THE BAIRD/STR Hotel Stock Index rose 1.1 percent in February to end at 2,313, outperforming the MSCI REIT (RMZ), which reported a 1.4-percent decrease over the same period.

“The hotel industry’s performance held steady during the first part of the year,” said Randy Smith, chairman and co-founder of STR.

“The ever-changing economic landscape may keep some investors at bay, but we are hoping to see continued interest with the steady performance of the industry.”

David Loeb, senior hotel research analyst and managing director at Baird, said: “We downgraded our hotel sector rating to market-weight in mid-February, as investor expectations were high and stock valuations were full heading into fourth-quarter earnings.”

He added: “Managements’ 2012 guidance has been conservative and investor expectations for the year have been reset lower. Fundamentals are still strong, however, and we remain bullish on the longer-term lodging recovery.”

The companies that comprise the Baird/STR Hotel Stock Index include Hyatt Hotels Corporation, InterContinental Hotels Group, Marriott International, Starwood Hotels & Resorts Worldwide and Wyndham Worldwide among other international hotel chains.