HENDERSONVILLE, Tennessee, and MILWAUKEE—The Baird/STR Resort Inventory Index dropped 10 p.c in December to a degree of 4,885. For 2022 as an entire, the inventory index was down 15 p.c.
“Resort shares ended a comparatively sturdy yr on a weak word as recessionary fears and slowing progress issues had been entrance and heart for buyers in December, which prompted lodge shares to underperform through the month,” stated Michael Bellisario, senior lodge analysis analyst and director at Baird. “Pebblebrook’s detrimental fourth-quarter preliminary earnings announcement prompted the lodge REITs to lag in December and strengthened buyers’ detrimental sentiment towards the sub-sector. In 2022, the worldwide lodge manufacturers outperformed the S&P 500 by greater than 500 bps; the lodge REITs outperformed the RMZ by greater than 1,000 bps, which was the primary yr of relative outperformance since 2017. For the yr, the worldwide lodge manufacturers topped the lodge REITs by roughly 280 bps.”
“Whereas the long run weighed closely on investor sentiment, U.S. lodge efficiency accomplished the yr in strong place,” stated Amanda Hite, STR’s president. “Room demand within the remaining month of 2022 was the best for any December earlier than it—even 2019, the earlier file holder. When trying on the full yr, demand got here in barely beneath 2019 ranges, and most of that deficit was seen throughout Q1 when omicron was at its peak. Nominal RevPAR completed the yr above the pre-pandemic comparable, and we stay assured that the metric will proceed to develop regardless of the looming recession. Inflation-adjusted RevPAR, nonetheless, remained 6 p.c behind the 2019 benchmark, which is significantly higher than what was seen three years after the Nice Recession.”
In December, the Baird/STR Resort Inventory Index fell behind each the S&P 500 (down 5.9 p.c) and the MSCI US REIT Index (down 5.8 p.c).
The Resort Model sub-index decreased 9.2 p.c from November to eight,904, whereas the Resort REIT sub-index fell 12.8 p.c to 1,038.