April 6, 2015
Cindy Gonzalez, Associated Press
Still days from opening its doors, the new midtown Hampton Inn Aksarben is almost sold out for the Berkshire Hathaway shareholders convention.
Farther south along the 72nd Street corridor, the recently constructed Ralston Holiday Inn Express is three-quarters booked that weekend.
Yet another suburban hotel built this past year is about half full, and its general manager is bracing for an April rush to take it to the brim.
“Our phone will ring right off the hook,” said Blair Riffel of the Fairfield Inn & Suites in Papillion. “There’ll be that mad scurry at the end.”
Those fresh-to-the-market businesses aren’t even near downtown Omaha, where virtually all brand-name hotel beds are called for on May 1 and 2 as tens of thousands of Berkies make the annual trek to the CenturyLink Center to soak in sage advice from Berkshire Chairman and CEO Warren Buffett and Vice Chairman Charlie Munger.
With this year being the 50th year since Buffett took control of Berkshire, and the stars of the show not getting any younger, many area hotels are reporting greater-than-usual lodging interest in the already wildly popular spectacle expected to last longer this year and draw a record crowd of 40,000 or more.
Berkshire’s extravaganza, along with national sports tournaments and robust business travel that dot other times of the year, continues to bolster the Omaha-area hospitality industry overall — leading investors to add about 750 new or totally renovated hotel rooms to the market since just last May.
That’s an inventory gain greater than any of the past five years, according to the Omaha Convention and Visitors Bureau, which bases its figures on reports from national data tracker STR Inc.
And several hundred more hotel rooms are in the pipeline, the Omaha World-Herald reports.
When the Berkshire throng converges, the three-county area is expected to have about 14,700 hotel rooms in Douglas, Sarpy and Pottawattamie Counties — more than a 5 percent increase over the prior May.
“That’s a pretty good jump,” said STR’s Bobby Bowers, senior vice president of operations.
Demand has increased as well. Guests slept 2.98 million nights in Omaha last year, compared with 2.91 million in 2013, 2.86 million in 2012, 2.76 million in 2011 and 2.64 million in 2010.
Rates, too, generally are on the upswing. The average Omaha room rented last year for $93.47, compared with $89.78 the year before.
While hoteliers welcome the tourism activity underlying a hotel boom, they’re wary, and some are a bit stressed that increasing competition threatens their piece of the pie. Private home options such as Airbnb, which has been promoted by Buffett, also grab a share.
“We can hold those nights during the College World Series and Berkshire,” Riffel said. “My fear is, can the city maintain that in September, October and November?”
With his 98-room Marriott prototype being Papillion’s first hotel, and new since October, Riffel has less to fret about. Still, competition has sales staffs throughout the Omaha area beefing up marketing outreach to the base business they rely on for more typical nights.
For the Fairfield, that includes federal defense contractors and other guests related to Offutt and area construction projects. For Ralston’s 83-room Holiday Inn Express, it can be hockey fans, youth athletic groups and others that take advantage of the city arena next door.
Indeed, most of Omaha’s newest hoteliers are building near a particular business development or arena project as opposed to downtown, which draws bigger conventions, said Cathy Keller, director of sales for the Omaha Convention and Visitors Bureau.
“The supply coming on to the market is not really full-service,” Keller said. “They’re smaller, 80 to 120 rooms. Once again, it’s due to development.”
The Aksarben area’s Hampton Inn and Residence Inn, for instance, have positioned themselves to reap the rewards of recent midtown growth, yet also pick up overflow tourism from downtown events.
Newer west Omaha hotels, including Home2 Suites, Residence Inn and Hampton Inn — hotels that were finished in the past year — are conveniently located for corporate visitors doing business in the Village Pointe area and along the West Dodge corridor.
Of course, turning investors’ eyes in the first place to the Omaha area, Keller said, is a “national buzz” about the area, its low unemployment rate and attractions.
Keller said that 10 years ago, she’d go to trade shows and spend most of her time hailing potential clients and explaining where Omaha was on the map. Today, she’s meeting with interested people who already have set up appointments to see her.
Mike Vlassakis, general manager at the Ralston Holiday Inn Express, said he’s worked with event organizers who were won over by the community’s reception, volunteers and relatively low costs. Hockey promoters, he said, find that a Midwestern venue attracts a higher number of teams. “We’re right smack in the middle.”
A newcomer himself, Sandy Buonanni, said his biggest surprise upon taking the general manager job at the downtown Doubletree by Hilton was the strength of the local economy.
“Companies doing well, a lot of movers and shakers, that drives revenue,” said Buonanni, who moved from Indianapolis.
Omaha’s year-round hotel occupancy, however, did dip slightly for the first time in five years, to 60.4 percent from 60.9 in 2013. Bower of STR attributed that to the added supply and competition in the market.
Nationally, he said, the occupancy rate is 64.4 percent.
Bower noted that overall in the Omaha area, hotel reservations still increased, fueled by such national events as the NCAA basketball tournament in late March. According to convention officials, demand for Omaha hotels went up 48 percent Thursday through Saturday of the event, compared with the previous year when Omaha was not a host.
Compared with 2012, when the same preliminary rounds were in Omaha, the city this year booked 2,000 more rooms on each of the Thursday, Friday and Saturday nights.
Berkshire weekend outshines other events, with occupancy rising to about 94 percent among Omaha hotels last year, according to the conventions bureau, and 96 percent the year before.
Already this year, online reservation centers show virtually all downtown hotel rooms booked for May 1 and 2. (Most require a two-night stay that weekend.)
That goes for the 600-room Hilton Omaha — sold out within two weeks of making those dates available — and the 89-room boutique Hotel Deco XV, which has seen a greater interest for stays that stretch Thursday through Sunday.
Gordon Humbert, general manager of the downtown Hilton, said the 50th anniversary most likely prompted his full house to come earlier than usual this year.
Sara Clausen, general manager at Hotel Deco, said two different groups called to add Thursday to their blocks of reservations that typically are for Friday and Saturday nights.
Hotels outside downtown Omaha, despite the drive from the CenturyLink Berkshire hub, are preparing for a rush.
Angie Velardi, director of sales at the Ralston and Papillion hotels, said guests loyal to the hotel brands are eager to check out the latest properties, but newcomers also have reserved rooms for Berkshire. Demand is such, she said, that most area hotels are able to at least double their rates that weekend.
Travis Kuhlman is general manager of the 179-room Doubletree by Hilton that is to open April 2 at 72nd Street and Interstate 80 after a two-year renovation. He said about 40 percent of the hotel’s rooms for May 1 and 2 were booked within a week of being placed on the market a week ago.
Greg Coleman, general manager of the Hampton Inn Aksarben, said the hotel also timed its opening to be a few weeks ahead of the shareholders meeting so kinks can be ironed out.
Interest was obvious, he said, as his first block of rooms was snatched up as soon as they were put online.
“We put another 30 out there, and they went just as fast,” he said. “It should be a good weekend.”
Berkshire Hathaway CEO Warren Buffett expects a record 40,000-plus crowd at this year’s shareholders meeting because he’s celebrating the 50th year since he took control of Berkshire, a former New England textile company, and turned it into his investment vehicle.
Because so many attendees are from out of town, Omaha’s hotel room supply may come up short for the weekend around the May 2 meeting. To ease the crunch and supply competition, Buffett is encouraging Omahans to register as hosts with Airbnb, an online company that matches visitors with people who have open rooms.
Two weeks ago, Buffett said about 400 Omaha hosts have booked Airbnb guests. His assistant, Debbie Bosanek, said Monday that since then, the number has “increased somewhat but not dramatically.”
Attendance at the meeting is still uncertain, but the number of mailed requests for meeting credentials is “very considerably ahead” of past years, Bosanek said, although it’s hard to interpret early mailed responses as showing how many people will attend the meeting.