Marcus & Millichap

Southwest Hospitality Investment Forecast

Second Half 2018 Outlook

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Tourism Boosts Occupancy in the Southwest; Investors Take Notice

Arizona and New Mexico lead occupancy growth. Rising visitation to the South¬west region contributes to healthy room demand, supporting strong occupancy gains. Arizona and New Mexico lead the region in occupancy growth, each registering more than 100-basis-point increases in the rate during the past 12 months. In Arizona, large events hosted throughout the Phoenix metro and above-average job growth continue to fuel room demand from business and individual travelers alike. Within New Mexico, the state’s tourism campaign, New Mexico True, continues to drive tourists to the state. New Mexico posted the greatest increases in occupancy, the average daily rate and RevPAR in the region.

Steady growth in Southwest region fu¬els bidding for hotels. Strong property performance throughout Arizona and New Mexico nearly doubled transaction velocity in both states and contributed to an overall 28 percent increase in activity throughout the Southwest region. In Arizona, buyers focused on assets in the Phoenix metro, Tucson and Sedona while investors in New Mexico primarily acquired properties located in Albuquerque, Las Cruces and Santa Fe.

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