Interview: Omni Hotels & Resorts Vice President Of Sales Tom Faust

Omni Hotels & Resorts in the past year grew its portfolio by record levels, boosted largely by last summer's acquisition of five resorts from KSL Capital Partners, the 2013 acquisition of a historic Toronto hotel and the completed construction of a convention hotel in Nashville. Omni vice president of sales Tom Faust spoke recently with Business Travel News lodging editor Michael B. Baker about those new properties as well as how the company is adjusting its relationships with corporate clients amid current levels of high occupancy in key cities.

BTN: How is corporate transient business running at Omni?

Every month has shown good growth in volume and rate. You're starting to see more growth in rate than you will in occupancy, because of availability. You can grow occupancy only so much; it's a finite resource. We have to work with our partners on shifts from [last-room availability] to non-LRA or into dynamic pricing. Whereas maybe in the past they were not viewed very favorably, now hotel companies and corporate travelers have to make decisions about what's most important to them. If availability is most important, there is a price that needs to be captured with that. If there's more flexibility, maybe non-LRA or dynamic pricing is a better solution. Those conversations ebb and flow with market demand, and now, demand is high and supply is slow to catch up, particularly in the full-service segment.

Are you seeing more accounts accept dynamic pricing agreements?

We do. If you're looking to maximize availability, the best solution is going to be LRA. If you're trying to maximize the savings, the best solution is non-LRA, because you'll get the best price but the least amount of availability. Dynamic pricing is the best of both worlds. You'll maximize your availability, because you'll get it when [best available rate] is available—and that's nearly always available—and your savings will go as the availability of the hotel goes. In lower-demand periods, your pricing is lower, and in higher-demand periods, it will be higher. There's a solution for everybody, and that's what we talk to our team about: making sure you understand what the client's needs are and offering the best solution for them.

What about group business?

Business travel has been strong and continues to recover in terms of both volume and price. Group was lagging that curve, but because of the contracting lead time, group went soft slower, and it seems like group recovers slower than business travel as well. It just takes longer for that segment to recover, but we're seeing strong recovery there as well.

How much of it is corporate group versus association business?

Cities like San Francisco, Chicago, New Orleans and Atlanta have long been strong association cities and continue to be, and there are new cities. Nashville has become a huge destination, a lot because of our new hotel and the convention center, where they have the facilities to do it now—and Dallas, because of our new hotel at the convention center. The associations tend to every year do what they do, and they're more predictable. A lot of the growth we're seeing in the corporate segment, and they don't do the same thing every year. We're also seeing growth in incentives. Part of that is our acquisition of six new resorts, so we're seeing an uptick in that market as well.

How have those new resorts fit into the Omni portfolio?

You've got La Costa in Carlsbad, Calif., Grove Park Inn in Asheville, N.C.; the Omni Barton Creek in Austin, Texas; Rancho Las Palmas in Palm Springs; and the Omni Homestead in Hot Springs, Va. Immediately after that, we acquired the Omni King Edward in Toronto, which is downtown in the heart of the financial district. In late September, we opened Omni Nashville, which was 800 rooms and 80,000 square feet of space, across the street from the 1.2-million-sq.-ft. Music City Center, the new convention center. In early January, we acquired the Omni Scottsdale Resort at Montelucia, a spectacular resort at the foot of Camelback Mountain. At the same time, we reopened Omni Amelia Island [Fla.] Plantation Resort in April 2013, after a $90 million reimagining that included about 150 additional guest rooms and 20,000 square feet of meeting space. All the resorts are doing very well. The change to having the brand and global sales force supporting them made a significant difference.

Does Omni plan to continue to grow at that pace?

We added nine hotels last year, which is the most we've ever added in the history of our company. Our growth is going to be situational. We're not a public company, so we don't have to grow. We're going to look at where it really fits the brand and is a strategic location for us. These resorts from KSL were a perfect fit, as was the King Edward. They're iconic resorts and properties that reflect the local color of the region that they're in. We'll continue to look for those things and in those markets where we'd like to have additional representation. We could have additional hotels in Chicago, San Francisco, Los Angeles and New York—those are all markets that would support multiple Omnis.

Have you added to your sales team as a result of that growth?

We've added in the last year people on the group side, and one on the leisure side of global sales, the first leisure global sales person we've had.

What is Omni's participation in the Global Hotel Alliance bringing to its business?

[GHA] continues to grow, and we continue to add more brands. As a matter of fact, we added a couple brands here recently [Oslo-based Thon Hotels and Helsinki-based GLO Hotels]. Those brands are like ours, in that they're well-known regionally but less so internationally, so it's given us a tool to compete effectively with the large multinational brands. You have this loyalty program that joins all the global hotel alliance hotels, and travelers in Europe now want to stay at Global Hotel Alliance hotels in North America and vice versa. Omni travelers want to choose Kempinski in Europe, Pan Pacific in Asia or Rydges in Australia because of the loyalty program. It's also given us a global sales force around the world. We have people in London and global sellers in New York who are selling the whole global hotel alliance, and that allows us to participate with other brands and interact with customers, and through the GHA referral system, we can refer business across the [22] member brands. As a result, we've also increased our travel management company partnerships in most cases from regional to global programs, and we've seen a pretty significant uptick in international inbound-U.S. stays in our hotels.