Omni Hotels earlier this month joined with Kempinski Hotels and Resorts, Pan Pacific Hotels and Resorts, and Rydges Hotels and Resorts in the Global Hotel Alliance—an association of midsize, similar-minded hoteliers seeking to compete with the larger hotel chains for customers by combining forces. Each hotel will look to not only advance its brand identity through GHA, but also drum up business for each of its partners in the alliance.
"The principle of the alliance is to enable small to midsize brands to compete more effectively with the mega chains," said Chris Hartley, CEO of the Global Hotel Alliance and former senior vice president of sales and marketing for Kempinski. "We want to cover all those regions that are meaningful to travelers so they have a global choice of hotel accommodations in any of the significant markets." The GHA was formed in 2004 with Kempinski, Pan Pacific, Rydges and Wyndham Hotels and Resorts as original members. Omni replaced Wyndham once Cendant Corp. acquired it back in October. Hartley said Wyndham no longer fit the "profile and philosophy" of the alliance after the transaction.
The alliance also allows travel buyers with global programs to conduct a single negotiation for all four suppliers' inventory, thus streamlining the process
(BTNonline, March 15, 2004).With a hotel base almost solely in North America, Omni decided to partner with hotel companies from other world regions as a way to market its brand abroad without necessarily having a sales or marketing presence there. It's an endeavor that Tom Chevins, senior vice president of sales and marketing for Omni, said will increase the breadth of Omni's reach. "First and foremost, we've always looked at a way to extend our brand message to parts of the world that we really don't have covered from a sales and marketing perspective," he said. "The GHA allows us to do that by assembling like-minded companies to represent the other members where they don't have a presence."
GHA provides each hotel company a presence in four major world regions—something that such larger hotel companies as Hilton and Marriott already enjoy. Kempinski is represented well throughout Europe, Pan Pacific throughout Asia and Rydges has a large presence in Australia and New Zealand. "What we provide members of the alliance is economies of scale. We are able to reduce burgeoning distribution costs and generally improve the technology used, which is prohibitively expensive if you are a smaller brand," said Hartley. "We expect to drive additional revenues by effectively using each other's sales networks and contracting new deals with new partners."
With the Omni brand prevalent in most U.S. gateway cities, GHA hopes the regional combination will benefit all parties. "Omni is not a household name in Australia, like Hilton or Marriott," Chevins said. "We see this type of arrangement as a way to gain a greater foothold in some of these markets."
The steady increase of business travel in the United States and abroad has made it an opportune moment for a midsize chain, such as Omni, to ensure that its brand is recognized. Omni is at a disadvantage when seeking the business of international business travelers because many have never heard of the Omni brand. It is the job of GHA to increase each member's exposure.
"I see the biggest benefit being a scenario in which you have a Kempinski sales person speaking to some company in Switzerland, and he or she can bring to that company a portfolio of options and say, 'Here's what we can do for you in the U.S. with Omni Hotels,' " said Chevins. Or vice versa: "When we're talking to a corporate travel manager and he or she asks us what we can do for them in Sydney or Tokyo, in the past our answer was, 'We can't do anything.' Now, our plan is to offer up our partners for their corporate travel programs. It will drive both ways."
Already the alliance has provided dividends for Omni. "One of the regional sales offices of one of the brands caught wind that we were close to joining the alliance and started sending leads to some of our hotels," said Chevins. "In a period of three weeks, we accumulated in the neighborhood of 3,000 to 4,000 room nights because they had customers going to the United States. That brand didn't have any product here but we do."