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Hotel industry analysts shouldn’t see a new sales partnership between Omni Hotels & Resorts and Loews Hotels & Co. as the beginning steps of some kind of pandemic-induced merger of necessity.
Omni and Loews launched a cross-marketing and sales partnership this week aimed at giving their respective customer bases more options in markets where the two brands don’t overlap. The two companies, which similarly focus on a mix of resorts as well as business and meetings-oriented properties, have explored ways to work together for years.
That doesn’t mean they’re looking to fully consolidate, as is sometimes the case when these cooperative sales agreements are inked.
“We’re kind of the last of the independent, medium to large-scale operators in the business and are trying to take advantage of the unique positions we have to create more meaningful distribution for our clients looking for experiences outside our existing branded hotels,” said Alex Tisch, president of Loews. “It was that simple.”
Both Loews and Omni operate in major urban markets and have significant parts of their portfolios targeting the hard-hit corporate travel and events sector.
Leaders of both companies maintain this partnership is not something born out of need during the pandemic. Rather, it is a culmination of years of informal conversations about finding ways to work better together at a time when competitors are getting gobbled up by some of the global giants.
“We always looked for ways to work together with the understanding we are unique and distinct businesses,” Tisch said. “We do have a lot of similarities that we should help leverage each other because, at the end of the day, it’s a net-sum gain for both our companies.”
While Omni and Loews are both fairly popular with business, convention, and resort travelers, they are relatively small brands. Omni has 60 hotels across North America while Loews has 27 compared to thousands of Hilton and Marriott-branded properties in the region.
The partnership aims to give better distribution to customers at both companies. Following the closure of the Omni Berkshire Place last year due to the pandemic, Omni doesn’t currently have a hotel in New York City. Those clients are now able to book at the Loews Regency New York from the Omni website.
The program does not extend to loyalty reciprocity, but there are other ways of working in closer coordination in the future.
The first phase of the partnership is the cross-selling in cities where Loews and Omni don’t compete. The second phase involves a potential lead referral system where, if one of the brands can’t take a convention or meeting, maybe the other can at one of their properties.
“That is part of the future,” said Peter Strebel, president of Omni. “We see it as a partnership that will evolve and continue to grow over time.”
The Loews and Omni leaders claim the partnership isn’t due to the pandemic, but distribution channels are widely seen as a key component to a faster hotel recovery. It is the argument bigger brands like Marriott, Wyndham, and IHG are all using to convince existing hotel owners to take on one of their own brand affiliation deals.
Both Strebel and Tisch maintain their distribution partnership does not mean laying the foundation for an eventual merger, even if analysts continue to speculate on potential link-ups or opportunistic deals to be had in the wake of the pandemic.
Some of that speculation has died down in recent weeks, as signs increasingly point to more hoteliers holding onto their assets amid growing optimism around vaccine distribution.
“We definitely don’t see any [mergers and acquisitions] activity in the future at all. These businesses are family-owned and very emotionally tied to both families,” Strebel said. “I think in the world of competition today, it’s good to have friends.”