The Phoenix market struggled initially to overcome the effects of the Great Recession and negative press pertaining to a boycott over the SB 1070 immigration law in 2010, which contributed to RevPAR fluctuations through 2012. Operating performance in Phoenix realized strong year-over-year growth in 2013 and 2014, as a limited supply pipeline and improving local economy bolstered overall hotel performance in the region. The Phoenix lodging market recorded positive trends following the Super Bowl in 2015, with overall RevPAR reaching a historical high in 2019, despite continued supply growth. Increases in commercial activity throughout Phoenix, including the resurgence of Downtown Phoenix and the expansion of Class-A office development in the outlying submarkets of Mesa, Gilbert, Chandler, and North Scottsdale, boosted demand during that period. While the state government, higher education (Arizona State University), and the construction industry have long been economic stalwarts in Phoenix, significant economic diversification efforts successfully attracted major employers in the medical research, technology, financial services, and insurance industries over the past several years.
While the Phoenix market began 2020 strong, the outbreak of COVID-19 and its impact on travel caused a significant RevPAR decline in 2020. Many events were postponed or canceled, particularly affecting hotels near the Phoenix Convention Center (PCC), as well as the area resorts. Demand began to rebound in the summer, and although RevPAR remained suppressed, declines through the remainder of the year were less severe than those of other top 25 metro markets. Transient demand from areas with stricter COVID-19 restrictions bolstered occupancy in the market. While group demand was minimal in the first half of 2021, demand strengthened in the second half of the year, and the PCC and area resorts reported a significant number of re-bookings for future years. Although demand and ADR registered low levels in early 2021, robust demand beginning in March 2021 supported the 2021 rebound. In May 2021, occupancy, ADR, and RevPAR exceeded 2019 levels during select periods, such as Memorial Day. The outlook is optimistic given the dynamics of this market, the successful rollout of vaccines in the U.S., the removal of COVID-related restrictions, the recent increase in travel, and the continued strengthening of international tourism, commercial demand, and meeting/group events.
* 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.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
For the Latest Information and Analysis on the Impact of COVID-19Click Here
If you’d like to speak to someone personally to review details of our most current analysis, please don’t hesitate to contact
us directly.
ADR, Demand, Occupancy, RevPAR, and Supply Projections:
|
|
|
|
| ADR Change
|
|
|
|
| Market Demand Change
|
|
|
|
| Hotel Occupancy Increase/Decrease
|
|
|
|
| RevPAR Change
|
0.0%
|
0.0%
|
0.0%
|
| Market Supply Growth
|
