For Omni Hotels & Resorts, the Covid-19 crisis has brought not only challenges, but also an opportunity to refocus its long-term strategy. The company announced in mid-August that it is mulling a sale of five of its Texas and Florida properties, with plans to invest potential proceeds in the convention center and resort market spaces. Hotels editor Christina Jelski recently spoke with Omni president Peter Strebel to get more details on the company's post-pandemic planning.
Q: Can you provide an update on how the Omni portfolio has been faring throughout the pandemic and which markets may be seeing a faster recovery than others?
A: We certainly experienced the shock in March and April, but we did notice our reservation activity started getting very strong in May. We probably only kept around 10 of our hotels open through the early part of Covid, but we've since reopened almost all of our resorts. We're probably open everywhere except in about eight cities. The good news is that about a third of our hotels are resort hotels, and those properties are doing well this summer. We're basically selling out consistently on weekends. Our strongest resort has probably been the Omni Hilton Head. That ran an 80% occupancy rate in July, which was the same occupancy it ran the year before. Also doing phenomenally is the Omni Amelia Island in Florida as well as the Omni Homestead, which is a great drive-to resort from Washington, D.C., and the Omni Bedford Springs, which is in Pennsylvania.
Q: What's the update on urban properties? In New York, for example, the Omni Berkshire Place is currently shuttered. Is that closure permanent?
A: I don't want to use the term permanent, but we don't foresee it opening anytime in the near future. The cost structure in New York is just so crazy that we were barely making any money pre-Covid. And we've found that in most of the downtown city locations like New York, Chicago, San Francisco, there's really no activity there at all. People go to New York to vacation, but it's because of the restaurants, museums and Broadway. All those demand generators are closed. So that whole market, I think, is going to be the last to recover.
Q: Can you talk about the company's decision to potentially offload the Omni Jacksonville Hotel in Florida and the Omni Dallas Hotel at Park West, Omni Austin Hotel at Southpark, Omni San Antonio Hotel at the Colonnade and Omni Houston Hotel at Westside in Texas?
A: The brand has really changed since 2009, when we started moving more into the larger, big-box convention center hotels. And then in 2013, we bought a portfolio of luxury resorts. So we kind of found that a lot of our original Omni hotels that were in a more suburban, business park setting didn't really fit who we were and where we were going. They were good hotels, but they catered to business travel. And we've moved more toward the luxury leisure traveler and higher-end corporate group meeting planner segments. We felt it was a good time for us to kind of clean up our portfolio. And we do believe that there are going to be some really good hotels on the market in the future, because, unfortunately, a lot of hotels have a lot of debt. We're anticipating being able to purchase some hotels that better fit our brand.
Q: You've also announced your intention to double down on your investment in resort and convention center sectors. Why do you remain bullish on conventions, in particular?
A: I do think we're all going to be working remotely a lot more often, and that's already happening. But I also think with more people working in a very decentralized way, it's going to open the door for a greater need to meet in the future. Video conferencing is wonderful, but there's something about the emotion of getting people together and sharing a meal or some free time together that cannot be replaced. Culture in organizations is key, and it's very, very hard to establish a culture over the computer. We may not see these thousand-person conventions, but I do think you're going to see a lot more meetings where the objective is around team building and driving culture.