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HVS In-Depth United States Hotel Valuation Index:
The Omaha metropolitan area had its ninth consecutive year of RevPAR growth in 2018, driven by a strong increase in area demand, but tempered somewhat by a decline in ADR. The revitalization of the Downtown submarket continues, as new projects in the residential and office sectors have been announced or have begun, including the redevelopment of the Gene Leahy Mall and the former ConAgra Headquarters riverfront campus. Farther west in the city, hotel demand is also growing within submarkets along the Dodge Street corridor, as well as near the UNO/Aksarben neighborhood. In 2019, RevPAR is forecast to decline, concurrent with an expected slow convention calendar and the opening of additional new hotel supply in the market.
Current city administration and local developers are focusing on redevelopment projects in the heart of Downtown Omaha. The riverfront office headquarters site that was partially vacated by ConAgra in 2016 is in the initial stages of a $500-million redevelopment by Hines that will transform the site into a mixed-use office, residential, hotel, and retail complex and will open the downtown area to the riverfront. Concurrently, the City is redeveloping the Gene Leahy Mall; this $300-million project broke ground in the first quarter of 2019 and is expected to be completed in 2021. Immediately north of the CBD neighborhood, Kiewit plans to build its new global headquarters in an area dubbed the Builder's District. The new, 200,000-square-foot headquarters will be located at 15th and Mike Fahey Streets and should be completed in 2021. In central Omaha, the 500-acre Heartwood Preserve redevelopment site has broken ground; in early 2019, Carson Group announced plans to build a new, $50-million headquarters (with office space for nearly 2,000 employees) on the site. LinkedIn and HDR also moved into new office space in western Omaha in 2018, driving demand in those submarkets. According to the Omaha CVB, demand levels in 2019 are expected to somewhat weaken, primarily attributed to a slower convention calendar and rising hotel supply levels; however, large city projects support more optimistic long-term demand growth and market strength.
Compared to 2017, when over 600 guestrooms opened in the market, supply growth in 2018 was less significant. Only two new hotel properties, totaling approximately 250 guestrooms, opened in the metropolitan area during 2018. During the first quarter of 2019, two additional hotels opened within the Downtown Omaha submarket. Moreover, HVS is currently tracking approximately 15 proposed projects (totaling roughly 1,800 guestrooms) that are in various stages of development. We note that some of the more speculative and complex projects may take several years to come to fruition, if at all. Many of the proposed hotels are planned for Downtown Omaha.
The pace of local transactions remained somewhat subdued in 2018, a continuation of the trend from recent years, as many property owners in the region have taken a buy/build-and-hold approach. The majority of the sales in the metro area in 2018 involved limited- and select-service properties that transacted for less than $75,000 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.
The widespread impact of the coronavirus (COVID-19) has had an unprecedented impact on hotels and hotel values worldwide.
Consequently, the latest HVI analysis may no longer reflect the most current measure of lodging industry strength or the
hospitality investment market.
In each of our offices across the globe, we are working tirelessly to analyze the impact of recent events and provide timely
insights to help you navigate these uncharted waters. Because it is unclear how long the pandemic will last or how long related
restrictions will be in place, we are updating our analyses on a weekly basis using the most current data.
Additionally, examination of value trends in prior cycles can provide useful information. Historical patterns, together with
an understanding of the market’s current expectations for the eventual recovery of the industry and its performance, can provide
insights on the likely trajectory of decline and recovery for hotel values.
For the Latest Information and Analysis on the Impact of COVID-19Click Here
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ADR, Demand, Occupancy, RevPAR, and Supply Projections:
|Market Demand Change
|Hotel Occupancy Increase/Decrease
|Market Supply Growth