The research firm's midyear survey shows Tucson bucked the statewide slump by posting a 2.2% increase in its average occupancy for a high of 70.2%. The state average was 67.8%, down from last year's 68.2%. Blame it on the summer heat and sagging economy, say the researchers.

Northern Arizona was the hardest hit, where occupancy dipped to 47.3%, down 8.7% from the previous year. Eastern Arizona occupancy was recorded at 50.7%, a 3.1% drop from midyear 2000. In the Valley, Tempe saw the biggest decline with a 3.1% fall for a 67.8% occupancy rate. West Phoenix escaped the downturn, posting a 2.5% increase for an average occupancy of 65.4% and was the city's only section to do so.

The drooping economy had its greatest impact on upscale properties, which were off 4.8% overall for hotels located outside Tucson and Phoenix borders. The statewide average upscale occupancy now stands at 58.1%. Luxury hotels in the Valley declined by 2.9%. Even Tucson's high-end market got hit, showing a 4.3% drop in the occupancy rates.