Havasu’s Hotel Gap Is Real, and Investors Are Taking Notice

Lake Havasu City sees a lot of people moving through it. It has major jet ski competitions, spring break, fall riding season, and summer boat traffic that can fill every ramp by 7 a.m.

The hospitality demand in Lake Havasu City is not a theory. It shows up in occupancy data, parking lots, and restaurant wait times every peak season. What has not kept pace is the hotel stock that serves it.

That gap is where an interesting investment conversation starts.

An Aging Hotel Inventory Problem

Most hotels operating in Lake Havasu City today were built for a different era. They have run for decades without significant capital reinvestment, and it shows.

Two new hotels have opened in recent years. Both outperform the legacy properties on every meaningful metric. Newer products capture the traveler who has a choice. The older properties compete for whatever is left.

A third operator is reportedly searching for a location in Havasu right now. That search is instructive on its own. Informed hospitality investors have already done this math.

The aging inventory is not going away on its own, and the market has not produced enough new supply to replace it. That gap is what makes the development conversation worth having.

Hotel Sites Are Hard to Find in Havasu

Here’s the part most people miss. Finding a developable hotel site in Lake Havasu City is harder than it looks.

Investors and developers come to town, drive around, and see what appears to be available land. What they are often looking at is state-owned land or parcels with utility and access problems. In other cases, the acreage is held by sellers at prices that do not allow development to pencil.

Residential lots in the city have dropped below 2,000 remaining. Commercial land scarcity tracks the same pattern. The city’s 2026 general plan signals a deliberate push toward infill development along established corridors rather than expanding outward into county land.

This growth prioritizes McCulloch Boulevard, State Route 95, and the downtown core. That policy shift reflects a hard reality: there is not much left to expand into.

Randy Shuffler has spent years tracking land availability across this corridor, watching developers arrive with capital and leave without securing a site. His read on Havasu’s supply constraint is grounded in that pattern.

“It’s tough to find the land. There’s a bunch of older hotels that have been here for a really long period of time, and then there’s been two new hotels built. I know there’s another hotel looking for a location here in Havasu, and they do well, because a lot of the people coming and visiting just get tired of these older, rundown hotels. The new ones do really well.” – Randy Shuffler, Founder and Principal Broker, Lake Havasu City Commercial at Realty ONE Group Mountain Desert.

Underwriting Lake Havasu’s Seasonal Revenue Curve

Seasonal underwriting in a hospitality market like Havasu requires modeling the actual revenue curve, not an average. Jet Ski Nationals, spring break, poker runs, and fall riding season drive rate spikes and full occupancy during peak windows. Between those windows, the market softens.

The STR (formerly Smith Travel Research) Star Report, the industry’s standard hotel performance benchmark, shows strong overall performance for Havasu. But the revenue curve is uneven, affecting debt service coverage and cash flow planning. A hotel with full event occupancy and 60-70% month performance looks very different on a trailing 12 than a stabilized highway property.

That is not a reason to walk away from the market. You just need to underwrite it correctly. Investors using blended occupancy assumptions in Havasu often end up with properties that miss pro forma targets during the shoulder seasons.

Stress-test debt service coverage against the softer months. That is where the real underwriting happens.

The American Hotel and Lodging Association publishes industry benchmarks that show what healthy season performance looks like across comparable leisure-driven markets. These benchmarks are a useful reference when building assumptions.

Kingman’s More Predictable Hospitality Model

For investors who want hospitality exposure without the seasonal revenue curve, Kingman’s I-40 corridor operates on a different logic entirely.

Kingman sits at the intersection of I-40 and US-93, one of the highest-traffic commercial corridors in the Southwest. Hotels along I-40 serve a steady year-round mix of long-haul drivers, commercial fleets, and cross-country travelers.

Randy Shuffler has closed multiple hotel transactions in Kingman and tracks Star Report performance across both markets. The pattern is consistent. Kingman’s I-40 properties produce steadier numbers, lower volatility, and more predictable income.

“Kingman, a lot of people’s strategy is, I am building a hotel right off of I-40, and it’s super consistent. The Star Report numbers are really good. It’s funny, you look at some of those hotels, and you don’t even think anybody’s there. But people get there late, they spend the night, get their coffee, and they’re out. But they do really well.” – Randy Shuffler, Founder and Principal Broker, Lake Havasu City Commercial at Realty ONE Group Mountain Desert.

Kingman deserves a serious look from any investor modeling corridor hospitality returns. It has lower land costs, stronger infrastructure for large-format development, and demand drivers that run year-round.

What It Takes for a Deal to Pencil

The hospitality gap in Lake Havasu City is real. New product outperforms legacy stock. Demand exists, and the market has not been oversupplied.

The constraint is land. Anyone serious about a Lake Havasu hotel play needs to start with the site search, not the pro forma. If the land price does not support construction costs and a realistic stabilized cap rate, the opportunity does not exist.

Kingman offers an easier entry point for investors seeking corridor hospitality without complex site selection. I-40 traffic is steady, supporting more predictable income and simpler land economics.

Havasu’s permanent land scarcity creates persistent pricing pressure across all commercial asset classes, not just hotels.

What Serious Investors Ask

Is Lake Havasu City a good market for hotel investment right now?

Havasu carries genuine hospitality demand driven by year-round events, lake traffic, and tourism. The gap between demand and quality supply is real. New properties outperform legacy stock by every metric. The challenge is finding developable land at a price that allows construction to pencil.

How does Havasu’s seasonal demand affect hotel underwriting?

Revenue in Havasu concentrates around events: Jet ski nationals, spring break, poker runs, and fall riding season. Shoulder months soften. Investors who model using blended occupancy assumptions will find that the actual cash flow curve underperforms the pro forma. Correct underwriting means modeling the real seasonal curve and stress-testing debt coverage against softer months, not just annual averages.

What is the Star Report, and why does it matter for Havasu and Kingman hotel deals?

The Star Report is the hospitality industry’s standard for performance benchmarking. It tracks occupancy, average daily rate, and revenue per available room against a competitive set. For Havasu and Kingman hotel investments, Star Report data shows how a property performs relative to comparable properties. It also reveals whether the income story holds up beyond headline occupancy figures.

How does the Kingman I-40 hospitality model compare to Lake Havasu City?

Kingman’s I-40 corridor generates consistent, year-round demand from long-haul drivers, commercial fleet, and interstate road-trip traffic. The revenue curve is flatter and more predictable than Havasu’s event-driven seasonality. Land costs are lower, large-format development is more feasible, and the income stream does not depend on an event calendar. For investors prioritizing consistency over peak-season upside, Kingman is a serious alternative worth underwriting.

Should I buy an existing hotel or develop a new one in this corridor?

Existing acquisitions offer known operating history, established Star Report comps, and faster stabilization. Development allows investors to build the product the market actually wants, but only after solving land constraints. Current construction costs also make the pro forma tight. The right answer depends on your basis, timeline, and risk tolerance. If development is the path, the site search starts before the pro forma does.

How do flag affiliation and brand standards affect hotel investment returns?

Flagged properties under brands like Marriott, Hilton, or IHG typically achieve higher occupancy and rates. This advantage comes from stronger distribution, loyalty programs, and traveler recognition. They also require ongoing property improvement plan (PIP) compliance, which creates capital expenditure obligations that affect true net income. Independent properties trade at wider cap rates and offer more operational flexibility but carry higher volatility. In a market like Havasu or Kingman, flag affiliation can meaningfully change the underwriting picture. Verify any PIP requirements and their cost estimates before you close.

Is there off-market hospitality inventory in Lake Havasu City or Kingman?

Off-market activity exists in both markets. Legacy hotel owners who have held for decades are not always actively listed but may respond to direct outreach. In Havasu, the more productive starting point is the land search. Finding a site that pencils typically requires local relationships and corridor knowledge that does not surface on listing platforms. Relationships built over years in this market matter more than LoopNet searches.

Connect on Hospitality Opportunities in This Corridor

Havasu offers real hospitality demand, but the deal only works if the site supports it. Most people underestimate how hard that step is. That reality often leads investors to look to alternatives like the Kingman I-40 corridor.

I work both markets and can help you evaluate how properties will perform under real conditions. Contact my team to review current opportunities and develop a strategy that matches your investment goals.

Randy Shuffler is the founder of Lake Havasu City Commercial at Realty ONE Group Mountain Desert. He holds the CCIM designation and a BS in Finance from San Diego State University. He has spent more than 20 years advising investors across Lake Havasu City, Kingman, and the Mohave County corridor.