United States -  Kansas City

Between 2010 and 2017, the Kansas City market illustrated strong RevPAR growth; this was initially driven primarily by occupancy increases, but in recent years, average rate has become the largest factor contributing to hotel revenue growth. ADR growth surpassed national averages in 2015 and 2016. Occupancy levels reached a historical high in 2015, as occupancy topped 65% for the first time in the last decade. These record occupancy levels and strong ADR growth patterns have resulted in significant new hotel development, particularly in the Central Business District and Crossroads neighborhoods. Despite the introduction of new supply in 2017, occupancy continued to grow and average rate registered a healthy improvement, resulting in a healthy RevPAR increase, The metro area’s diversified economy continues to illustrate steady growth and declining unemployment levels that are below national averages.

Kansas City’s diversified economy, with strong cornerstones in the manufacturing, logistics, healthcare, and government sectors, is amid steady expansion. Furthermore, the city is home to seven Fortune 1000 company headquarters, five of which are located within the downtown core, including H&R Block, DST Systems, Great Plains Incorporated, and Kansas City Southern. The strength and diversity of the economic base should provide a solid basis for continuing demand growth in coming years. The addition of a new, 800-room convention center hotel in the downtown core neighborhood is also expected to induce new meeting and group business in the market, attracting larger conventions and meetings that Kansas City has historically been unable to accommodate.

Since 2016, the pace of hotel development and supply growth has increased, with a majority of the new properties located in Downtown Kansas City and nearby neighborhoods, as well as Johnson County Kansas. Ongoing development activity has continued to accelerate, with over fifteen projects expected to open in 2018 and 2019. The largest project in the pipeline is the proposed 800-room Lowes Convention Center hotel, which is under construction in the Crossroads neighborhood, directly south of the Kansas City Central Business District. After several years of delays, the convention center hotel project is now expected to open in the second quarter of 2020. Going forward, supply growth is expected to outpace demand growth in the near term, resulting in modestly lower occupancy levels.

Transaction activity in the greater Kansas City metropolitan area was strong in 2017, with approximately 15 closed sales. The bulk of the transactions occurred in the limited-service and select-service segments. The sale of the Courtyard by Marriott Country Club Plaza hotel in June 2017, for approximately $24,500,000, or nearly $200,000 per guestroom, represented the largest sale of the year; we note that the transaction was part of a larger portfolio of assets. Investor interest continues to be positive; however, some market participants are concerned about new supply, and are waiting to witness the impact it has on market occupancy.

* Although the HVI cannot tell you what a particular hotel is worth, it does provide excellent “big picture” data, indicating which market areas are experiencing positive trends, and thus may present good investment opportunities. The HVI for the U.S. is a measure of the strength of the lodging industry as a whole and, specifically, the hospitality investment market. The HVI for the various identified markets can provide a basis to evaluate and compare different geographic regions. For more insight on the limitations and applicability of the HVI, please read the message on the HVI home page by clicking on the graphic at the top of this page.

Change In Value For Market:

Legend
Significant Value Increase: Greater than +10%
Moderate Value Increase: Between +3% and +10%
Stable Values: Between -3% and +3%
Moderate Value Decline: Between -3% and -10%
Significant Value Decline: Less than -10%

Kansas City RevPAR Change

Kansas City RevPAR

Year RevPAR
2007 50.81
2008 49.65
2009 42.90
2010 44.69
2011 46.55
2012 48.48
2013 50.89
2014 56.87
2015 61.42
2016 64.53
2017 68.89
2018 (f) 70.59
2019 (f) 72.34
2020 (f) 74.14

For more information, please contact:

Daniel McCoy, MAI
[email protected]
  • +1 970 215-0620 (w)
Sara Olson, MAI
[email protected]
  • +1 402 690-0407 (w)