Hotel Online
News for the Hospitality Executive

.

advertisement
 
 

WHI Market Focus: Resilient Omaha

by Tina on September 8, 2010

The hotel real estate industry is going through the most difficult time in generations.  The recent pickup in performance measures gives everyone in the industry hope the worst is behind us.  As an active adviser in the hospitality investment market, Warmbrodt Hotel Investments is involved in numerous opportunities and challenges across the country.  WHI would like to share the compiled knowledge and research with its clients, colleagues and friends.

We are pleased to introduce our first Market Focus newsletter from Warmbrodt Hotel Investments.  Our newsletters will either highlight a particular market, or discuss pressing issues involving our industry.  We welcome your discussion and feedback.  Please add your comments below or feel free to call and discuss opportunities!

Resilient Omaha : The Heart of America

Downtown Omaha, Nebraska

Warmbrodt Hotel Investments has been extremely active in the Omaha, Nebraska metropolitan area for the last several years.  The resiliency and promise the market continues to show is a perfect example of the success of business friendly community.

The lodging market in Omaha can be characterized as a relatively stable market.  In November of 2006, the Omaha World Herald reported an additional 2,000 rooms under construction or in the planning stages around the metropolitan area.  Almost all were completed, with the additional supply replaced by projects not mentioned in the report.  The majority of construction occurred in downtown and Council Bluffs as well as West Omaha and the southwest Sarpy County suburb.

Hampton Inn, Homewood Suites, Fairfield and Holiday Inn all opened around the beginning of 2008 in downtown.  Council Bluffs completed a Springhill Suites, Value Place, Microtel, Sleep Inn, (recently converted to Holiday Inn Express), and Hilton Garden Inn.  John Q. Hammons planned nearly 600 rooms in La Vista with the recent construction of Embassy Suites and Courtyard, however the Residence Inn project was kept on the shelf.

A separate developer built a Hampton Inn off the same exit on 126th Street and I-80.  Hilton Garden Inn at Village Pointe mall in West Omaha and Hampton Inn near Alegent Health Lakeside Hospital are also examples of suburban growth westward.  North of town along I-680, Holiday Inn Express opened in 2008, while in the southern suburb of Bellevue, Hampton Inn and Candlewood were completed.  Redevelopment in town consisted of the Courtyard Marriott in Aksarben Village and Towne Place Suites in Old Mill business park.

Projects under construction in 2010 include the Staybridge Suites near Children’s hospital off 80th and Dodge, Value Place in Bellevue, and Holiday Inn Express next to WalMart on I-80 and Highway 370.  In November of 2010, Starwood Hotels will return to Omaha with The Element at Midtown Crossing, Mutual of Omaha’s campus redevelopment just west of downtown.   The Hilton attached to the Qwest Center recently announced a 150 room expansion.

In light of 20% addition in supply, it is truly remarkable the market continues to beat national averages. However, upon a closer look, recent economic developments have added significant demand generators, justifying the new supply.

Omaha began the turn of the century with grand ambitions for transforming its downtown.  An admirable balance between public and private investment helped the city transform an environmentally challenged industrial site into a beautiful riverfront.  The coordination led to Gallup headquarters, National Park Service headquarters, Qwest Convention Center, residential condominiums and a pedestrian bridge crossing the Missouri River into Council Bluffs.  Simultaneously, headquarters were being built for Union Pacific and First National Bank within different blocks inside downtown.

Food conglomerate Con Agra rejuvenated their campus, while real estate developers and Creighton University added residences from the Old Market to north downtown.  Over $2Billion was invested in giving Omaha’s downtown a truly live, work, and play atmosphere.  Today, TD Ameritrade Park is under construction across 10th Street from the Qwest Center.  It will be home to the College World Series for the 2011 season and beyond.

Omaha’s economy has always seen steady growth. Traditionally, the industries giving the local market a solid foundation included telemarketing, insurance, transportation, agriculture, and food manufacturing.  Today, the low cost of living and highly educated workforce are attracting some of the world’s biggest IT companies.  Google and Yahoo each invested hundreds of millions of dollars in data centers the past 3 years.  Combined with the existing presence of PayPal and TD Ameritrade, Omaha is becoming a known destination for IT services.  The United States Strategic Command, located at Offutt Air Force Base in Bellevue, has brought numerous defense contractors working in information operations and military deterrence.  Also, the healthcare industry continues to expand in Omaha, as it is a regional destination for many in the Great Plains, with Alegent Healthcare being the largest private employer in Omaha.

Hotel owners in Omaha certainly aren’t immune to the downturn, but the numbers continue to show it is a hidden gem…..


Whole Omaha Market

Period

ADR

Occupancy

RevPar

RevPar Change

YTD

$87.49

56.6%

$49.55

3.2%

3-Month

$91.71

63.9%

$58.57

5.0%

12-Month

$83.81

54.9%

$46.00

-7.8%

*Source-June 2010 STR report, 10,887 room sample

 Smith Travel Research reported year to date performance for the U.S. hotel industry has had RevPar increase 2.3%.  Omaha has outperformed the national average by 39% in obtaining an increase of 3.2%


Suburban Omaha Market

Period

ADR

Occupancy

RevPar

RevPar Change

YTD

$80.59

49.2%

$39.62

2.9%

3-Month

$84.73

56.9%

$48.22

5.2%

12-Month

$77.13

47.2%

$36.39

-8.2%

*Source-June 2010 STR report, 6,032 room sample


Omaha CBD/Council Bluffs Market

Period

ADR

Occupancy

RevPar

RevPar Change

YTD

$93.68

65.6%

$61.46

3.4%

3-Month

$98.29

72.2%

$70.99

4.5%

12-Month

$89.71

64.2%

$57.55

-7.5%

*Source-June 2010 STR report, 6,032 room sample


The substantial redevelopment in downtown Omaha has helped hotel owners immensely.  Following the national trend, Omaha is an example of central business districts continuing to outperform the suburbs.

HVS President and founder Steve Rushmore presented at the 2010 NYU conference this summer in New York City.  The most recognized hotel consulting and services organization had some jaw dropping statistics that included Omaha.

Average Annual Compounded Growth in Property Value: 1987-2015

Rank

1.  Miami          10.2%
2.  New York    9.3%
3.  Austin           9.2%
4.  Omaha        9.1%
5.  Houston       7.0%
6.  Las Vegas    6.8%
7.  Denver         6.6%
8.  Fort Lauderdale  6.2%
9.  Oahu          6.0%
10. New Orleans  5.8%
United States  overall   4.7%
CPI: 1987-2015    3.0%

Markets That Exceeded the Dow: 1987-2006 % Change

1987-2006

Dow Jones    543%
Miami       918%
Austin     744%
Omaha      740%
New York City    658%
Las Vegas      554%


Warmbrodt Hotel Investments is currently working on several projects in the Omaha market.  We would be happy to discuss the opportunities available in Omaha.  Please call WHI at 913 381 3737 or email zane@whikc.com or  herb@whikc.com

.

Contact:

HOTEL REAL ESTATE
HOTEL BROKERAGE
HOTEL INVESTMENTS

Warmbrodt Hotel Investments
2020 West 89th Street, Suite 320
Leawood, KS 66206  T: 913-381-3737
F: 913-381-6767
E: info@whikc.com
www.warmbrodthotels.com


.


Hilton Omaha to Undergo $35 Million Expansion; Project to Include 150 New Guest Rooms, a Second Ballroom / June 2010
Omaha Holiday Inn Convention Center Rebrands to CoCo Key Water Resort-Hotel & Convention Center, Omaha / August 2010

.

To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.