United States -  Albuquerque

Overview:

Albuquerque is the largest city in New Mexico and benefits from a diversified economy, with Sandia National Laboratories, Kirtland Air Force Base, and the University of New Mexico providing strong demand for hotels and serving as incubators for smaller research and development projects. In addition, the Albuquerque Convention Center recently completed a $20-million renovation, which is anticipated to attract increased group business to the market. Albuquerque’s economy continues to transition and make strides after suffering the effects of the Great Recession and the government sequestration. Although unemployment levels still remain high compared to the nation and other Mountain West cities, the market gained 4,700 jobs in 2015, primarily in the education and health services sectors. Lodgers’ tax revenue continues to improve, having increased over 2% in 2015. In addition, the government per-diem allowance increased in October, which has assisted in improving average rates. Furthermore, Albuquerque continues garner recognition as a top tourist destination, ranking as the sixth favorite city in the country, according to Travel + Leisure.

Despite not having a robust economy, new hotels continue to be developed, with the recently opened Hampton Inn & Suites replacing an older generation Hampton Inn, and new hotel brands, such as the Home2 Suites by Hilton, entering the market in 2015. Currently, the luxury Hotel Chaco is under development in Albuquerque's Old Town submarket. This 118-room hotel is scheduled to open in the summer of 2016.

Albuquerque has not experienced the strong recovery in values realized in other markets around the country, as noted by the drop in values from 2012 through 2014 and the minimal growth recorded in 2015. In addition, limited sales volume occurred in 2014 and 2015, with four hotels sold at recorded sales prices averaging just under $62,000 per room. Future gains are forecast to be modest given recent history and an expectation of relative stability given no anticipated changes related to the market’s fundamental demand drivers.

* The HVI is an index, a statistical concept reflecting a measure of the difference in the magnitude of a group of related variables compared with a base period. As such, it is a measure of broad market trends, rather than a conclusion as to the specific value of any asset, and cannot be applied to an individual asset. A good comparison is the Consumer Price Index. While this index provides a reliable measure of the overall rate of inflation in a region, it does not indicate how the price of milk has changed at your grocery store. So how can the HVI be of use to an individual investor? Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent big picture data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Valuation Trends and Predictions:

Albuquerque United States
Previous Year -2% (62 of 71) +1% (49 of 71)
Growth in 2017 0% (58 of 71) +2% (36 of 71)
Growth in next 4 years +9% (44 of 71) +12% (32 of 71)

Change In Value For Market:

Albuquerque RevPar % Change

For more information, please contact:

Michael Handy
mhandy@hvs.com
  • +1 978 808-7852 (w)