Omni Prez Builds Biz Profile

By BTN / November 12, 2000

Omni Prez Builds Biz Profile

James Caldwell, president of Omni Hotels, recently spoke with BTN hotel editor Bruce Serlen about the central role the business travel buyer plays in Omni's future.

BTN: As you look to grow your corporate business, what resources are you putting into your national sales effort?

James Caldwell: With 39 hotels, Omni's not a huge company, which means we can focus on some of the smaller, niche accounts. Basically, to qualify as a national account, you have to have the potential to use three Omni Hotels and have about 1,500 room nights a year. In our competitors' scheme of things, that's probably a small account, but it's a good account for us. Then the national business travel team works with the local hotels and they service the account together. All in all, there are about 300 accounts, I would say, on our national account list.

BTN: With RFPs for 2001 now more or less submitted, did you see an increase in the number of electronic RFPs this year?

Caldwell: We have a relationship with an outside provider for electronic RFPs. Consequently, almost all the national account RFPs are done on the computer. There are, however, still some companies out there that want the old fashioned form. But more and more are going electronic. We understand the NBTA hotel committee is working to come up with a revised standard form for 2002. We agree the form needs to be shorter. In fact, we spend the whole fall filling out lots of forms and lots of data. Many questions relate to basic services and amenities. All Omni hotels, for example, have electronic room locks, the latest fire safety equipment and so on. So a lot of the questions are repetitive and time-consuming to answer. Some of these will probably be eliminated.

BTN: Last room availability has become an industry hot button this year. Are you getting many requests for it?

Caldwell: Obviously, the big accounts want LRA and it's very hard to say no. We probably do give LRA in more cases than not. At an account that has huge potential at four or five of our hotels, we'll be asked to give LRA at all our properties, including ones where the account may not bring that many room nights. But we want to make sure the right account is getting the right level of service. After all, we're in the business of saying yes, yet when it comes to LRA, you can't do it for everybody. Consequently, there are some hard choices you have to make.

BTN: What can you offer to accounts that may not have LRA, but need rooms?

Caldwell: We're in the relationship business and we want to have long-term relationships with our customers. As a result, we constantly work with our accounts that may not have LRA, but who call us when they're in a pinch and really need to get in. Even though technically they don't have LRA, we'll help them because, as I say, in the end it's all about relationships.

BTN: What's your opinion on requiring a minimum length of stay to get a reservation midweek in high-demand locations?

Caldwell: Clearly, you want to be in a position to do good business and to create a good business model. But we really restrict minimum length of stay requirements to very unique situations. We don't even do it the first two weeks of December, which is a peak time. Trying to force travelers to stay longer than they need to really isn't what we're all about. The same is true of blackout dates. We minimize that as well. Because, again, if somebody's been giving you business all year long, it's very hard to say to them, "Well, you can't come in on this week."

BTN: Omni is one of the hotel companies investing heavily in data warehousing. Why is that such a priority?

Caldwell: You're right, it's a major commitment here and it's ongoing. We've hired an outside resource to build this warehouse for us and we're probably half way through the process right now. But sharing information is really key to what we're trying to do on a companywide basis. Because all of our hotels are basically owned as opposed to franchised or managed. We have one PMS, which gives us an advantage, but we'd like the system to be really seamless. Right now, for example, if you stay at the Omni Berkshire in New York for three or four days and travel the very next day to our Miami property, it will take a couple of days for the technology to recognize you. The system doesn't yet operate in real time, which is where we want it to be. In other words, if you're already in the system, we'll pick you up at the various properties, but we want to be able to do it instantaneously.

BTN: It sounds like these frequent travelers are quite important to your marketing efforts?

Caldwell: Many travelers actually go from one property to the other. Part of what we'll be able to do with this database is identify those individuals who stay at more than one Omni, how frequently there is this connection between properties and what these connections might be. Right now, we can probably pull that together, but not without great labor and time. If you were a frequent guest in New York and Los Angeles, for example, we'll be able to pin that down and direct certain promotions to you. This approach is also at the heart of our Select Guest loyalty program. Here we've chosen to focus on understanding frequent guests' personal preferences across the whole system and, in that way, provide individual service, rather than simply providing points and miles.

BTN: Is being able to provide folio data electronically an element of this as well?

Caldwell: Certainly, data warehousing will make that possible. Right now, we're actually having conversations with two customers regarding e-folio data, where data would be automatically sent for expense reimbursement. It's something that's just being tested right now, but will be big in the future. It may never be universal, but I do see it for large corporations.

BTN: Where do you see the Internet/intranet going as a way of business travelers booking rooms at the negotiated rate?

Caldwell: As an industry, we're going to have to utilize the Web and e-commerce better. In the future, I can see us developing certain Web pages for certain clients with information they alone require. For example, a key account might use five of our hotels. Why should its travelers have to spend time on our main Web site? We could have a customized Web site for this account with just the five hotels and the information these travelers need to know.

BTN: What kind of technology would you say that business travelers expect today in the guest room? Do you think it ends with high-speed Internet access?

Caldwell: Regarding high speed, we just signed a deal to install a wired solution in all our rooms. We're going to focus first on our larger hotels that do more business-related travel. There'll be a port on every desk in which travelers can plug their Ethernet connection and be instantaneously online. But beyond the hard-wired solution, we're maintaining our flexibility. If the world becomes wireless, we'll be wireless. We're also testing Web TV in a few hotels before rolling it out systemwide. Our commitment is to our guest. It's part of our customer service philosophy. We want to make sure the business traveler sees Omni as a favorable destination for all his or her purposes.

BTN: Two weeks ago, you announced development of a major new resort in Orlando. Do you see your traditional downtown business hotel model changing appreciably?

Caldwell: As it happens, roughly 54 percent of our business comes from business travelers. In fact, about 65 percent of our revenue goes to the American Express card to pay for the business trip.

Looking to the future, growth at Omni will come through whichever avenue we can find it. We expect internal growth through new builds and external growth through acquisitions. We would welcome the opportunity to buy a portfolio or acquire hotels one at a time. In addition to the Orlando property, we also announced a new development this year in downtown San Francisco and an expansion of the Omni in Atlanta. Certainly in today's market, so much of the business is driven to the major gateway destinations. Given that we already have a presence in such cities as New York, Los Angeles, Chicago, New Orleans and Dallas, we'd like to be in such cities as Seattle, San Diego and Minneapolis. Plus, we'd like to have more of a presence in Miami.

BTN: Do you subscribe to the theory that a hotel company can have more than one property in a market without cannibalizing itself?

Caldwell: Clearly, this is something we have thought a lot about. Much depends on the market. In New York, for example, we are in active discussions about the possibility of acquiring other flag opportunities. Certainly, New York is a market that can handle more than one Omni hotel. What you do is break out a market into a series of submarkets: midtown or downtown, East Side or West Side in the case of New York. In the Los Angeles market, where we just put our flag on the former Inter-Continental Hotel downtown, there's certainly room for more presence. West Los Angeles, for example, would be an appropriate place for us to have a flag. At the other extreme, of course, it's also possible for a hotel company to have too many flags in a market.

BTN: When you consider international expansion, which criteria come into play?

Caldwell: Our ambition certainly is global and we're trying to put together an infrastructure to handle that. In Europe, for example, what makes the most sense in terms of feeder markets? We'd love to have a presence in London, because that's a huge feeder market for New York and Chicago. And, I suspect, there's a lot of feeder into San Francisco and even Los Angeles. On the other ocean, we'd love to be in the Pacific Rim because of our presence in San Francisco and Los Angeles. There's also plenty of opportunity there because of the economy.

BTN: How would you describe your approach to branding? And could you foresee a day when Omni is a multi-brand company?

Caldwell: Our theory on building a brand is that you have to build one guest at a time. At the end of the day, brands are built on customer experience. Consequently, we have focused our attention this way, both in terms of product and service. At the same time, there's some relationship between brand awareness and the amount of distribution you have. As a result, we're focused very intensely as I said on increasing distribution in both North America and abroad.

Similarly, developing multiple brands isn't part of our strategic thinking at this time. Our focus is on our current market niche and doing that better and doing more of it in more markets. We think that single focus will pay off for us in the speed with which we build the brand and in the ultimate perception of that brand.

BTN: How would you describe that customer service philosophy overall?

Caldwell: We're never going to be 100 percent because nobody's perfect. Everybody makes mistakes from time to time. So, unfortunately, there will be guests who occasionally have something go wrong while at one of our properties. But the key is recovery, making sure that the people on property take responsibility, offer an apology and try to make it right. Indeed, everyone at Omni is encouraged to take on a personal feeling of responsibility for the satisfaction of our guests. Guests are number one.

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