Omni Hotels & Resorts keys in on local market leadership

DALLAS—Anyone up late enough on weekends to watch NBC’s Saturday Night Live in its early days always knew where they could find the celebrities who peppered the New York City show. The late Don Pardo announced at the end of every broadcast that accommodations were provided by Berkshire Place, A Dunfey Classic Hotel.

More than four decades later, SNL is still on the air and the BP, now the Omni Berkshire Place, is marking its 90th year at Madison Ave. and 52 St.

The hotel serves as the Big Apple flagship for Omni Hotels & Resorts, which this year marks its own milestone: its twentieth year since it was acquired by Dallas, TX-based TRT Holdings, Inc., which is led by CEO Robert Rowling.

Mike Deitemeyer Omni Hotels & Resorts

According to Omni’s president since 2004, Mike Deitemeyer, who was TRT’s SVP/finance at the time of the 1996 acquisition, the company now has 60 hotels, the majority that it owns and operates, and it just crossed $2 billion in revenue, $850 million of it non-rooms.

“A lot of what we’re doing is golf, spa, it’s 180-odd F&B outlets, retail components. We’re a lot bigger,” said Deitemeyer, characterizing the North American chain as positioned between upper-upscale and luxury.

It’s a far cry from the portfolio TRT Holdings picked up two decades ago, acquiring Omni Hotels’ 35 U.S. hotels and management contracts, franchise agreements on other hotels, and rights to the Omni Hotels brand name worldwide (excluding Asia-Pacific). Rowling appointed himself chairman, named James Caldwell president (Caldwell is now CEO/Omni Hotels Management Corp.), put a new senior management team into place and embarked on multimillion-dollar property renovations and implementation of a capital improvements program that included new technology and revenue and property management systems.

“When we bought the brand, the brand was probably 75% rooms revenue and it’s just changed tremendously,” said Deitemeyer.

The same could be said for Omni itself, which has its roots in New England. The Dunfey family founded the company in 1958, opening the 35-room Lamie’s Motor Inn in Hampton, NH. Six years later, Dunfey Hotels began franchising Sheratons, becoming the brand’s largest franchisee at the time with 14 hotels. In 1969, it acquired the historic (1855) Parker House (of rolls fame) in Boston.

A year later, Dunfey Hotels affiliated with the Aetna Life & Casualty Co. and in 1976 the company was acquired by Aer Lingus, Ireland’s national airline.

The company continued to make significant purchases during the next decade—Chicago’s Ambassador East Hotel, NYC’s Berkshire Place, Washington, DC’s Shoreham Hotel—and in 1983, acquired Omni International Hotels, changing the corporate name to Omni Hotels.

In the late 1980s, as a wave of Japanese investment began washing over the U.S., many hotels were targets. In 1988, Omni Hotels was acquired by World International Holdings, Ltd. and its associate, Wharf Holdings Ltd. of Hong Kong. Marco Polo International Hotels, owned by World and Wharf, were renamed Omni Hotels Asia Pacific, creating an international hotel marketing entity under the Omni Hotels brand.

That same year, the brand made its foray into Mexico with the Omni Cancun Hotel.

Additional acquisitions followed along with an expansion to the West Coast (Omni Los Angeles) prior to the TRT acquisition.

According to Deitemeyer, TRT in 1995 was a small management company with eight owned hotels and was at a crossroads to figuratively go big or go away, and the Omni hotel group held appeal.

“Omni was on the market at the time. We thought it was a very broken company. There were 35 Omnis (eight owned), a handful managed, the balance were franchises. We liked the owned real estate; it had good bones. We saw an opportunity there to reflag the hotels we had and thought it would be a platform to invest in hospitality,” said Deitemeyer, adding, “Our model is to own these assets. It’s a legacy business for the [Rowling] family.”

Peter Strebel Omni Hotels & Resorts

With more and more brands emerging, the fact that Omni is privately held is an advantage, felt Peter Strebel, chief marketing officer and SVP/sales. “As a point of difference the private-ownership mentality is huge. Even on the sales and marketing side, when I walk into a customer, a meeting planner and I talk about it, they love that feature. They’ve all been burned by flag changes, burned by XYZ company managing today and ABC company managing tomorrow. Our ownership model and the strength of our balance sheet is a great thing that differentiates us,” said Strebel, noting the company culture also allows the company and its hotels to stand out.

According to Deitemeyer, Omni was pioneering in its efforts to bring authenticity to the guest experience, making it a priority as early as 2005.

“Culturally and organizationally we’ve done a lot in regard to training our teams, understanding how important local market leadership is, uniqueness, authenticity; that has evolved into who we are today,” said the executive. “At Omni, we have no one room type, no one product. Everything is designed with the local market top of mind. It is really about how can we, for people coming into our hotels, [give them]a taste and flavor of the community. I think we execute that pretty well.” (Omni has been ranked highest among upper-upscale hotel brands six times by J.D. Power & Associates’ North American Hotel Guest Satisfaction Index Study.)

“Ten years ago this brand was talking about local flavor, local color and experiential travel, which is now kind of what all the brands are talking about,” said Strebel.  “If you go to some of our newer properties that have opened since then—Dallas/Fort Worth, Nashville, you’ll notice there’s a massive difference when we talk about local flavor, local color.”

For example, the 854-key Omni Nashville, across from the Music City Center is integrated into the expanded Country Hall of Fame and Museum and features a general store selling local goods. “Col. Littleton is a leather purveyor in that state and he’s created a custom line of belts and bags, wallets, etc., just for us. It’s a destination retail store,” said Strebel.

“It becomes part of the experience we’re curating for our customers,” added Deitemeyer.

Similarly, Omni has broken ground in Louisville, KY, for a 612-room hotel, a public/private partnership project that also will feature 225 luxury rental apartments above the hotel.

“Part of our commitment with the city is it wanted a grocery store on the block. Our commitment was to build out a white-box, 20,000-sq.-ft. grocery store. We’re creating—ourselves—an Eataly meets Chelsea Market meets Whole Foods kind of thing…it’s really how do you bring the community into the space? It’s what we’re focusing on,” said Deitemeyer.

Strebel, who served in executive positions in operations, sales and marketing at Omni from 1988 to 2001, left for Wyndham Hotel Group (where he subsequently was promoted to president), came back in 2009 as area managing director and GM of Omni Berkshire Place. He said Omni’s acquisition in 2013 of five luxury resorts from KSL Capital Partners, LLC, shifted the existing guest demographic “quite a bit.”

Today, well-educated Baby Boomers with household incomes of $250,000 or more make up about 50% of Omni’s guest mix, according to the CMO. The next largest segment? “Millennials,” said Strebel. “They like these hotels; there’s lots of socialization space.”

Omni has a joint project under way in Frisco, TX with The Dallas Cowboys, with a hotel slated to open in 2017 as part of a mixed-use development.

Deitemeyer said as a single brand Omni gets inquiries if it’s gong to do an extension or launch a new “boutique/lifestyle” brand to further accommodate Millennials. “We like the space we operate in…and they love our new product,” said Deitemeyer.

In addition to the Louisville project, Omni has a 50/50 joint project under way in Frisco, TX, this one with the Dallas Cowboys, with the city playing a role as well. The hotel, slated to open in 2017, is part of a mixed-use development that will be anchored by the Cowboys’ World Headquarters and Frisco’s Multi-Use Event Center.

In Cobb County, GA, Omni is under construction with a hotel in a 50/50 JV with the Atlanta Braves baseball team. “Our hotel will look into the ball park in their new mixed-use development, which is about 70 acres,” he said.

“We currently have (at press time) four others (public/private projects) that we’re in various stages of negotiation that we’re trying to get over the finish line,” he added. “What’s interesting right now is we are fairly active on the construction side; there’s eight construction projects and a few of those will be announced in the not-too-distant future.”

Deitemeyer said although the company takes debt occasionally, “We typically build them out of Omni cash flow…we’re typically looking at debt product only upon stabilization or completion of assets.”

Omni has two hotels open in Montreal and Toronto, Canada and two in Mexico: Cancun and Puerto Aventuras.

“We do own some land in the Punta Mita area of Mexico, and at some point we’ll build a hotel there. We have looked at international projects [but]our investment strategy today is North America,” said Deitemeyer.

Omni also is a part owner of the Global Hotel Alliancean based in Dubai.

“We run loyalty for 26 other brands—small brands or brands that have regional expertise in similar quality brands,” said Deitemeyer. Members include Pan Pacific, Doyle, Marco Polo and Leela Palaces, Hotels and Resorts. “We run loyalty for all of them and distribution for some of them.”

“There’s more than 600 hotels in the collection, and we also do some B2B sales, so we go to market with American Express and four of the top consortia as a global account,” said Strebel.

Overall, said Deitemeyer, “To some degree…we don’t define the brand by capital; we define it by human interaction experientially.” The company expects to enhance getting that message out via a new ad campaign that features the tagline: “Never Stay the Same.”

“It’s all about how travel changes you and when you stay at an Omni, you experience different things that’ll change you for the future,” said Strebel.

As for Omni’s future, Deitemeyer indicated the company intends to stay close to providing customer experience, which he considers evolutionary. “We work hard to understand what our customers are looking for. The success there is what has led to our growth and will continue to lead to our growth. We know, regardless of our size, we can compete and win on any street corner.”

“We’re not about being the biggest kid on the block,” added Strebel.  “We’re going to have smart, strategic growth and protect our formula, which is customer service and experiential travel…customers are looking for less cookie cutter and more differentiation and I think we’re in the right place at the right time.” HB

1958: Company founded by the Dunfey family

1964: Dunfey Hotels obtains Sheraton franchises; becomes largest franchise holder worldwide with 14 properties.

1969: Dunfey Hotels acquires Parker House in Boston.

1970: Dunfey Hotels affiliates with Aetna Life & Casualty Co.

1976: Aer Lingus, Ireland’s national airline, acquires company.

1977: Dunfey Hotels acquires Chicago’s Ambassador East Hotel.

1978: Dunfey Hotels acquires Berkshire Place, New York.

1979: Dunfey Hotels acquires Shoreham Hotel, Washington, DC.

1981: Dunfey Hotels acquires Royal Orleans Hotel, New Orleans.

1983: Dunfey Hotels Corp. acquires Omni International Hotels; reflags its upscale properties as Omni Hotels.

1988: Omni Hotels acquired by World International Holdings Ltd. and Wharf Holdings Ltd. of Hong Kong. Marco Polo International Hotels, owned by World and Wharf, renamed Omni Hotels Asia Pacific, creating international hotel marketing entity under the Omni brand and adds Omni Cancun Hotel, marking entry into Mexico.

1993: Sets construction of  Omni Rosen in Orlando, FL; acquires Chicago Hyatt Regency Suites; renamed Omni Chicago Hotel

1994: Adds the Omni Richardson Hotel in suburban Dallas

1995: Expands to West Coast with the Omni Los Angeles Hotel & Center; Omni Berkshire Place opens following $50-million-plus restoration.

1996: TRT Holdings Inc. acquires Omni Hotels’ 35 U.S. hotels and management contracts, franchise agreements on other hotels, and rights to Omni Hotels’ brand name worldwide, excluding Asia-Pacific. Robert Rowling appoints himself chairman; names James Caldwell president. Opens Omni Royal Crescent Hotel in New Orleans

1997: Relocates corporate office from Corpus Christi to Irving, TX; Implements capital improvements program, including new technology systems, revenue management and PMS. Renovates historic hotels: Omni Shoreham Hotel ($70M), Omni Parker House ($50M) and Omni Ambassador East ($14M); acquires second Mexican franchise: Omni Puerto Aventuras Beach Resort.

1998: Enters Canada with purchase of Le Westin Mont-Royal in Montréal; renames it Hôtel Omni Montréal. Removes adult movies from all properties—first hotel brand to do so.

2000: Assumes management, reflags downtown LA property as Omni Los Angeles Hotel at California Plaza. Announces $100-million expansion via JV with Turner of Omni Hotel at CNN Center in Atlanta, including 593-room, 24-story tower.

2001: Purchases Omni William Penn Hotel, Pittsburgh, PA.

2002: Opens Omni San Francisco Hotel. Teams with JMI Realty to develop luxury hotel in San Diego. Introduces “Get Fit Guestroom” program, allowing  guests to reserve a specially designed room featuring a treadmill, exercise equipment kit and healthful snacks.

2003: Offers free wireless high-speed Internet access in guestrooms and select public spaces at owned and managed hotels in North America. New tower of Omni Hotel at CNN Center  opens.

2004: Omni San Diego Hotel opens next to San Diego Padres’ PETCO Park. Omni Orlando Resort at ChampionsGate opens.

2005: Sells Omni Ambassador East

2006: Opens San Antonio’s Omni La Mansión del Rio, Watermark Hotel & Spa, launches Mokara Spa in Dallas

2009: Opens Omni Fort Worth; adds Omni Bedford Springs Resort, Omni Mount Washington Resort, NH (managed; owned as of 2015)

2010: Opens Omni Amelia Island Plantation Resort Villas

2011: Adds Omni Dallas Hotel, Omni Hilton Head Oceanfront Resort, SC

2013: Acquires, flags five properties from KSL Capital Partners, LLC: Omni Barton Creek Resort & Spa, Omni La Costa Resort & Spa, Omni Rancho Las Palmas Resort & Spa, Omni Homestead Resort and Omni Grove Park Inn; Adds Omni Providence (RI), Omni King Edward Hotel (Toronto); opens new-build Omni Nashville, TN.

2014: Acquires Omni Scottsdale Resort & Spa at Montelucia (AZ) from KSL Capital; Adds Omni Riverfront Hotel, New Orleans.

2015/2016: Announces plans to build Omni Louisville (KY), Omni Frisco (TX) and Omni Battery Park (Atlanta).

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