United States -  Omaha

Since 2010, RevPAR levels in the Omaha metropolitan area have illustrated steady growth, initially driven by occupancy growth and, more recently, by ADR increases. With ADR levels nearing $100, new development projects have surged, and new supply levels have surpassed demand increases in the last three years. This trend is expected to continue through 2017, with hotel revenue growth being driven primarily by ADR increases.

Redevelopment efforts in the downtown area are revitalizing the heart of the city, while other ongoing developments throughout the greater metropolitan area are contributing to growth, as well. The $205-million Capitol District, which includes over 250,000 square feet of new office and entertainment space, is expected to generate additional hotel business upon its completion in 2017. Kiewit Corporation is the driving force behind "The Yard" downtown mixed-use development, which will house the company's 62,000-square-foot training and education offices when completed in 2017. In Midtown, NuStyle is spearheading the $110-million redevelopment of the Creighton University Medical Center into a 750-unit apartment complex, while the Nebraska Medical Center is expanding with the opening of the Fred and Pamela Buffett Cancer Center in May 2017. Despite the loss of the ConAgra World Headquarters, which relocated to Chicago in late 2016, local activity in the market should continue to increase, supporting the hotel demand growth projected.

Roughly 750 new guestrooms were added to the total hotel supply between the second quarter of 2016 and the second quarter of 2017, which easily surpasses the amount of annual new supply added since 2009. Most of these properties can be found in the growing western part of the city, and only two of new hotels feature more than 100 guestrooms (the 121-room Courtyard by Marriott Bellevue and the 132-room EVEN Hotel). We are currently tracking twelve proposed projects that represent approximately 1,750 rooms, although we note that some of the more speculative and complex projects may take several years to come to fruition, if at all. Unlike the hotel projects that were completed in 2016, many of the proposed projects are larger and located in Downtown Omaha. The most visible project is the 333-room Marriott hotel, which is under construction near the downtown convention center. This hotel is scheduled to open as part of a large mixed-use development in the summer of 2017.

The pace of local transactions remained somewhat subdued in 2016, a continuation of the trend from recent years, as many property owners in the region have taken a buy/build-and-hold approach. A transaction highlight in 2016 is the second-quarter sale of the Fairfield Inn & Suites by Marriott Omaha West, which sold for over $110,000 per guestroom.

* 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%

Omaha RevPAR Change

Omaha RevPAR

Year RevPAR
2006 $51.55
2007 $53.63
2008 $54.29
2009 $45.08
2010 $46.40
2011 $47.25
2012 $51.82
2013 $54.65
2014 $56.42
2015 $57.29
2016 $57.69
2017 (f) $58.53
2018 (f) $60.73
2019 (f) $63.17

For more information, please contact:

Sara Olson, MAI
solson@hvs.com
  • +1 402 690-0407 (w)