United States -  Kansas City

Between 2010 and 2016, 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. 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.

In 2016 and the first quarter of 2017, roughly 675 new guestrooms opened in the metro area, with a little over half of these rooms located in Downtown Kansas City. Ongoing development activity is strong, as roughly 25 additional new hotels have been proposed, totaling over 4,000 new guestrooms. The largest project in the pipeline is the proposed 800-room Hyatt Regency Convention Center hotel, which is planned for a location in the Crossroads neighborhood, directly south of the Kansas City Central Business District. After several years of delays, the convention center hotel project received final City Council approval in late April 2017; it is expected to break ground later in the year, with an anticipated opening date of late 2019 or early 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 increased in 2016, with the bulk of the transactions occurring in the limited-service segment. The sale of the Aloft Leawood Overland Park hotel in December 2016, for $22,500,000, or $144,231 per guestroom, represented the largest single-asset sale in the last twelve months. 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
2006 $48.26
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 (f) $66.93
2018 (f) $69.27
2019 (f) $71.35

For more information, please contact:

Daniel McCoy, MAI
DMcCoy@hvs.com
  • +1 970 215-0620 (w)
Sara Olson, MAI
solson@hvs.com
  • +1 402 690-0407 (w)