To encourage an Omni-ClubCorp linkage for the future, Affeldt and Rowling negotiated a unique arrangement for the sale. Affeldt ensured that all ClubCorp members at the time of the deal would get the best rates available at all Omni hotels nationwide. Also, it was stipulated that all ClubCorp members at the time would be “grandfathered in” to retain the same privileges at the former ClubCorp resorts that they had before the transaction.
“We feel it will be a good value to our members, and hope Omni continues to have success with it,” Affeldt says. “The focus is on how they will be successful for the future.”
Indeed, that’s the $64,000 question. Like Walsh, Affeldt believes that Rowling, who declined to comment for this story, is aiming to use the recent expansion—the largest since Rowling bought Omni for $500 million—to transform himself and his company into a singular, hands-on hotelier. “When Mr. Dedman Sr. was the head of ClubCorp, it was a family business, and we ran it as a family business,” Affeldt says. “I think Bob is pretty much Omni and TRT, and he will run it as a family business as well.”
Last summer, Affeldt says, he drove to Omni’s Old Parkland headquarters to meet with Deitemeyer in the company’s private dining room. Over lunch, the ClubCorp CEO says he encouraged Deitemeyer about the bold new project. Affeldt also “loaned” several ClubCorp employees to Omni to help with the transition, advising the hotelier how to oversee the major expansion into golf as well as the influx of members—5,200 of them—that Omni had acquired with the purchase, an area Deitemeyer said was new to his company.
“TRT had members with [its Gold’s Gym fitness chain], but this is a whole different level altogether,” Affeldt says. “The average person on a holiday or business trip will stay two to three days [at an Omni hotel] and be gone. The average member will come to the club 57 times a year and expect service on a whole new level.”
John Blanton, a retired Barton Creek executive who also worked previously at the Four Seasons Resort in Irving, said members can be both a blessing and a burden. “A member can certainly be your best customer at the resort,” he says. “If you have the right members and the right numbers, they can spend $6 million to $8 million dollars a month in dues and monthly fees, and that’s money you can bank each month. But members can also be a lot more demanding and expect it to be ‘their’ resort.”
With the addition of the resorts purchased from KSL in 2013 and 2014, Omni now has 14 resorts among its 59 hotel properties, including eight convention-center hotels. That makes Omni the largest owner of top-shelf American golf resorts, most of which are individually owned. Besides the 5,200 members, the 2013 transaction with ClubCorp gave Omni more than 2,300 rooms, 300,000 square feet of meeting space, 34 dining venues, 12 championship golf courses, three water parks, five spas, and a ski area.
‘Changes and Difficulties’ Ahead
Not all in the golf industry are sanguine about Omni’s prospects in the space. They warn about today’s unpredictable economy, questioning whether Omni is the right company to pull off the transformation.
“It’s a big investment, and a lot depends on the weather from year to year, the economic forecast, and a lot of different conditions,” says Tom Stine, co-founder and CEO of Florida-based Golf Datatech. “It’s not a natural they will succeed. Omni is a longtime hotelier with a lot of experience. But I’m sure they understand there will be some changes and some difficulties. I think they bought the resorts knowing that.”
Adds golf industry expert Jim Keegan, managing principal of Colorado-based golf-consulting firm Golf Convergence: “I think it’s a completely different skill set that’s needed for running resorts [as opposed to] running hotels. One thing they will face is that most of the hotels and courses they bought have higher brand awareness than Omni does. People may consider Omni as a hotel on one level, and the resorts they are now running as something much higher,” Keegan says. “Omni must always work to maintain the iconic brand. Another thing is that members come with expectations and they feel like they are the true owners of the property and must be treated in a special way.”
One advantage Omni will have in dealing with most of its new resorts and members is that many of the properties it purchased already have undergone big capital-improvement projects paid for by KSL or previous owners. La Costa, for example, is finishing up a $50 million project that modernized all its guest rooms, added pools, and renovated both its golf courses, which once hosted PGA Tour events.
The Grove Park Inn in Asheville—which, it’s said, Rowling had eyed even before it was purchased by KSL in 2002—recently completed a KSL-funded, $25 million expansion. Similarly, The Homestead, the former headquarters of golf legend Sam Snead, just finished a $26 million renovation that included two modernized golf courses, a new water park, a ski area, and an equestrian park. And the Omni Mount Washington Resort, a 112-year-old landmark in New Hampshire, received a new ballroom before Omni purchased it in 2010 and has continued upkeep and renovation efforts.
“It’s been like night and day,” says Craig Clemmer, director of sales and marketing for the Omni Mount Washington. “The resort always had a good body, but never an engine like Omni provided. Robert [Rowling] has the ability to infuse management capital into the product.”
The Amelia Island Plantation in northern Florida first opened in 1971, but fell on hard times and was purchased by Omni while the resort was in bankruptcy. Amelia Island’s new owner pumped $85 million into a total overhaul of the beachfront resort with new rooms, six new restaurants, a new resort pool, beach access, and new greens for the resort’s golf courses.
“Resorts are more of a complex model than a normal hotel,” attests Amelia Island managing director Donald Stamets, who spent 15 years working for Ritz-Carlton hotels, including one in Amelia Island, and came from The Resort at Pelican Hill in Southern California. “The resort business is very competitive, and Omni must evolve and resorts must change. But I think they will do that. They will move with the times, and I think good leadership is always appreciated. I think that’s where Omni will really shine.”
To showcase the new Omni upgrades, Amelia Island bid on and was scheduled to host this spring’s nationally televised Big Break competition on the Golf Channel. The broadcast was set to include an Omni Amelia Island commercial and a new 30-second spot showcasing Omni as a golf destination company.
With the successful restoration of the Amelia Island property, the next Omni resort to get an upgrade and expansion will be Barton Creek. “Barton Creek was the original Hill Country resort,” Deitemeyer says. “But now you have the Hyatt Regency Lost Pines and LaCantera and Grand Hyatt San Antonio and the JW Marriott, and it’s become a crowded space. It already has great golf and a great city in Austin, so there is some untapped potential there to make it more competitive with the other Hill Country resorts.”
Although no official plans have been unveiled, Walsh, the Barton Creek general manager, says there’s a lot the new company and its energetic owner can do to help. “We have some good opportunities with a new spa and a ballroom. We are just not competitive with size right now, but nobody beats us with [small] groups. We have a resort pool, but we don’t have anything like the Hyatt Regency Hill Country [lazy Ramblin’ River].”
Blanton, the retired Barton Creek executive, said ClubCorp and KSL were good owners, but at times strapped for cash. “The issue was ClubCorp didn’t have a lot of cash, and KSL spent some capital on it. But if somebody will put some cash into this, it will be fine. This is a good property, but it just needs to be brought to the next level.”
Barton Creek is in a good market, Blanton says, and Omni will help it become one of the most competitive resorts in the region. “They will also ramp up the service,” he goes on. “You could possibly have a new lobby, a new spa, a ballroom, and a water park along with a new [lodging] tower, all delivered with a 4- or 5-star level of service. Omni knows their business.”
Walsh has been through almost every stage of the resort’s development, from its historic roots with the involvement of Texas legends like John Connally and Ben Barnes to its current Dallas-based owners. The right people can make the difference in iconic resorts, he says: “Having Omni here is one of the most exciting things to happen in a long time. I think it’s a big deal for a Texas company to finally own a legendary Texas resort once again. I see this as the restoration of the Barton Creek legacy.”
Back in Dallas, meantime, Deitemeyer says talk at the Omni headquarters doesn’t revolve so much around legacies as around expertise and branding. “We want to be seen as a travel experience resort expert, and golf is a big part of that,” he says. “As we looked at resorts, what better way to look at that than [with] these iconic resorts with golf and spa and location? Everybody has heard of them. It’s different, absolutely different [for Omni], but we can take advantage of the local conditions” at each property.
Deitemeyer says Omni will be working hard to restore and retain the grandeur of its iconic new resorts. Even as hard, perhaps, as the company chairman works to stay out of the spotlight. In one of Rowling’s rare public statements about business matters, he was quoted several years ago in a Guaranty Financial Group press release as saying about his investment in Guaranty: “We feel this investment has significant upside.” No doubt, the same could be said for his billion-dollar bet on golf resorts.
