Downtown hotels boost sales during Omni’s first month

By Karen Robinson-Jacobs
Friday February 17, 2012

At least eight of the major hotels in or near downtown Dallas saw room revenue increase in December, the first full month of operation for the city-owned Omni Dallas Hotel.

The Omni, which is attached to the Dallas Convention Center, opened Nov. 11. Newly released figures from the state comptroller’s office give the city and competing hotels the first chance to see how much money it will bring in and what kind of impact it will have on nearby properties.

At least two hotels saw revenue decline, and one attributed the drop largely to the 1,001-room Omni.

For December, the Omni posted room revenue of $1.4 million, according to state figures. That number does not include revenue from any of the hotel’s food and beverage operations, which hotel officials said have been strong. And since the hotel opened ahead of schedule, few large groups were booked.

For the same month, major competitors including the Hilton-Anatole, Hyatt Regency and Sheraton Dallas posted increases in room revenue.

The early gains bolster arguments that the $500 million property will be the rising tide that lifts hotel sales throughout downtown. Hotel experts cautioned against reading too much into one month, especially since that month is December, when convention traffic dies down.

With 1,606 rooms, the Hilton Anatole took in $2.5 million in December room revenue, up nearly 9 percent from 2010. The owners of the high-end hotel had been among those most strongly opposed to the city’s building a new hotel.

Harold Rapoza, the hotel’s general manager, did not see the December jump as a surprise. The Anatole hosted several large conventions in December, including the Major League Baseball winter meetings, he said.

Also, “our new leisure promotion, Christmas at the Anatole, was a resounding hit and resulted in increased [non-group] room nights from the previous year,” he said.

“As a side note, so far in 2012 we are noticing higher-than-expected attendance at many of the conventions being held here, which is an encouraging sign of a recovering economy.”

At the 1,840-room Sheraton Dallas, the state’s largest hotel, December room revenue was up 3.6 percent to $1.5 million.

During the second week of December, the hotel hosts the annual Snowball Express, an event held to celebrate “family members of fallen military heroes who have given their lives since 9/11,” said general manager Ray Hammer. That cuts down on room sales.

He noted that “January results exceeded expectations with strong short-term demand, both in the [nongroup] and group arenas.”

At the Hyatt Regency Dallas, which was the closest convention hotel to the convention center before the Omni opened, December room revenue gained nearly 8 percent to $1.4 million. The hotel, with 1,120 rooms, saw a boost in room revenue from groups and individual travelers, said Fred Euler, general manager.

“January was also up,” he said. “We are optimistic about the rest of the year.”

At the Fairmont Dallas, with more than 500 rooms, December room revenue was $925,211, down nearly 2 percent from a year ago. Officials with the Fairmont declined to comment.

At the Crowne Plaza Dallas Downtown, room revenue dipped by about 4 percent to $291,617.

“The opening of the Omni had a dramatic impact on the downtown marketplace, and only through substantial discounting could we make up most of the lost ground,” said Brian Seeley, general manager of the Crowne Plaza.

“So we got the double-whammy of both less revenue and less profitable revenue, due to lower prices.”

Omni executives could not be reached for comment.

Jan Freitag, senior vice president of global development for STR, a travel research firm, said it may take six months to a year before a trend is apparent.

“It’s too soon to draw an inference on what the impact is of the Omni,” he said. “By June you should be able to look and see something.”