Unlocking Value in Tucson’s Resilient Hospitality Market: Why Caliber’s DoubleTree Refinancing is a Strategic Masterstroke

The hospitality sector’s post-pandemic evolution has revealed a stark divide: markets with resilient demand drivers and strategic asset management are primed for growth, while others lag under inflation and macroeconomic headwinds. Nowhere is this clearer than in Tucson, Arizona—a city quietly transforming its hotel landscape to capitalize on pent-up demand and demographic shifts. Caliber Realty’s recent refinancing of the DoubleTree by Hilton Tucson Hotel exemplifies this opportunity. By leveraging Tucson’s stabilizing occupancy trends and refinancing at historically low rates, investors stand to benefit from a property positioned at the intersection of economic resilience, strategic location, and undervalued assets. Here’s why this move is a masterclass in hospitality real estate investing.

Occupancy Trends: Stability Amid a Shifting Landscape

Tucson’s hotel market has emerged from the pandemic with remarkable demand segmentation resilience. While national occupancy dipped to 63.1% in early 2025, Tucson’s hotels maintained occupancy in the high 60s, buoyed by a mix of leisure travelers and returning group events. For instance, the Gem Show (a signature Tucson event) drew 95% of pre-pandemic attendance in 2023, while the Jehovah’s Witnesses convention brought 4,000 attendees—a sign of group travel’s rebound.

Crucially, Tucson’s population growth (0.6% in 2024, driven by net migration) and job market stability (4.0% unemployment in 2025) underpin this demand. The city’s education and healthcare sectors, which account for 30% of local employment, provide a steady baseline for transient business travelers. Meanwhile, leisure demand is stabilizing, though it remains price-sensitive, with consumers prioritizing value in an inflationary environment.

The DoubleTree, located in Tucson’s central business district, benefits from these trends. Its proximity to the Tucson Convention Center and the University of Arizona ensures a diverse revenue stream. Even as average daily rates (ADR) grow slower than inflation, the hotel’s occupancy stability positions it to outperform peers in volatile markets.

Refinancing: Capturing Cost Benefits in a Volatile Rate Environment

Caliber’s decision to refinance the DoubleTree is a capital efficiency play. With the U.S. Federal Reserve pausing interest rate hikes in 2025 and the 10-year Treasury yield stabilizing around 3.5%, now is an ideal time to lock in low borrowing costs. For a hotel like the DoubleTree, which likely carries a debt-to-EBITDA ratio under 5x, refinancing could reduce its interest burden by 15–20%, freeing cash flow for renovations or debt repayment.

The math is compelling: a $100M loan refinanced at 4.5% instead of 6% saves $1.5M annually in interest alone. This capital can be reinvested into upgrading guest amenities—think modernizing meeting spaces or enhancing tech infrastructure—to boost RevPAR (revenue per available room). Tucson’s hoteliers are already pivoting: older economy properties are being converted to multifamily housing, while newer upscale hotels (e.g., The Eddy Hotel) are raising the bar for quality. The DoubleTree, by contrast, retains its strategic mid-market position, catering to both leisure travelers seeking value and corporate clients requiring reliability.

Long-Term Growth: Tucson’s Untapped Economic Potential

Tucson is no Phoenix, but its slower growth trajectory offers hidden advantages. While Phoenix’s overheated market risks overbuilding, Tucson is underpenetrated in key sectors. Its education and healthcare clusters—including the University of Arizona and Banner Health—drive steady demand, and its diversified convention calendar reduces reliance on single-event volatility.

The Tucson MSA’s 0.9% GDP growth in 2024 may seem modest, but it outperforms Arizona’s rural counties and aligns with the state’s broader demographic shift. Young professionals fleeing California’s housing crisis (where mortgage costs consume 60–80% of median income) are increasingly drawn to Tucson’s affordability (37% mortgage-to-income ratio in late 2024). This net migration fuels both residential demand and business travel, as new companies anchor Tucson’s growing tech and renewable energy sectors.

The DoubleTree’s refinancing allows Caliber to capitalize on this momentum. Upgrades to the property could align it with Tucson’s evolving appeal to millennials and Gen Z travelers, who prioritize sustainability and convenience. Meanwhile, the city’s $110M+ investments in hotel renovations (like the JW Starr Pass Resort) signal investor confidence in its long-term prospects.

Why Invest Now?

The DoubleTree’s refinancing isn’t just about cost savings—it’s about owning a piece of Tucson’s next chapter. With occupancy stabilizing, interest rates plateauing, and the city’s economy diversifying beyond tourism, this asset offers asymmetric risk-reward:

• Upside: If Tucson’s job growth (1.0% annually) accelerates, or leisure demand rebounds sharply, RevPAR could surge.
• Downside: The hotel’s mid-market positioning and group/event-driven revenue buffer it from price-sensitive leisure declines.

Conclusion: A Rare Opportunity in a Resilient Market

Caliber’s move to refinance the DoubleTree by Hilton Tucson Hotel is more than a financial maneuver—it’s a strategic bet on Tucson’s hidden strengths. In a sector where many markets face overbuilding or demand volatility, Tucson offers a rare combination of stable occupancy, affordable capital costs, and demographic tailwinds. For investors seeking to avoid overhyped coastal markets, this asset represents a chance to buy low in a resilient economy.

The time to act is now: with refinancing costs at multiyear lows and Tucson’s occupancy trends holding firm, the DoubleTree stands as a cornerstone investment in a city poised for quiet, steady growth. Don’t miss the opportunity to profit from a market that’s quietly rewriting its narrative—one refinanced hotel at a time.

Investor takeaway: Pair this asset with exposure to Tucson’s education and healthcare sectors (e.g., stocks in UAZ or Banner Health) for a holistic bet on the region’s future.