Q1 2025 New Mexico Hospitality Market Report
Key Findings
- Albuquerque’s current market cap rate stands at 8.5%, in comparison to the national average of 9.3%.
- Hotel trades in the last year totaled $22.2 million, exceeding the market’s three year average of $18 million.
By the Numbers
- Occupancy: 61.7%
- ADR: $114.43
- RevPAR: $70.58 | Source: CoStar Group
Albuquerque Market Performance
Albuquerque is a minor U.S. hotel market with around 18,000 rooms split among 179 properties. The average hotel in the area has roughly 99 rooms, which is not significantly different from the general US average. Employment in the market has lately increased at a 1.4% annual rate, adding approximately 6,000 positions. While this is a respectable outcome, it represents the slowest rate of employment growth in the previous 12 months, which peaked at 2.3%.
Santa Fe Market Performance
Santa Fe boasts 64 hotel properties with roughly 5,500 rooms. The market contains 2,300 Luxury and Upper Upscale rooms, 1,900 Upscale and Upper Midscale rooms, and 1,300 Midscale and Economy rooms. As of March, Santa Fe’s 12-month occupancy rate is 67.8%, ADR is $198, and RevPAR is $134. Year over year, 12-month occupancy has changed by 2.7%, with ADR changing by 1.2%, and RevPAR by 3.9%. Santa Fe’s pipeline contains approximately 27 rooms under construction, which accounts for 0.5% of its existing inventory. No hotel assets have delivered in the last 12 months.
Construction
New Mexico has four developments under construction, totaling 254 rooms. The market’s construction pipeline has remained relatively stable with no construction starts since Q3 2024. Under construction inventory has maintained a rate of 0.49%. One of the four developments in the pipeline is set to be completed later this year, adding 27 new rooms to the market. The remaining three properties will see completion moving into 2026.
Sales
In the last 12 months, 5 hotels in Albuquerque have exchanged for a total of $22.2 million. This compares to a three-year average yearly sales volume of $18.0 million. Over the last year, sales including Upscale and Upper Midscale accounted for $11.0 million in sales volume. Trades involving Midscale & Economy assets, totaled $11.2 million for the same time period. The market cap rate is 8.5%, in comparison to the national average of 9.3%.
