July 30, 2024 • 10 mins
Watch Carol and Tim LIVE every day on YouTube: http://bit.ly/3vTiACF.
Kurt Alexander, President of Omni Hotels & Resorts, talks about efforts to own the golf space in the hospitality industry.
Hosts: Tim Stenovec and Emily Graffeo. Producer: Paul Brennan.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business
Week with Carol Messer and Tim Stenebek on Bloomberg Radio. Well,
you might remember back in April, do you remember the
family Steve Cohen, the billionaire founder of Point seven to
two and the owner of the New York Mets SETI
expects that more businesses will move to a four day
(00:24):
work week, and it's one of the reasons he's made
investments in golf.
Speaker 2 (00:28):
I wouldn't bet against Steve Cohen. I think we're going
to see four day work week.
Speaker 1 (00:31):
Yeah, okay, or maybe this is just what final thing. Yeah,
I was gonna say good. Yeah, We'll see about that,
No question. Golf is having a moment though. Five hundred
and thirty one million rounds of golf were played last year,
and twenty twenty three was the fourth year in a
row that more than five hundred million rounds of golf
were played in the US. This is according to data
from PGA of America. Kurt Alexander sees this growth firsthand.
(00:52):
He's president of Omni Hotels and Resorts. It's the official
hotel partner of the PGA Tour and PGAT PGA America.
Kurt joins us from Dallas. Kurt, we're going to talk
about golf because at Omni you have thirteen resorts with
championship golf courses, but you also have dozens of other
properties around the US, and I want to you know,
(01:15):
we'd be remiss if we didn't ask you just about
how the business is going and what you're seeing at
the hotels and what you're hearing from the folks on
the ground around the country.
Speaker 3 (01:25):
Sure. Well, first of all, Tim and Emily, thanks for
having me on. It's great to be with you.
Speaker 4 (01:30):
Yeah, it's golfers certainly am having a moment, and the
whole travel industry has had a moment since COVID of
just people spending their money on experiences rather than goods.
I would I would tell you that business is good,
although every single month this year we have seen our
transient rate go backwards year every year.
Speaker 1 (01:53):
Explain what that is.
Speaker 4 (01:55):
So so our our our competition has seen the same thing.
And so if you've been complaining about travel being too expensive,
you may be in luck with prices going backwards a
little bit.
Speaker 1 (02:06):
That's what the transient rate means.
Speaker 3 (02:08):
Though.
Speaker 4 (02:10):
Yeah, so the transient rate is if you're going on
omnihotels dot Com right now and shopping for the room.
Speaker 3 (02:16):
We classify that as kind of a transient traveler.
Speaker 4 (02:19):
The other big segment of our businesses Group and so
for we define that as anyone who has more than
ten rooms. So that can be a wedding, it can
be a corporate event, it can be an association annual meeting.
So group has been exceptionally strong this year. Transient has
been good. And you know, the industry nomenclature is RevPAR,
(02:41):
which is rate times occupancy overall. RevPAR is up despite
pricing being a little bit down.
Speaker 2 (02:48):
So how do you explain what's driving that? Are you
saying that the pricing power has kind of reached its limit.
You now have to lower prices to enter entice people
to come and stay on the resorts.
Speaker 4 (03:04):
Yeah, and I think that I think that's well said,
that pricing power is kind of plateaued at least for
the time being. And and so there's still plenty of
demand out there. Unfortunately, in our industry, you know, we
have exhaustible inventory that and expires every day, and so
oftentimes you'll see in periods of economic weakness, the hotel
(03:25):
and lodging industry start to chase demand by lowering prices,
and so you know that did not happen during COVID.
In fact, as you all have seen across all legs
of the economy, prices went up in our industry. There
was no demand during COVID and kind of at the
peak of the virus, and so lowering your price was
(03:46):
not going to stimulate any additional demand. Where we are
and kind of the economic cycle at this point is
you know a number of companies and hotels, ours included,
are are lowering their price and not largely, but one
to two percent, you know, so we're talking five to
eight bucks or something like that to try to capture
(04:06):
the demand that's out there.
Speaker 1 (04:08):
How is demand that's out there? I mean, would you
describe that where you and describe where you are at
omnia where you you know, where economic sector you play in,
and who you're competing with. But would you argue that
that cohortive traveler is just still incredibly strong right now?
Speaker 3 (04:24):
Yeah?
Speaker 4 (04:25):
So yeah, first of all, Tim, you know, our traveler
is kind of the upper upper scale bordering on luxury traveler.
For your listeners who may not know us, we are
just the North American brand. We have fifty hotels in
the US and Canada, and we're unique and that we
own and operate everything. So whereas the big brands are
(04:46):
really franchise companies at this point, we own and operate
every omni out there, and we think that allows us
to provide a better, more integrated guest experience across our
millions of occupied rooms every year. And so where we compete,
it's it's not four seasons Rich Carlton kind of luxury end,
but it's above the Marriotte West and Sheraton, So we
(05:08):
kind of call it like approachable luxury. If we were
a car, we might be a Lexus or Evolvo. If
you think about us in that in that standpoint, I
would I would say that generally our consumer is more
has a longer runway maybe than you know. I've read
this morning that McDonald's was comp camped down on sales
(05:29):
this year this quarter for the first time since COVID
and and so we played a different kind of end
of the spectrum from that consumer. But we are seeing,
like I said, strong demand, although not as strong as
it was, which is why folks are starting to chase
the demand. That's out there through price, and it's it's
(05:50):
challenging because you know, wages which are the biggest component
of our cost structure in our payroll. This year round
numbers will be about a billion dollars on about three
billion dollars of revenue. Our payrolls not going backwards. Wages
aren't going backwards, and you know, and so it makes
for a challenging operating environment.
Speaker 3 (06:10):
But that's where we fit and kind of compete in
the hospitality ecosystem.
Speaker 2 (06:15):
Okay, let's talk about golf. You've invested a lot of
money in omni resorts, is golf operations, remodeling golf courses.
Why should people come play golf at your courses versus
the competitors?
Speaker 4 (06:31):
Yeah, So I would say first of all that golf
is a piece of kind of our brand strategy. And
so over the last couple of years, we've invested north
at two billion dollars just in our whole portfolio, golf included.
And so that is kind of the physical manifestation of
our brand. And so that's why people should come is
(06:51):
you know, we're a great brand that it's fun to
stay with. But golf for us is the reason why
people travel and there's no other bobby, I don't think
other than golf, where you can spend four hours with
somebody in a very relaxed, casual setting. You invest in relationships,
and whether it's a business relationship or a family relationship,
(07:13):
or maybe a dating relationship, like it is such a
great way to learn about someone and to spend.
Speaker 3 (07:19):
Really quality time with them.
Speaker 4 (07:20):
And so we love the game of golf because it
brings people together. And at Omni, we often like to
say that we create places and spaces where people can
come together to gather, connect and form lifelong memories. And
so we think that golf is the perfect backdrop to
a lot people to do that.
Speaker 1 (07:34):
How much of this comes from TRT Holdings, the owner
of Omni, and Robert Rowling, who was huge into golf,
invested five hundred million dollars in golf during the pandemic.
Speaker 4 (07:50):
Yeah, I think that. So for your listeners, we're a
privately held business. TRT Holdings is our owner, and we're
a family business, and and so there is an element
where kind of personal passions do bleed into the business
and the role in family. They're great golfers, and you know,
and I think there's a passion around that, but we're
(08:11):
not doing it at all because it's a hobby. You know,
we fundamentally believe it's good for business. And like I said,
whether we talked about the types of travelers earlier, the
transient traveler, they connect over the game of golf. Group
we just built at our resort down in Orlando. We
built kind of our version of a top golf then
you and we can have groups of three to four
(08:34):
hundred people and they really just rent the whole place
out and so you can you don't have to be
a good golfer to go out there and play and
play closest to the pin or see you can hit
the ball farthest, you know. So it's it's very kind
of we take a very democratized.
Speaker 3 (08:51):
View towards the game of golf.
Speaker 4 (08:52):
I'd also talk about our new resort and kind of
in partnership with the PGA of America at Omnipja Frisco,
And we have a two acre putting green where you know,
I'll go out there with my four year old and
seven year old and they don't know how to play
the game of golf, but they'll go out there and putt.
We have a ten hole short course, so kind of
the next step up, and then we have thirty six
(09:14):
holes of championship golf for people who may be, you know,
the experts are be willing to spend or able to
spend four to five hours out there playing a full
round of golf. So we're not just focused on kind
of maybe a siloed view of golf, but how do
we take this amazing game and.
Speaker 3 (09:32):
Bring it to the masses and a lot of people
that invest in their relationships.
Speaker 1 (09:36):
Hey, just ten seconds left. No sign of a recession
on the horizon.
Speaker 4 (09:39):
From your perch, I would say there's been rolling recessions
through different segments of the economy for the last since COVID.
Speaker 3 (09:49):
I think we're going to be in a period of
economic weakness.
Speaker 4 (09:51):
I don't know whether the R word will come out,
but I think that, yeah, we're in a little bit
of a in a cycle right now.
Speaker 1 (09:58):
Okay a little bit. Hey, Kirk, come back. That was
I really appreciate you joining us. That was great. Kurt
Alexander is president of Omni Hotels and Resorts, the official
hotel partner of the PGA Tour and PGA America.
Bloomberg Audio Studios, podcasts, radio news. This is Bloomberg Business
Week with Carol Messer and Tim Stenebek on Bloomberg Radio. Well,
you might remember back in April, do you remember the
family Steve Cohen, the billionaire founder of Point seven to
two and the owner of the New York Mets SETI
expects that more businesses will move to a four day
(00:24):
work week, and it's one of the reasons he's made
investments in golf.
Speaker 2 (00:28):
I wouldn't bet against Steve Cohen. I think we're going
to see four day work week.
Speaker 1 (00:31):
Yeah, okay, or maybe this is just what final thing. Yeah,
I was gonna say good. Yeah, We'll see about that,
No question. Golf is having a moment though. Five hundred
and thirty one million rounds of golf were played last year,
and twenty twenty three was the fourth year in a
row that more than five hundred million rounds of golf
were played in the US. This is according to data
from PGA of America. Kurt Alexander sees this growth firsthand.
(00:52):
He's president of Omni Hotels and Resorts. It's the official
hotel partner of the PGA Tour and PGAT PGA America.
Kurt joins us from Dallas. Kurt, we're going to talk
about golf because at Omni you have thirteen resorts with
championship golf courses, but you also have dozens of other
properties around the US, and I want to you know,
(01:15):
we'd be remiss if we didn't ask you just about
how the business is going and what you're seeing at
the hotels and what you're hearing from the folks on
the ground around the country.
Speaker 3 (01:25):
Sure. Well, first of all, Tim and Emily, thanks for
having me on. It's great to be with you.
Speaker 4 (01:30):
Yeah, it's golfers certainly am having a moment, and the
whole travel industry has had a moment since COVID of
just people spending their money on experiences rather than goods.
I would I would tell you that business is good,
although every single month this year we have seen our
transient rate go backwards year every year.
Speaker 1 (01:53):
Explain what that is.
Speaker 4 (01:55):
So so our our our competition has seen the same thing.
And so if you've been complaining about travel being too expensive,
you may be in luck with prices going backwards a
little bit.
Speaker 1 (02:06):
That's what the transient rate means.
Speaker 3 (02:08):
Though.
Speaker 4 (02:10):
Yeah, so the transient rate is if you're going on
omnihotels dot Com right now and shopping for the room.
Speaker 3 (02:16):
We classify that as kind of a transient traveler.
Speaker 4 (02:19):
The other big segment of our businesses Group and so
for we define that as anyone who has more than
ten rooms. So that can be a wedding, it can
be a corporate event, it can be an association annual meeting.
So group has been exceptionally strong this year. Transient has
been good. And you know, the industry nomenclature is RevPAR,
(02:41):
which is rate times occupancy overall. RevPAR is up despite
pricing being a little bit down.
Speaker 2 (02:48):
So how do you explain what's driving that? Are you
saying that the pricing power has kind of reached its limit.
You now have to lower prices to enter entice people
to come and stay on the resorts.
Speaker 4 (03:04):
Yeah, and I think that I think that's well said,
that pricing power is kind of plateaued at least for
the time being. And and so there's still plenty of
demand out there. Unfortunately, in our industry, you know, we
have exhaustible inventory that and expires every day, and so
oftentimes you'll see in periods of economic weakness, the hotel
(03:25):
and lodging industry start to chase demand by lowering prices,
and so you know that did not happen during COVID.
In fact, as you all have seen across all legs
of the economy, prices went up in our industry. There
was no demand during COVID and kind of at the
peak of the virus, and so lowering your price was
(03:46):
not going to stimulate any additional demand. Where we are
and kind of the economic cycle at this point is
you know a number of companies and hotels, ours included,
are are lowering their price and not largely, but one
to two percent, you know, so we're talking five to
eight bucks or something like that to try to capture
(04:06):
the demand that's out there.
Speaker 1 (04:08):
How is demand that's out there? I mean, would you
describe that where you and describe where you are at
omnia where you you know, where economic sector you play in,
and who you're competing with. But would you argue that
that cohortive traveler is just still incredibly strong right now?
Speaker 3 (04:24):
Yeah?
Speaker 4 (04:25):
So yeah, first of all, Tim, you know, our traveler
is kind of the upper upper scale bordering on luxury traveler.
For your listeners who may not know us, we are
just the North American brand. We have fifty hotels in
the US and Canada, and we're unique and that we
own and operate everything. So whereas the big brands are
(04:46):
really franchise companies at this point, we own and operate
every omni out there, and we think that allows us
to provide a better, more integrated guest experience across our
millions of occupied rooms every year. And so where we compete,
it's it's not four seasons Rich Carlton kind of luxury end,
but it's above the Marriotte West and Sheraton, So we
(05:08):
kind of call it like approachable luxury. If we were
a car, we might be a Lexus or Evolvo. If
you think about us in that in that standpoint, I
would I would say that generally our consumer is more
has a longer runway maybe than you know. I've read
this morning that McDonald's was comp camped down on sales
(05:29):
this year this quarter for the first time since COVID
and and so we played a different kind of end
of the spectrum from that consumer. But we are seeing,
like I said, strong demand, although not as strong as
it was, which is why folks are starting to chase
the demand. That's out there through price, and it's it's
(05:50):
challenging because you know, wages which are the biggest component
of our cost structure in our payroll. This year round
numbers will be about a billion dollars on about three
billion dollars of revenue. Our payrolls not going backwards. Wages
aren't going backwards, and you know, and so it makes
for a challenging operating environment.
Speaker 3 (06:10):
But that's where we fit and kind of compete in
the hospitality ecosystem.
Speaker 2 (06:15):
Okay, let's talk about golf. You've invested a lot of
money in omni resorts, is golf operations, remodeling golf courses.
Why should people come play golf at your courses versus
the competitors?
Speaker 4 (06:31):
Yeah, So I would say first of all that golf
is a piece of kind of our brand strategy. And
so over the last couple of years, we've invested north
at two billion dollars just in our whole portfolio, golf included.
And so that is kind of the physical manifestation of
our brand. And so that's why people should come is
(06:51):
you know, we're a great brand that it's fun to
stay with. But golf for us is the reason why
people travel and there's no other bobby, I don't think
other than golf, where you can spend four hours with
somebody in a very relaxed, casual setting. You invest in relationships,
and whether it's a business relationship or a family relationship,
(07:13):
or maybe a dating relationship, like it is such a
great way to learn about someone and to spend.
Speaker 3 (07:19):
Really quality time with them.
Speaker 4 (07:20):
And so we love the game of golf because it
brings people together. And at Omni, we often like to
say that we create places and spaces where people can
come together to gather, connect and form lifelong memories. And
so we think that golf is the perfect backdrop to
a lot people to do that.
Speaker 1 (07:34):
How much of this comes from TRT Holdings, the owner
of Omni, and Robert Rowling, who was huge into golf,
invested five hundred million dollars in golf during the pandemic.
Speaker 4 (07:50):
Yeah, I think that. So for your listeners, we're a
privately held business. TRT Holdings is our owner, and we're
a family business, and and so there is an element
where kind of personal passions do bleed into the business
and the role in family. They're great golfers, and you know,
and I think there's a passion around that, but we're
(08:11):
not doing it at all because it's a hobby. You know,
we fundamentally believe it's good for business. And like I said,
whether we talked about the types of travelers earlier, the
transient traveler, they connect over the game of golf. Group
we just built at our resort down in Orlando. We
built kind of our version of a top golf then
you and we can have groups of three to four
(08:34):
hundred people and they really just rent the whole place
out and so you can you don't have to be
a good golfer to go out there and play and
play closest to the pin or see you can hit
the ball farthest, you know. So it's it's very kind
of we take a very democratized.
Speaker 3 (08:51):
View towards the game of golf.
Speaker 4 (08:52):
I'd also talk about our new resort and kind of
in partnership with the PGA of America at Omnipja Frisco,
And we have a two acre putting green where you know,
I'll go out there with my four year old and
seven year old and they don't know how to play
the game of golf, but they'll go out there and putt.
We have a ten hole short course, so kind of
the next step up, and then we have thirty six
(09:14):
holes of championship golf for people who may be, you know,
the experts are be willing to spend or able to
spend four to five hours out there playing a full
round of golf. So we're not just focused on kind
of maybe a siloed view of golf, but how do
we take this amazing game and.
Speaker 3 (09:32):
Bring it to the masses and a lot of people
that invest in their relationships.
Speaker 1 (09:36):
Hey, just ten seconds left. No sign of a recession
on the horizon.
Speaker 4 (09:39):
From your perch, I would say there's been rolling recessions
through different segments of the economy for the last since COVID.
Speaker 3 (09:49):
I think we're going to be in a period of
economic weakness.
Speaker 4 (09:51):
I don't know whether the R word will come out,
but I think that, yeah, we're in a little bit
of a in a cycle right now.
Speaker 1 (09:58):
Okay a little bit. Hey, Kirk, come back. That was
I really appreciate you joining us. That was great. Kurt
Alexander is president of Omni Hotels and Resorts, the official
hotel partner of the PGA Tour and PGA America.
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Tim Stenovec
Carol Massar
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