|Omni’s US$67.1-million deal last year for Amelia Island Plantation near Jacksonville, Florida, is an example of a deal the company made in a secondary market.
IRVING, Texas—Omni Hotels & Resorts plans to focus on big-name markets during its hotel hunt this year.
Specifically, the company will look at properties in such Western United States cities as Seattle, Phoenix and Salt Lake City, said Mike Garcia, Omni’s CFO and senior VP of acquisitions and development.
Selecting those markets for development is simply a matter of going where the guests are, Garcia said. “There’s a big group base out there that we would like a presence in,” he said of the three markets.
Omni has a portfolio of 50 hotels comprising approximately 18,000 guestrooms, Garcia said. The company has no specific goals as to how many properties it might add during 2011.
“In a lot of ways, we are opportunistic investors,” Garcia said. “We don’t have a magic number. We’re pretty patient with our money.”
He declined to provide a specific dollar amount regarding how much Omni might be willing to spend, saying there also was no “magic number.”
“We do have a lot of cash sitting on the balance sheet,” he said.
Garcia added that other cities, including some secondary markets, in the Western U.S. also will be targeted. Omni last year showed interest in secondary markets, acquiring Amelia Island (Florida) Plantation in a US$67.1-million bankruptcy auction deal.
Omni will continue to look for deals “that have some hair on them,” Austin Khan, the company’s VP of acquisitions and development, said during an interview soon after the deal was made.
“We’re looking at deals where we feel we can get opportunistic returns,” Khan said.
The group business that Omni wants to tap into trailed the rebound in corporate travel a year ago, but Garcia said there appears to be signs of life in group.
“It is catching up,” he said. “The increase in occupancy was driven by the corporate traveler.”
As for the broader hotel sector recovery, Garcia is optimistic. “I think the recovery is going to continue … There’s not a lot of new product coming online.”
Year-to-date through January 2011, the U.S. hotel supply increased by 1.1%, according to data from STR. The total supply for 2010, meanwhile, increased by 1.9% to approximately 4.8 million rooms.
The company has one property in Canada—the Omni Mont-Royal in Montreal—but that number could potentially change, he said.
“We would like to have more hotels in Canada,” Garcia said. Omni officials recently went on a development trip to Edmonton, he added.
Garcia mentioned Toronto as “a good feeder market” as well.
In January, Canada posted a 2.7% increase in occupancy to 47%, flat average daily rate of CAD119.74 (US$123.00), and a 2.7% rise in revenue per available room to CAD56.34 (US$57.88), according to STR.
In 2010, the country’s occupancy increased by 3.5% to 60.9%, ADR was up 2% to CAD128.82 (US$132.35), and RevPAR increased by 5.6% to CAD78.48 (US$80.63).
“It’s a good market,” Garcia said of Canada, adding that he believes the country’s hotel market is primed to grow.