Hotel Overbuilding?

[earthling]

Newmark Q2 report for KC and Midwest. KC metro occupancy is just over 50%. Was about 60%-65% before pandemic IIRC, but the revenues per room are healthier than US avg due to higher rates and most are probably profiting with reduced staff as well.

KC's pipeline reduced a bit since last report but is still the second highest in the Midwest behind Chicago. Over 30 hotels expected to open with an actual target date, however it still shows Hotel Bravo, which is dead so may not be an accurate list. Claims Hyatt House downtown target to open Q4/2023 (in the last report there was no target date). Over 25 more hotels proposed beyond anticipated openings.

Despite recent hotel openings total stock is down about 500 rooms since last peak (currently a little over 35K rooms in metro), implying that more hotel rooms are closed than opening since last peak. STL down about 1000 rooms since last peak despite recent hotel openings.

https://www.nmrk.com/storage-nmrk/uploa ... eports.pdf

[AlkaliAxel]

Newmark Q2 report for KC and Midwest. KC metro occupancy is just over 50%. Was about 60%-65% before pandemic IIRC, but the revenues per room are healthier than US avg due to higher rates and most are probably profiting with reduced staff as well.

KC's pipeline reduced a bit since last report but is still the second highest in the Midwest behind Chicago. Over 30 hotels expected to open with an actual target date, however it still shows Hotel Bravo, which is dead so may not be an accurate list. Claims Hyatt House downtown target to open Q4/2023 (in the last report there was no target date). Over 25 more hotels proposed beyond anticipated openings.

Despite recent hotel openings total stock is down about 500 rooms since last peak (currently a little over 35K rooms in metro), implying that more hotel rooms are closed than opening since last peak. STL down about 1000 rooms since last peak despite recent hotel openings.

https://www.nmrk.com/storage-nmrk/uploa ... eports.pdf

Is that why Hyatt is back in the pipeline now?

[earthling]

Given still lower than normal occupancy and apparently more hotel rooms closing than opening since pandemic it's impressive if Hyatt House and others are moving forward.

What we might see is new hotels still coming at the expense of dated ones closing, so not much if any net growth in metro supply for a while. Hard to say but wouldn't be surprising if this happens. Hotels are figuring out how to profit while hyper lean (less staff) so some in early planning stage may go for it.

A private independent hotel operator (under Marriott flag) I'm invested in is profiting beyond expectations thanks to reduced staff and higher room rate, but not sure how long the former can last. Recent reviews are pointing out the minimal staff.

[Link2]

Newmark Q2 report for KC and Midwest. KC metro occupancy is just over 50%. Was about 60%-65% before pandemic IIRC, but the revenues per room are healthier than US avg due to higher rates and most are probably profiting with reduced staff as well.

KC's pipeline reduced a bit since last report but is still the second highest in the Midwest behind Chicago. Over 30 hotels expected to open with an actual target date, however it still shows Hotel Bravo, which is dead so may not be an accurate list. Claims Hyatt House downtown target to open Q4/2023 (in the last report there was no target date). Over 25 more hotels proposed beyond anticipated openings.

Despite recent hotel openings total stock is down about 500 rooms since last peak (currently a little over 35K rooms in metro), implying that more hotel rooms are closed than opening since last peak. STL down about 1000 rooms since last peak despite recent hotel openings.

https://www.nmrk.com/storage-nmrk/uploa ... eports.pdf

Spoke with the developer behind Hyatt House project two weeks ago. He fully intends to move forward with the project in the near-term, and is trying to finalize revised financing right now.

Also -- I know it's hard to believe -- but Hotel Bravo isn't dead.

[AlkaliAxel]

Given still lower than normal occupancy and apparently more hotel rooms closing than opening since pandemic it's impressive if Hyatt House and others are moving forward.

Probably World Cup then if there's no other reason for it

[earthling]

^Not THE reason but if the numbers look good for a proposal and developer is on the fence, WC might nudge some to go for it.

[earthling]

Spoke with the developer behind Hyatt House project two weeks ago. He fully intends to move forward with the project in the near-term, and is trying to finalize revised financing right now.

Also -- I know it's hard to believe -- but Hotel Bravo isn't dead.

Curious still in financing stage as Dodge Data claims the project is in sub-bidding, construction phase. A reminder that we need to take any single source with a grain of salt, especially with reports/data that promote the industry.

[AlkaliAxel]

Spoke with the developer behind Hyatt House project two weeks ago. He fully intends to move forward with the project in the near-term, and is trying to finalize revised financing right now.

Also -- I know it's hard to believe -- but Hotel Bravo isn't dead.

Curious still in financing stage as Dodge Data claims the project is in sub-bidding, construction phase. A reminder that we need to take any single source with a grain of salt, especially with reports/data that promote the industry.

Yes, but Link2 has been very reliable in the past. He's like the DCole of hotels.

[earthling]

Yes I'm skeptical of the other reports, not Link2. I'm seeing a lot of shilling going on and a lot more key errors in reports than normal. I found a notable error in the Newmark link too after posting it. KC's hotel occupancy might be a bit better than posted.

A PE investment group I'm engaged in tries not to rely too much on feasibility studies provided in proposals seeking investors, so we look at such public CRE agency studies too as another source to loosely consider, but the quality of agency studies seem to be not as good as it used to be. I look for where multiple agree. If no consensus, then consider worst case scenario in the range as that source is less likely shilling.

[AlkaliAxel]

Newmark Q2 report for KC and Midwest. KC metro occupancy is just over 50%. Was about 60%-65% before pandemic IIRC, but the revenues per room are healthier than US avg due to higher rates and most are probably profiting with reduced staff as well.

KC's pipeline reduced a bit since last report but is still the second highest in the Midwest behind Chicago. Over 30 hotels expected to open with an actual target date, however it still shows Hotel Bravo, which is dead so may not be an accurate list. Claims Hyatt House downtown target to open Q4/2023 (in the last report there was no target date). Over 25 more hotels proposed beyond anticipated openings.

Despite recent hotel openings total stock is down about 500 rooms since last peak (currently a little over 35K rooms in metro), implying that more hotel rooms are closed than opening since last peak. STL down about 1000 rooms since last peak despite recent hotel openings.

https://www.nmrk.com/storage-nmrk/uploa ... eports.pdf

Spoke with the developer behind Hyatt House project two weeks ago. He fully intends to move forward with the project in the near-term, and is trying to finalize revised financing right now.

Also -- I know it's hard to believe -- but Hotel Bravo isn't dead.

When do you think they'll start again?

[Link2]

Newmark Q2 report for KC and Midwest. KC metro occupancy is just over 50%. Was about 60%-65% before pandemic IIRC, but the revenues per room are healthier than US avg due to higher rates and most are probably profiting with reduced staff as well.

KC's pipeline reduced a bit since last report but is still the second highest in the Midwest behind Chicago. Over 30 hotels expected to open with an actual target date, however it still shows Hotel Bravo, which is dead so may not be an accurate list. Claims Hyatt House downtown target to open Q4/2023 (in the last report there was no target date). Over 25 more hotels proposed beyond anticipated openings.

Despite recent hotel openings total stock is down about 500 rooms since last peak (currently a little over 35K rooms in metro), implying that more hotel rooms are closed than opening since last peak. STL down about 1000 rooms since last peak despite recent hotel openings.

https://www.nmrk.com/storage-nmrk/uploa ... eports.pdf

Spoke with the developer behind Hyatt House project two weeks ago. He fully intends to move forward with the project in the near-term, and is trying to finalize revised financing right now.

Also -- I know it's hard to believe -- but Hotel Bravo isn't dead.

When do you think they'll start again?

The contact mentioned he has no concrete timeline at this point on either construction resumption or anticipated opening.

[earthling]

Nationally comparing hotel occupancy to 2019 the gap is recently widening. There was about 4 point gap in April and reduced to near 2 point gap around July 4 holiday, but now there's a 6 point gap. That is occupancy is recently trending away from recovery according to Kalibri Labs. STR shows gap around 4 points now with 2 points in July so agrees with trending away from recovery.

[earthling]

Here's an update on the hotel revenue projection for 2022 per market, which breaks down by biz and leisure travel. KC projected to do well with leisure growth since 2019 (18% growth) and projected to be only about 2.5% down for biz travel. Several markets still struggling with over 20% down with biz travel compared to 2019. San Fran poor leisure travel as well.

https://www.ahla.com/sites/default/file ... .14.22.pdf

[earthling]

Haven't posted stats in a while. Here's Q3 Newmark Midwest hotel report. KC metro occupancy not too bad near 60%, about same as Midwest avg. RevPAR a bit lower than Midwest avg but improving better than avg. KC pipeline list shrunk some but still has second most hotels in development/proposed of Midwest (behind Chicago). Curious that list has been culled some but still shows Bravo project.

https://www.nmrk.com/storage-nmrk/uploa ... eports.pdf

[Cratedigger]

Haven't posted stats in a while. Here's Q3 Newmark Midwest hotel report. KC metro occupancy not too bad near 60%, about same as Midwest avg. RevPAR a bit lower than Midwest avg but improving better than avg. KC pipeline list shrunk some but still has second most hotels in development/proposed of Midwest (behind Chicago). Curious that list has been culled some but still shows Bravo project.

https://www.nmrk.com/storage-nmrk/uploa ... eports.pdf

Thank you, always look forward to the stats and seeing the trends

[FangKC]

I hope the Palace Clothing Company and former Federal Reserve building renovations get underway soon. I hate seeing them sitting there vacant.

[langosta]

I was booking our summer vacation when I came across this on the Omni hotels website. Image is from 2022 based on the link and the other information on that page.

[FangKC]

I wonder if the hotel at 14th and Wyandotte is going to be an Omni.

[missingkc]

Just a question, because I don't know: would Omni be happy with 200 rooms?

[langosta]

Just a question, because I don't know: would Omni be happy with 200 rooms?

Might make some sense if you lump in managed residential.