New Mexico Hospitality Market Report
Market Overview
New Mexico offers a unique blend of cultural diversity, natural beauty, and economic opportunities. The state offers a thriving economy that hinges on several key sectors, with tourism being one of its brightest stars. Visitors are drawn to New Mexico from near and far, eager to explore its rich heritage, vibrant arts scene, and pristine wilderness. The New Mexican hospitality sector has a diverse hotel stock, with hotels at both the high-end and budget-friendly ends of the spectrum. This hospitality report highlights the market performance of the following markets: Albuquerque, New Mexico North, and New Mexico South.
Highlights
- The Albuquerque market has seen a notable increase in RevPar in the last 12 months, by 8.0%.
- The New Mexico North hotel market boasts various lodging options, with a significant presence of hotels catering to upscale and budget-conscious travelers.
- Employment in the New Mexico South hospitality market was increasing at an annual rate of 4.0%, a gain of approximately 9,900 jobs.
Albuquerque Market Performance
The Albuquerque hospitality market is relatively small, with about 18,000 rooms spread over 182 properties, with the average number of rooms being 98. Albuquerque stands out as one of 10 hospitality markets in the U.S. with a higher-than-average share of Economy and Midscale accommodations alongside a higher-than-average representation of Upper Upscale and Luxury rooms. Over the last 12 months, the monthly occupancy rate has averaged 64.6%, slightly higher than the national average of 63.2% during the same period. Four projects containing about 370 rooms are underway, which is the most significant under-construction pipeline in over three years.
Only one transaction has been completed in the Albuquerque hospitality market in the last 12 months. While Albuquerque is not typically among the more frequently traded hotel markets in the U.S., it usually records several transactions within a given year.
Albuquerque by the Numbers Last 12 Months
Source: CoStar Group
- Occupancy: 64.6%
- ADR: $112.83
- RevPAR: $72.9M
- Supply: 6.4M SF
- Demand: 4.2M SF
New Mexico North Market Performance
The New Mexico North market has about 18,000 rooms spread over 303 properties. The market is distinguished by hotels generally smaller than the national average. These properties have around 58 rooms, significantly lower than the U.S. average of 89 rooms per building. The occupancy rate over the past 12 months is 60.6%, slightly below the national average of 63.2% during the same period.
In August, the 12-month average RevPAR in the New Mexico North hospitality market showed a yearly growth rate of 4.4%, indicating positive performance. Currently, there is only one hotel project in the construction pipeline, consisting of a single hotel with 30 rooms.
Just two transactions have closed in the New Mexico North market during the past 12 months, which is notably less than the three-year average for a market that is already considered one of the less frequently traded hotel markets in the U.S.
New Mexico North by the Numbers Last 12 Months
Source: CoStar Group
- Occupancy: 60.7%
- ADR: $141.09
- RevPAR: $85.56
- Supply: 6.3M SF
- Demand: 3.8M SF
New Mexico South Market Performance
The New Mexico South hospitality market has about 17,000 rooms spread over 293 properties, with a typical building having about 59 rooms. The available accommodations lean towards budget-friendly options. Over 55% of the rooms in this area belong to the Economy or Midscale categories, a ratio found in approximately one out of every five U.S. markets. In contrast, only around 860 rooms are classified as Luxury or Upper Upscale, making up a relatively small portion of the total inventory. In the New Mexico South market, there are currently 220 rooms in the construction phase, marking the lowest number of ongoing projects in over three years.
Generally, New Mexico South is not considered one of the more actively traded hotel markets in the U.S. However, there were 10 transactions in the last 12 months, surpassing the market’s three-year average for investment activity.
New Mexico South by the Numbers Last 12 Months
- Occupancy: 47.9%
- ADR: $98.44
- RevPAR: $57.03
- Supply: 6.2M SF
- Demand: 3.6M SF
