Hilton, Marriott, and Hyatt stocks are surging while Wyndham, Choice, and hotel REITs lag behind, and the market's logic reveals a growing bet that luxury scale matters more than the owners who built the industry's middle.
The Baird Hotel Stock Index posted its third straight monthly gain in February, up 5.9%. But brands and REITs are living in two different markets, and the gap is widening.
The extend-and-pretend era is ending. Owners who borrowed at 3.5% in 2021 are about to refinance at 7%, and the math on that gap is brutal.
Public hotel REITs are priced like distressed assets while private buyers are paying full freight for the same buildings. That gap is either the market being irrational or a massive arbitrage window that's about to close.
