At some of those rates maybe I need to offer my bedroom in the basement. Two night minimum stay - free parking
Demand exceeding supply can be a fine thing for a business, Warren Buffett knows, but it seems to him that some hotels in Omaha are taking advantage of the shareholders who come for Berkshire Hathaway's annual meeting.
The issue has the billionaire CEO musing about shareholder suggestions that next year's meeting be held in Dallas, although he promises that won't happen.
Sort of a tough situation for Omaha. We obviously need more hotel rooms for events like BH meeting, CWS and Swim Trials, but that list needs to be about ten items long to make a huge hotel gain reasonable. Does a new 350 room hotel secure us more large conventions so our DT hotels aren't so reliant on these massive weekends?
It is crazy though, how much more the hotels are. For a city the size of Omaha, they have a good amount of supply overall. You can't just build 1,000's of hotel rooms because the rest of the year the occupancy rates would suffer. As the story states, Omaha has done a good job of adding to market of rooms since 2007, adding around 1,250 rooms in the past 6-7 years.
skinzfan23 wrote:It is crazy though, how much more the hotels are. For a city the size of Omaha, they have a good amount of supply overall. You can't just build 1,000's of hotel rooms because the rest of the year the occupancy rates would suffer. As the story states, Omaha has done a good job of adding to market of rooms since 2007, adding around 1,250 rooms in the past 6-7 years.
If you think about how many hotels are u/c right now or announced we could be adding another 1000 in the next couple years. A bunch of mid level brands out west, Bellevue has a good sized hotel in the works, downtown is still possible to get another 350.
Almost a little surprising Lincoln hotels don't get together and offer a charter bus or something for cheeper rates that weekend.
My advice to the Berkshire Hathaway folks would be to go ahead and pay the high prices. The hotels around this town have filled up significantly over the past few years with local riff raff. Better to stay in the high end places where its much safer.
I'd take care of my shareholders over my commitment to Omaha. If Omaha wants grossly exceed industry standard hotel rates because of demand, then I'd say fine, I'm taking my business to a bigger market who doesn't take advantage of supply/demand deficits.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
The point is that Dallas isn't going to be exceedingly cheesed up about a shareholders convention. A lot goes on in Dallas, and the rooms will be available at a fair price.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
Exactly. That's why I would throw my shareholders a bone, and send them to a city with affordable flights, and reasonably priced accommodations.
It's simple. Warren doesn't owe Omaha jack |expletive|.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
I am probably massively skewed in my thinking, but I don't think it is nearly the large scale event it is now if it is in Dallas. Their arena is 2 miles from their convention center so there goes the part of the meeting where you wander from the event floor to the arena to see them speak. No Borsheims, no fawning over by the entire city, the Texas NFM is 25 miles from Downtown Dallas. Plus a LOT of the share holders at the current meeting come from Omaha/Nebraska, do they travel to Dallas for it?
Obviously Dallas is a much grander and better event city than Omaha, but I truly think the event became what it is because Omaha is a different experience than the rest of the massive US cities. Maybe I am a homer.
Agreed. Dallas would really have to augment the event with Berkshire companies, and reinvent it. I'm sure they'd find a way, but no, it wouldn't be the same event.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
In the big scheme of things, the new 1.5 million sf NFM warehouse/store is a small drop in the bucket for Berkshire. Not worth moving the annual meeting to Dallas. There are too many references to little, innocent, modest, Omaha during their meeting to ever move it. the location is part of the allure & mystique.
I hate gauging as much as anybody, but it's hard to feel sorry for people who are otherwise very well-off.
He said "They are some big, ugly red brick buildings" ...and then they were gone.
You would be surprised how many attend the meeting who have Berkshire shares and are otherwise completely financially average. Many others, you get modest wealthy, many who commit to long term investment and probably do not appreciate being raked over the coals by Omaha hotels.
The event would never be the same, no doubt, but that doesn't mean it can't be moved if Omaha can't provide fair accommodations.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
Sorry about this, as I must have to chime in from the hotel perspective. If I sold my rooms at $150 a pop on that weekend, I'd be fired immediately. Hotels are sold out years in advance because of the insane demand, why drop the price when there are thousands of people just waiting to pay the higher rates? Let's put it another way: let's call the downtown hotels "Class A" hotels, and those in the suburbs and other areas "Class B" hotels. If you cannot afford "Class A" accommodations, there is always the "Class B" option. Someone who runs a company with shares of stock that are $180,000 a piece sounds strange complaining that hotel rooms are over $300 a night downtown. Also, as a comparison, the Cornhusker hotel in Lincoln is selling their rooms at $309 a night for the Miami / Nebraska game, why is no one up in arms over that?
I'd clarify that nobody seems to be "up in arms," and I also don't think there should be laws against "price-gouging" for discretionary expenses, or anything other than basic necessities, medical, utilities, etc.
But, if I were some big shot executive who was hosting a sharholders meeting where tens of thousands of people travel to "little ol' Omaha," and, suddenly, the accommodations quadrupled in price , I wouldn't hesitate to find a better market. It's simple, and it's not personal against the local hotels. Gorats and Borsheims are cute, but certainly not critical for the convention.
As far as the Nebraska Miami game... well, they can't exactly relocate the game.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
Working in the hotel industry where I have more than 300 hotels in 11 countries, this is not uncommon even the large cities to jack up their prices. If someone truly wanted a lower prices there are plenty of hotels with a lower price point. I have some hotels that shoot from a normal $150 rate to 500 to 1000 in high demand days. The prices in Omaha aren't bad at all. It is probably a few people wanting to stay at the Hilton for a nominal price. Unless a convention is being hosted exclusive at a hotel with convention space the prices will be higher as they cannot recoup extra money from banquet/catering/or food and beverage.
S33 wrote:As far as the Nebraska Miami game... well, they can't exactly relocate the game.
I was just using that as an example of how concentrated demand will drive price. This is routine for hotel prices during extremely high demand periods - for example, there are no Hilton branded hotels within 50 miles of Phoenix that have rooms under $300 for the weekend of the Super Bowl. I understand that is an extreme example on a much bigger scale, but the economics behind it are the same. Why should Berkshire be different?
S33 wrote:As far as the Nebraska Miami game... well, they can't exactly relocate the game.
I was just using that as an example of how concentrated demand will drive price. This is routine for hotel prices during extremely high demand periods - for example, there are no Hilton branded hotels within 50 miles of Phoenix that have rooms under $300 for the weekend of the Super Bowl. I understand that is an extreme example on a much bigger scale, but the economics behind it are the same. Why should Berkshire be different?
I don't think its surprising that a hotel would take advantage of high demand. However, if an event wants to try and move to avoid a rate issue, they are free to. Some events, once planned, arent moving but you have to be careful with something that you benefit from year after year that you don't cook the golden goose.
Uffda wrote:At some of those rates maybe I need to offer my bedroom in the basement. Two night minimum stay - free parking
Demand exceeding supply can be a fine thing for a business, Warren Buffett knows, but it seems to him that some hotels in Omaha are taking advantage of the shareholders who come for Berkshire Hathaway's annual meeting.
The issue has the billionaire CEO musing about shareholder suggestions that next year's meeting be held in Dallas, although he promises that won't happen.
Moving it to the MetroPlex, you could really have them spread out. Some of those hotels would be worse than staying in Lincoln between distance and especially time.
I had no idea so many of the attendees were clamoring to get out of Omaha.
Greg
Last edited by Greg S on Fri Apr 11, 2014 2:27 pm, edited 1 time in total.
There are probably more hotels in the Dallas downtown area than in all of the Omaha metro. Larger cities do a far better job supporting conventions this size, because their accommodations are built to support it.
Would it be sad to see the shareholders meeting moved? You bet. But after a year in Dallas, nobody will miss Omaha. Berkshire's portfolio is huge, and I'm sure there are plenty of Dallas-area companies to represent Berkshire.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
The startup, founded in 2008, has become a popular way for travelers to find cheap rooms and homeowners to make some money by renting out their extra rooms. Although Airbnb already is operational in Omaha, their presence is small and not many people in the city are familiar with the website.
Berkshire is in discussions with Airbnb to see if the two could partner to offer a large block of rooms for the 2015 annual meeting. Airbnb has popped up around events such as the SxSW festival in Austin last month, where over 11,000 people stayed in Airbnb-listed accommodation, according to Airbnb spokeswoman Marissa Coughlin.
“Events are a great way to spur interest in hosting on Airbnb,” Ms. Coughlin said. She added that the company plans to “activate our community to get the word out about the needs” for the annual Berkshire meeting.
The startup, founded in 2008, has become a popular way for travelers to find cheap rooms and homeowners to make some money by renting out their extra rooms. Although Airbnb already is operational in Omaha, their presence is small and not many people in the city are familiar with the website.
Berkshire is in discussions with Airbnb to see if the two could partner to offer a large block of rooms for the 2015 annual meeting. Airbnb has popped up around events such as the SxSW festival in Austin last month, where over 11,000 people stayed in Airbnb-listed accommodation, according to Airbnb spokeswoman Marissa Coughlin.
“Events are a great way to spur interest in hosting on Airbnb,” Ms. Coughlin said. She added that the company plans to “activate our community to get the word out about the needs” for the annual Berkshire meeting.
My kids' families have used "Airbnb" several times, and always liked it a lot.
iamjacobm wrote:Interesting possible solution. I had never heard of this Airbnb business before.
I used it in Tampa at two different places the first part of January 2013. Both experiences were good.
The biggest part of offering it to Berkshire people is you have to have enough private people opening up their homes for renters. Also don't know if AirBnB would allow them to just open at that time or they would have to be open year round. https://www.airbnb.com" onclick="window.open(this.href);return false;
Can't blame them for looking elsewhere. I've been getting ready for a move to the Denver area. The city had a nice little run. But it's a temporary blip and the bubble is about to burst.
A friend of mine said he was paid 10K for the entire CWS week in his old market condo. Not sure if it was affiliated with that organization, but I think if the demand is there, definitely worth a shot.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
You have to do what is best for your shareholders and your business. Like S33 said, Buffett doesn't owe Omaha anything. If the best place for the convention is in Dallas or some other market, what fool would not move it? It almost feels like charity if he keeps it here 'despite' what is good for Berkshire. Almost seems shameful lol
The paper today was talking about Bershire stockholders staying at the Relax Inn on 60th and L today. Nowhere did it mention that people have been robbed at that hotel and that a man was shot and killed there last year. They also did not mention that bed bugs were found at that hotel a couple of years ago. Staying at the Relax Inn is not an option if you ask me.
GRANDPASMUCKER wrote:The paper today was talking about Bershire stockholders staying at the Relax Inn on 60th and L today. Nowhere did it mention that people have been robbed at that hotel and that a man was shot and killed there last year. They also did not mention that bed bugs were found at that hotel a couple of years ago. Staying at the Relax Inn is not an option if you ask me.
It's not that bad. It's where I bring my hookers.
Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery. - Winston Churchill
