hotel brands were hitting new all-time highs; but, by the end of the month, broader growth and inflation concerns surfaced, the Omicron variant spooked investors and impacted all travel-related stocks, and the hotel REITs were hitting new year-to-date lows."

MOST RECOVERY INDICES of U.S. extended-stay hotels declined slightly in October compared to the month before, according to hotel investment advisors Highland Group. Economy extended-stay hotels continue to lead the RevPAR recovery during the month with a 20 percent gain over the same period two years ago. The mid-price segment has more than recovered RevPAR every month since July and upscale extended-stay hotels continue to lag mainly due to the relatively high concentration of rooms in urban locations, according to "U.S. Extended-stay Hotels Bulletin: October 2021" report from to The Highland Group. According to the report, the 4 percent increase in extended-stay room supply in October was the lowest monthly gain in 2021. Mid-price and upscale supply growth should be well below pre-pandemic levels in the near future as the impact to supply growth from reopening hotels closed during the pandemic is almost over, the report added. The recent Highland Group report said that U.S. extended-stay hotels saw all-time highs in third quarter.

THE BAIRD/STR HOTEL Stock Index dropped 2.4 percent to 5,600, influenced by increasing interest rates affecting both real estate stocks and investor sentiment, according to STR. Moreover, U.S. hotel demand saw a 1.3 percent decrease in October, linked in part to a calendar shift. This marks the third consecutive month of stock decline after a surge in July. "Hotel stocks declined for the third straight month in October, aligning with broader market trends," said Michael Bellisario, senior hotel research analyst and director at Baird. "Elevated interest rates continued to drive performance, with real estate stocks bearing the brunt. Hotel REITs stood out as relative outperformers. The global hotel brands experienced a roughly 2 percent decrease, closely mirroring the S&P 500's retreat in October." In October, the Baird/STR Index fell behind the S&P 500, down 2.2 percent, but surpassed the MSCI US REIT Index, down 4.5 percent.

U.S. HOTELS REPORTED higher performance in October compared to September, according to STR. However, performance during the month weakened when compared to 2019. Occupancy of U.S. hotels were 67.2 percent for October, increased from 66.7 percent from the month before and decreased 2.4 percent from 2019. ADR was $155.63 for the month, up from $154.32 in September and up 16.8 percent from three years ago. RevPAR was $104.59 for the month, improved from $103 the month before and up 14 percent over 2019. STR's top 25 markets showed higher occupancy and ADR than all other markets in October mainly due to continued improvement in business travel and groups.

PROFITS ROSE IN October for U.S. hotels on a month-to-month basis, according to STR. However, the numbers are still down versus 2019, indicating a bump in the road to recovery. GOPPAR for the month was $62.75, according to STR's monthly P&L data release, up from $46.29 in September. TRevPAR for the month was $165.03, compared to $140.94 the month before, and EBITDA PAR was $44.14, up from $30.47 in September. At the same time, labor costs also rose from $47.50 the previous month to $52.17 inOctober. Estimated industrywide gross operating profit was 89 percent of October 2019 levels, after coming in at 97 percent in September. Labor costs reached 91 percent of pre-pandemic comparables in October after reaching a high of 96 percent in September. "October data was important to analyze from multiple angles," said Raquel Ortiz, STR's assistant director of financial performance. "The metrics were up quite a bit from September if you measure by available rooms, but that's to be expected as October is usually a stronger revenue month due to conferences and group travel. When you extrapolate and bring in the comparison to pre-pandemic times, performance was lower. Fortunately, even with less corporate business this year, profit margins (38 percent) still came relatively close to what we saw in 2019 (40.9 percent)."

THE PERFORMANCE OF U.S. hotels ended strong in the first quarter with March profit surging across most global regions, according to HotStats. The research firm said stronger revenues, better conversion rates and less worry by travelers about a COVID upsurge drove the first quarter surge in performance. During the quarter U.S. hotels saw an increase in its operating fortunes, according to a blog post on the HotStats website. GOPPAR in March 2022 was up $70 over January 2022 and at $90 was closing in on March 2019's level. It was the highest profit month in the U.S. since February 2020, the last normalized month of performance before COVID-19 reframed the world. ADR growth in the U.S. led the way in recovery with March ADR on a nominal basis was at its highest level since October 2018.

U.S. HOTEL PERFORMANCE dropped in the fourth week of October compared to the week before, according to STR. When compared to 2019, occupancy increased as a result of the Halloween calendar shift, as the holiday fell during the comparable week three years ago. STR reminded that in the first week of November performance metrics will show the negative side of that shift. Occupancy was 65.8 percent for the week ending Oct. 29, down from 69.9 percent the week before and up 5.2 percent from 2019. ADR was $152.94 during the week, dipped from $157.43 the week before and up 21.4 percent from three years ago. RevPAR reached $100.59 during the week, down from $110.11 the week before and up 27.8 percent from 2019. Among STR's top 25 markets, Tampa reported the largest increase in each of the key performance metrics: occupancy up 21.5 percent to 76.1 percent, ADR increased 42.1 percent to $158.38 and RevPAR improved 72.5 percent to $120.58, over 2019. Tampa has been one of the markets in Florida that have seen a performance lift associated with post-Hurricane Ian demand.

U.S. HOTEL PERFORMANCE improved in the first week of October due to school breaks and extended holiday weekend, but the performance was mixed when compared to 2019, according to STR. Hotel performance during weekdays declined due to Yom Kippur as expected. Post-Hurricane Ian demand in Florida also boosted the performance. Occupancy was 68.2 percent for the week ending Oct. 8, up from 66.4 percent the week before and decreased 3.5 percent from 2019. ADR was $153.79 during the week, increased from $149.71 the week before and up 16.9 percent from three years ago. RevPAR reached $104.83 in the first week of October, up from $99.36 the week before and increased 12.8 percent from 2019. Orlando reported the highest occupancy increase among STR's top 25 markets, up 1.9 percent to 73.6 percent, over 2019.

THE BAIRD/STR Hotel Stock Index rose 2.7 percent in November according to STR. However, hotel stocks were relative underperformers during the month for the first time since June. The index jumped 15.8 percent in October. The index was down 5.5 percent year-to-date through the first 11 months of 2022. In November, the Baird/STR Hotel Stock Index fell behind both the S&P 500, up 5.4 percent and the MSCI US REIT Index, increased 5.6 percent. The hotel brand sub-index increased 3.7 percent from October to 9,804, while the Hotel REIT sub-index fell 0.2 percent.

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.

U.S. EXTENDED-STAY hotels continued to perform well in November with recovery indices up compared to October and 2019, according to a report from The Highland Group. However, the market is showing signs of slowing. All extended-stay segments posted RevPAR gains in November compared to last year, the US Extended-Stay Hotels Bulletin: November 2022 report said. "Monthly gains in ADR and RevPAR have decelerated for most of the year and November increases were the lowest in 2022. Both economy and mid-price segments reported RevPAR increases well below the rate of inflation for the first time in November," the report said. "ADR growth is still high compared to long-term averages but with the economy segment reporting its eighth consecutive monthly decline in demand and mid-price extended-stay hotel demand also declining in November, rate resistance is building especially at lower price points."

GOPPAR OF U.S. hotels hit $65.98 in February, its highest point since October last year and more than $40 more than in January, but down from $90 in February 2019, according to HotStats. However, a rise in expenses could derail a profit rebound, the data analyzing firm said. The payroll expense of U.S. hotels was up to $66.60 per available room in February, highest since the inception of the pandemic, according to HotStats. Though payroll is up 192 percent from its lowest point during the pandemic, it is still down $30 when compared to pre-pandemic numbers. Factors such as inflation, supply chain problems and war in Ukraine are driving costs up. Expense on utilities on a PAR basis are already back to pre-pandemic levels, HotStats said.

U.S. hotel performance has declined in the fourth week of October compared to the previous week, according to CoStar. However, year-over-year comparisons revealed positive results. Occupancy came in at 66 percent for the week ending Oct. 28, slightly lower than the previous week's 69 percent, but with year-over-year growth of 0.7 percent. ADR dropped to $160.89, down from the previous week's $165.32, yet showing a notable 3.9 percent increase from the previous year. Similarly, RevPAR saw a decrease, reaching $106.16 compared to the previous week's $114.04, but reflecting a solid 4.6 percent rise from 2022. Among the top 25 markets, Minneapolis saw the largest year-over-year increase in occupancy, rising by 12.7 percent to reach 64.5 percent.

THERE WAS A slight slip in U.S. hotel performance in the third week of October compared to the week before, according to STR. However, numbers improved during the week when compared to 2019. Occupancy was 69.9 percent for the week ending Oct. 22, down from 70.3 percent the week before and down 0.5 percent from 2019. ADR was $157.43 during the week, slightly dropped from $157.52 the week before and up 16.7 percent from three years ago. RevPAR reached $110.11 in the third week of Oct. 22, just dipped from $110.78 the week before and up 16.1 percent from 2019. Among STR's top 25 markets, Tampa reported the largest increase in occupancy during the week, up 7.4 percent to 75.9 percent and RevPAR, increased 39.2 percent to $117.28, over 2019. It has been one of the markets in Florida that have seen a performance lift associated with post-Hurricane Ian demand.

U.S. HOTELS PERFORMANCE was down in the fourth week of December compared to the week before, according to STR. The market also saw lower performance in November compared to October, and performance during the month was also decreased when compared to 2019. Holiday shift affects week Occupancy was 43.9 percent for the week , down from 54.5 percent the week before and decreased 9.7 percent from 2019. ADR was $132.29 during the week, dropped from $135.08 the week before and up 2.3 percent from three years ago. RevPAR reached $58.04 during the week, decreased from $73.65 the week before and dropped 7.6 percent from 2019. Among STR's top 25 markets for the week, Houston reported the highest occupancy increase, up 3.4 percent to 43.1 percent, over 2019. Seattle posted the highest ADR lift, up 19.7 percent to $130.07, over 2019. Miami saw the steepest ADR, down 26.2 percent to $225.08 and RevPAR, dropped 42.4 percent to $138.19, declines from 2019.

GOPPAR FOR U.S. hotels in February exceeded the levels of the pre-pandemic comparable time period and was the highest since October 2022, according to STR's February 2023 Profit & Loss data. EBITDA was the only key bottom-line metric on a per-available-room basis to come in lower than February 2019, STR said in a statement. GOPPAR reached $77.37 for the month, up 1.6 percent over the same month in 2019, TRevPAR stood at $217.20, up 3.7 percent, and EBITDA PAR was $51.63, down 0.6 percent against February 2019. Labor costs were $73.70, a 2.9 percent increase. "The profit-and-loss metrics followed typical industry trends, improving from the prior month," said Raquel Ortiz, STR's director of financial performance. "Both GOPPAR and GOP margins were the highest since last fall, while profit margins came in just one percentage point below 2019. Profit margins for limited-service hotels are further behind in recovery than full service, likely due to increasing labor costs that bear heavier weight on the bottom line." "An increase in top-line group demand is beginning to show in the bottom line, as catering and banquet revenues are inching closer to 2019 levels and meeting space rentals and services charges surpassed that threshold. On a per-operating-room basis, nearly all F&B revenues outpaced the pre-pandemic comparables," Ortiz added. Of the major markets, 10 realized both GOPPAR and TRevPAR levels higher than the 2019 comparables, the statement said. "February was a slower month for markets that are more dependent on groups and conventions, such as Atlanta, San Francisco and Minneapolis," Ortiz further said. "Warmer markets have remained at the top, with Phoenix showing the highest TRevPAR recovery and second highest GOPPAR recovery for the month, helped by peak season and Super Bowl LVII."

IN JUNE, GOPPAR for U.S. hotels reached its highest level since October 2019, according to STR. All profitability metrics were up in the month compared to the month before. GOPPAR was $91.23 for the month, up from $88.63 reported in May. In April GOPPAR stood at $90.96. EBITDA PAR was $69.53 for June, TRevPAR was $226.10 and labor costs per room were $68.40. "Each of the key bottom-line metrics increased from May due to a rise in room rates as well as improved revenue from F&B and groups," said Joseph Rael, STR's senior director of financial performance. "Profit margins have held strong the past 12 months but have been slightly reduced recently due to rising wages and costs. Hotels have brought back services, amenities and F&B operations that were previously reduced, which have increased profits overall but at lower margins. While F&B revenues remain strong, catering and banquet revenue has lagged with improvement in recent months due to rising group demand."

U.S. HOTEL PERFORMANCE has increased in the second week of September compared to the previous week, according to CoStar. However, year-over-year comparisons remained mixed. Occupancy stood at 68.5 percent for the week ending on Oct. 14, a slight uptick from the previous week's 67.8 percent, and a marginal year-over-year decline of 2.3 percent. ADR increased to $164.25, up from the previous week's $163.19, marking a 3.2 percent surge compared to the previous year. RevPAR also showed improvement, reaching $112.51, surpassing the previous week's $110.68, and reflecting a 0.8 percent rise from 2022. Among the top 25 markets, Oahu Island experienced the highest year-over-year growth in occupancy, rising by 17.8 percent to reach 85.2 percent, while RevPAR increased by 29.7 percent to $243.22.

U.S. HOTEL PERFORMANCE has increased from the previous week, aligning with the extended holiday weekend, while year-over-year comparisons also continue to show positive trends, according to CoStar. The percentage changes showed positivity on weekdays due to comparisons with the Yom Kippur period from the previous year, but year-over-year occupancy rates still experienced a decline. Occupancy stood at 67.8 percent for the week ending on Oct. 7, a slight rise from the preceding week's 66.7 percent, with a marginal year-over-year decline of 0.2 percent, according to CoStar. ADR was $163.19, showing an increase from the previous week's $157.89 and a notable 5.4 percent surge compared to the previous year. RevPAR also saw an uptick to $110.68, surpassing the previous week's $105.31, and reflecting a 5.2 percent rise from 2022.