Hotel Overbuilding?

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STLguy1
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Re: Hotel Overbuilding?

Post by STLguy1 »

I don't think "overbuilding" on the food, bar and entertainment scene is a bad thing for a local stand point. If we overbuild our hotel availability and brands begin to pull out or not build new, then saturation is a bad thing in room sales for the future.

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Re: Hotel Overbuilding?

Post by KCPowercat »

Someone had to say STL.

horizons82
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Re: Hotel Overbuilding?

Post by horizons82 »

**pretends to be shocked** The Star has an editorial deriding anymore hotels receiving incentives in the core.

https://www.kansascity.com/opinion/edit ... 59769.html

I'm sure they feel the same way about Lenexa or Lee's Summit subsidizing hotels...

The most bizarre point is at the end when they use a new Omni in Dallas as the example of a "hotel arms race" that KC will lose. Glad they believe in the metro and have a firm grasp of what tiers KC & Dallas are competing in. /s

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Re: Hotel Overbuilding?

Post by normalthings »

horizons82 wrote:
Sun Apr 21, 2019 11:14 am
**pretends to be shocked** The Star has an editorial deriding anymore hotels receiving incentives in the core.

https://www.kansascity.com/opinion/edit ... 59769.html

I'm sure they feel the same way about Lenexa or Lee's Summit subsidizing hotels...

The most bizarre point is at the end when they use a new Omni in Dallas as the example of a "hotel arms race" that KC will lose. Glad they believe in the metro and have a firm grasp of what tiers KC & Dallas are competing in. /s
“Huge recepient of downtown incentives shames others for receiving smaller amounts of incentives.”

alejandro46
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Re: Hotel Overbuilding?

Post by alejandro46 »

Glad we are not in an arms race for newspaper quality. Another unfounded opinion piece with no stats, data, or metrics to back it up.

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Re: Hotel Overbuilding?

Post by earthling »

Anyone know the recent approx occupancy rate for hotel rooms downtown?

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Re: Hotel Overbuilding?

Post by earthling »

Found this through Aug 2018. Looks like the opening of hotels over time did drop the overall occupancy Q1-2/2018 from Q1-2/2017. But hard to say as there could have been fewer events too in 2018.

https://dashboards.mysidewalk.com/state ... st#c-56788

Image

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normalthings
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Re: Hotel Overbuilding?

Post by normalthings »

earthling wrote:
Sun Nov 17, 2019 12:13 pm
Found this through Aug 2018. Looks like the opening of hotels over time did drop the overall occupancy Q1-2/2018 from Q1-2/2017. But hard to say as there could have been fewer events too in 2018.

https://dashboards.mysidewalk.com/state ... st#c-56788

Image
In 2017, Kansas City was host to multiple big one off events.

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Re: Hotel Overbuilding?

Post by flyingember »

Downtown hotels

Marriot 983
Crowne Plaza 388
President 121
Philips 217
Holiday Inn Aladdin 193
Westin Crown Center 724
Sheraton Crown Center 733
Comfort Inn and Suites 110
Fairfield inn 115
Savoy 120
Ambassador 113
1524 Main Courtyard + Residence 257
Hampton Inn Gumbel Bldg 70
Hampton Inn 16th/Main: 132
Hilton Home2 115
Indigo Loop 113
Indigo Crossroads 80
Pabst/Pendergast Crossroads Hotel 125
HI Express (Interstate Bldg, 417 E 13th) 76

Loews 800
24th/Troost 90
Federal Reserve 301
Hayatt House 153
KC Club 114
Palace Building Canopy 110

Riverfront Hotel 120
Hotel Bravo 300
Scarritt Wyndham Grans 193
Cambria 9th/Wyandotte 149



Visit KC shows 14 facilities spread across the city with space for over 11,000 people
Sprint Center holds 19,000
The entire Bartle Hall complex has 37 spaces that can hold 77,300 people.
And the new convention hotel is adding more space.

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normalthings
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Re: Hotel Overbuilding?

Post by normalthings »

Per a KCBJ report from earlier this month.
Last year around this time, hotels on the Country Club Plaza were about 75% to 85% full, Joyce said.
75%-85% full during the dead of winter sounds like great news to me. Those are strong occupancy rates during the lowest traffic period of one of the worst winters in memory. I think there is a clear disconnect forming between the success and vacancy rates of urban hotels and of suburban ones.

earthling
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Re: Hotel Overbuilding?

Post by earthling »

That's typical for Plaza during holiday season and the lights. But also good that it's not impacted with so many rooms that have come online downtown. Mentioned before I'm privately invested in hotels (independent operator for Marriott) and found it interesting that hotel operations can typically profit with around 65% occupancy and potentially below 60% if many outsiders use the hotel services, such as residential/hotel combos and outsiders eating at bars/restaurants.

Can't imagine Plaza will get more hotels anytime soon but Midtown could probably handle a few more contemporary economy hotels. Would think investors will wait for downtown occupancy numbers to hash out over next year with so many coming online soon before anymore are announced (beyond 4 Light possibility). If I were investing in a downtown hotel, at this point would only be interested in hotel/residential combos.

Given that the city core has last few decades had fewer rooms compared to metro relative to other markets, the shift is probably just correcting itself. Metro room count might stay about same but older suburban hotels that aren't worth upgrading may convert to something else while the city gets more of the new hotel share.

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Re: Hotel Overbuilding?

Post by flyingember »

normalthings wrote:
Wed Feb 26, 2020 2:44 am
Per a KCBJ report from earlier this month.
Last year around this time, hotels on the Country Club Plaza were about 75% to 85% full, Joyce said.
75%-85% full during the dead of winter sounds like great news to me. Those are strong occupancy rates during the lowest traffic period of one of the worst winters in memory. I think there is a clear disconnect forming between the success and vacancy rates of urban hotels and of suburban ones.
I think you're looking the wrong direction. A hotel isn't going to be vague with the timeframe and report that they can't fill rooms at the same time. That would imply they aren't affordable for travelers.

"Around this time" could include the Big 12 tournament. It was only three weeks away on the calendar a year ago.

I think there's no disconnect in success rates in terms of geography. It more comes down to the price point of the hotels themselves and suburban hotels will remain a healthy market. Look at how many line I-29 between the airport and Barry Rd. There's effectively nothing else around and they remain open.

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Re: Hotel Overbuilding?

Post by flyingember »

earthling wrote:
Wed Feb 26, 2020 7:23 am
Can't imagine Plaza will get more hotels anytime soon but Midtown could probably handle a few more contemporary economy hotels. Would think investors will wait for downtown occupancy numbers to hash out over next year with so many coming online soon before anymore are announced (beyond 4 Light possibility). If I were investing in a downtown hotel, at this point would only be interested in hotel/residential combos.
This was a little less than a year ago. A proposal for two new hotels on the plaza. I haven't seen any updates but it shows there's developers that feel differently

https://www.kshb.com/news/local-news/pl ... strictions

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Re: Hotel Overbuilding?

Post by dukuboy1 »

That plan for the Plaza Hotel(s) is moving forward. I work for Commerce Bank and used to office in the Plaza branch. They are in process of creating new drive through lanes in the small parking garage just North of the main branch now. I believe the current branch location up the hill on Wornall will be torn down and then they build on top of that. I think there is plans for a garage, access via street level and then the building on top. Might be some retail at the street level as well. I also think garage will accommodate spaces for Commerce clients & employees as the surface lots to the Northwest were owned by Commerce and now will be developed.

earthling
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Re: Hotel Overbuilding?

Post by earthling »

Yeah, was meaning more Plaza hotels beyond those approved. Ditto with 4 Light if they go hotel. Risk increases for investors with any more hotels until the occupancy #s hash out over next year or so. So many rooms coming online at once. Even VisitKC (convention bureau) is concerned there are too many at once.

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Re: Hotel Overbuilding?

Post by DaveKCMO »

The Plaza doesn't need drive through banking. It's 2020.

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Re: Hotel Overbuilding?

Post by DaveKCMO »

earthling wrote:
Wed Feb 26, 2020 11:30 am
Even VisitKC (convention bureau) is concerned there are too many at once.
Wasn't their concern pretty specific to the city subsidizing too many new hotels?

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Re: Hotel Overbuilding?

Post by earthling »

Yeah subsidizing not needed because of so much stock coming online. They would likely welcome if underbuilt or if occupancy healthy. But what could hurt convention planning is a couple hotels or so not making it. And of course if many operate under 60% for a long period because of too much stock (edit: and forced to reduce room rates significantly), the independently operated ones may not make it. The corporate operated ones can absorb it but many major flags can be run by independent operators (I'm invested in one).

Long term downtown could add more as suburban ones phase out and/or market grows but maybe time to take a breather. The River Market one could maybe work now given several aspects that reduce risk - only hotel in RM likely long term, directly on streetcar stop, mixed-use and if they design to convert to residential if needed would reduce risk as well for the builder. I'd consider investing in that one. Maybe not yet but at some point.
Last edited by earthling on Fri Feb 28, 2020 11:00 am, edited 1 time in total.

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Re: Hotel Overbuilding?

Post by dukuboy1 »

DaveKCMO wrote:
Wed Feb 26, 2020 9:43 pm
The Plaza doesn't need drive through banking. It's 2020.
Commerce uses that as a selling point against the competition. Look at every branch Commerce has in town. They have drive through service, and 99% are open on SAT. Some of this is to appease their "lifer clients" some of it is because a lack of technology investment to get away from it. But they offer it and people love it. I think the only branch location in town that does not have drive through is Walnut Lobby downtown.

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