KCRag Forum

^And leisure travel is already recovering well considering still in pandemic mode. It's degree of lucrative biz related travel return that is in question. Even before COVID I was traveling less for work in 2010s than 2000s because I was able to accomplish more in virtual web meetings more efficiently than onsite travel visits as the tools got better. I still traveled often but probably cut in half for work, most of 2010's travel was 'work from anywhere' on my own as digital nomad - often staying at family/friends rather than hotels. The tools are even better now than last decade.

Downtown needs to focus on live events with regional draw as competition for convention/meetings will probably be tough long after pandemic mode, especially now that just about every city competes in that space. Wasn't the case 30+ years ago. Probably relatively more realistic to draw more consumer/leisure/fan attended events than biz events in near term.

https://str.com/press-release/us-hotel- ... -from-peak

US Avg occupancy improving to around 60% however some hotels still closed (skewing what the occupancy means) and the bulk are leisure and interstate hotels. Most downtowns likely below 60% still. AirBNB a factor too as listings down about 10% compared to 2019.
https://str.com/press-release/str-us-ho ... -9-october

KC might still see a lot of hotel construction but might not be a major net increase in supply, rather possibly offsetted by older/undesirable properties that re-purpose to something else.

It might be time to convert the Aladdin into apartments. Has anyone heard anything about the outcome of the auction in June?

^Haven't heard but given MAC's experience converting this class of older hotel to apts they'd be a good fit. Don't think they'd expand much beyond their investment along Armour corridor though.

Grand is becoming hotel row. Another project in the works......

Embassy Suites
Canopy Hilton
AC Rialto
Unnamed

Ambassador (completed)

^Must be new, not listed yet in this pipeline report...
https://www.nmrk.com/storage-nmrk/uploa ... s-City.pdf

earthling wrote: ↑Wed Oct 20, 2021 9:14 pm ^Must be new,

yes it is

normalthings wrote: ↑Wed Oct 20, 2021 8:25 pm Grand is becoming hotel row. Another project in the works......

Embassy Suites
Canopy Hilton
AC Rialto
Unnamed

Ambassador (completed)

Whatever happened to the Canopy Hotel? Looks like no progress has been made on it for a long time.

Interesting piece on state of hotels in Chicago..
https://therealdeal.com/issues_articles ... ng-hotels/

Hotel occupancy in downtown Chicago was 53.6 percent in the month ending mid-September, a drop from 82 percent from the same period in 2019, according to data tracking firm STR.
...
Growing convention competition
“Conventions getting smaller and using less floor space means there’s more complications for Chicago,” said Ted Mandigo, a hotel analyst in Chicago. “Conventions that were held in Las Vegas, Chicago or Orlando could be held in Nashville, Tennessee, or Denver, Colorado. Competition has gotten stronger, and uncertainty has impacted the market.” Mandigo expects that even when conventions resume full-scale, they will be down 10 percent because of competitive factors.

Weird I thought they were all going virtual. Not quite the case of he is calling for only a 10% drop

^Mentions impact of just competition, not other factors - less space needed every year and virtual improving every year. And that's Chicago hit, KC could be impacted harder. Haven't heard any claims of any going all virtual but that over time it will have an impact as it improves. Every report I've seen about virtual is that it will continue to some degree in parallel, the question is to what degree over time. I've attended both and prefer virtual in this scenario if structured right... 1) Lookup all sessions I want to 'attend' online' 2) Review the full session slides 3) If not getting enough from slides, watch the session leader video. 4) Join the forum for the session, ask questions and collaborate with others in online forum (some may be phpBB/kcrag like, can last over a week to permanent depending on how structured). Can attend many more sessions in a day with this method and able to have well thought out longer/detailed conversations, potentially all sessions if really wanting to. In tech conferences I rarely get anything of value out of the vendor displays that I can't learn online. Vendors have been cutting back with displays over the years before COVID given they can market better online. The cost for attendance is just price of admission - no travel/hotel/food budget burned.

Virtual is more efficient use of my time than attending live if setup properly depending on type of content. And for convention content this isn't suited for, would prefer to attend live. It will get better over time. The more conferences I go to in a year, the more burnout and fine with virtual if structured right. Not claiming it will have significant impact, just that there is a realistic opportunity some day as method matures. It's still in nascent 1.0 phase.

So competition with more cities up to 10% hit, less space each year up to 10% hit, virtual hybrid up to 10% hit over time and maybe more if it becomes broadly doable. Overall 10%-30% biz travel hit seems like a realistic range over next 10 years, especially given conventions were cutting back before COVID. The PE investment group I'm engaged in has been shifting from hotels since pandemic to storage units and several other industries with less uncertainty and better 10 year big picture upside. Managed by Harvard MBAs, they view hotel industry as the most uncertain over 10 years of all other major established industries. OTOH, AirBNB was thought to impact hotel industry as it matured. So not suggesting this will happen, rather higher chance harder hit than other established industries long term.

wish we had the leadership and drive to do this

https://www.wthr.com/article/money/busi ... b40e193ff7

Indy approved a $550 million convention center expansion and two massive hotel towers (1400+ rooms). Equal to two Loews Hotels almost. This is on-top of the 1,000+ room Marriott they built in 2011.

Approved during the pandemic!



https://media.tegna-media.com/assets/WT ... 0x1080.png

These look great. Are they fully financed now? Don't think they were when announced. KC's is recent enough but had its chance to do a bigger better looking Lowes. Competition between cities for conferences will apparently be tight going forward.

CBRE Q3 National hotel report. Interstate hotels doing well with leisure road travel, urban hotels not so great especially in cities more dependent on biz travel/conferences/events and not surprising airport hotels second slowest recovery...






https://www.cbre.com/insights/figures/q ... el-figures

Downtown Marriott sold for apparently a steep discount. The trend with hotel investors lately has been seeking large hotels dumping at deep discounts rather than investing in new construction, at least relatively moreso in urban areas with slow recovery.

https://www.bizjournals.com/kansascity/ ... hline.html

US hotel occupancy as of Jan 8, about 45%. There are still thousands of hotels closed so average occupancy would be lower than shown if no closures. Or put another way, demand not as high as it appears relative to pre-covid. Is still likely downtown hotels doing worse than Interstate hotels and heavy biz travel markets doing worse than leisure travel destinations. Typically full service hotels need about 60% avg annual occupancy to break even unless running on a skeleton crew and/or fewer services. Some hotels are actually raising rates to offset, some have to drop rates beyond the normal seasonal cycles.

Haven't seen KC market numbers since Q2 last year.


https://str.com/press-release/str-us-ho ... -8-january

earthling wrote: ↑Wed Jan 19, 2022 10:30 am There are still thousands of hotels closed

Where is this data? I don't disagree I'm just interested in the #s. Also how many have decided to cease operations versus still planning to reopen.

Isn't occupancy normally lower this time of year though? Hotels need 60% yearly occupancy to break even. But, they normally are fully booked in the summer with vacation travel which makes up for lower percentages in February, March, etc.

This "expert" says the break even wa 47% pre pandemic

In 2020, the break-even occupancy for the average full-service hotel dropped from 47% to 30%

https://www.costar.com/article/23042169 ... ancy-ratio

The conversations I heard for hotels deciding to stay closed or open up during the darkest times was like 10%. Obviously that's just anacodeal and each hotel/owner is different.