'Hotel stocks significantly underperformed in January as coronavirus fears mounted'.

“Last year’s positive stock market momentum reversed course sharply, and investors have become increasingly concerned about how the spread of coronavirus might impact global growth with hotel stocks being disproportionately impacted as a result. Industry RevPAR forecasts for 2020 continue to moderate, and most industry participants now are expecting flattish growth”, said Michael Bellisario, senior hotel research analyst and director at Baird.

“As presented at ALIS last week, we’re forecasting 2020 to be the industry’s first non-growth year in RevPAR since 2009,” said Amanda Hite, STR’s president.

“Even though preliminary U.S. performance results for January have shown positive, the uncertainty around the coronavirus outbreak on top of already modest growth expectations has created angst around the investment community. It will be some time before we know the extent of the coronavirus impact on travel and lodging in the U.S., but this is no doubt a concern with global implications in the sector. It is worth pointing out that the total number of Chinese visitors was expected to be around 2.8 million in 2020, and any disruption to this flow will impact local and national demand growth figures.”

January performance of the Baird/STR Hotel Stock Index fell behind both the S&P 500 (-0.2%) and the MSCI US REIT Index (+1.0%).

The Hotel Brand sub-index decreased 6.4% from December to 8,052 while the Hotel REIT sub-index declined 10.8% to 1,364.

About STR
STR provides premium data benchmarking, analytics and marketplace insights for global hospitality sectors. Founded in 1985, STR maintains a presence in 15 countries with a corporate North American headquarters in Hendersonville, Tennessee, an international headquarters in London, and an Asia Pacific headquarters in Singapore. STR was acquired in October 2019 by CoStar Group, Inc. (NASDAQ: CSGP), the leading provider of commercial real estate information, analytics and online marketplaces. For more information, please visit str.com.