United States -  Santa Fe

Overview:

The Santa Fe market is the crown jewel of New Mexico, housing most of the state’s top properties, including the Four Seasons Resort Rancho Encantado Santa Fe, Rosewood Inn of the Anasazi, La Fonda, and La Posada de Santa Fe, among others. The city is the state’s capital, and while the market benefits from much government activity and demand from the nearby Los Alamos National Laboratory (LANL), the most important industry for the city’s hotel sector is tourism. Santa Fe is recognized as the third-largest art market in the U.S. based on sales, boasting over 300 art galleries and shops, and Condé Nast Traveler has named the city as one of the top travel destinations in the U.S. Visitors enjoy touring the many historic sites of Santa Fe, visiting area parks, and attending performances of the Santa Fe Opera, among other attractions.

While hotel transactions in the market over the last several years have been limited, most of the state’s higher-value hotels are found within a short walk of the city’s downtown Plaza de Santa Fe. Recent transactions in the market have included the sale of the Eldorado Hotel & Spa, Bishop’s Lodge, Courtyard by Marriott Santa Fe, and Baymont Inn & Suites Santa Fe; however, no confirmed sales prices could be verified. Occupancy and average rate for the downtown top properties has strengthened over the last several years, with occupancy increasing to the high 60s and average rate bracketing the $180 mark. Given that rates reached nearly $200 prior to the onset of the recession, upside for this submarket remains. With renovations at many hotels recently completed, including those at the Rosewood Inn of the Anasazi, La Posada de Santa Fe, Eldorado, and La Fonda, and in consideration of planned upgrades at other hotels in the near term, we anticipate rates to top the previous high soon. Furthermore, the multimillion-dollar renovation of the former Bishop’s Lodge into a luxury Langham Hotel & Resort should further bolster the market’s reputation as a luxury destination. As the economy continues to expand, so too should the breadth of travelers to this exceptional city. In light of the market’s overall dynamics, hotel values should continue to increase in the near future.

* 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:

Santa Fe United States
Previous Year 0% (57 of 71) +1% (49 of 71)
Growth in 2017 +1% (51 of 71) +2% (36 of 71)
Growth in next 4 years +8% (49 of 71) +12% (32 of 71)

Change In Value For Market:

Santa Fe RevPar % Change

For more information, please contact:

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