Omnam grows aggressively in Mediterranean –

With boats in key markets and the technical know-how to take on challenging luxury projects, developer Omnam Group, London is making a name for itself in Europe, particularly in the Mediterranean.

Led by CEO David Zisser, the group works with private equity firms such as Bain Capital and other equity partners to develop, stabilize and likely sell their assets over a typical timeframe of three to five years. It is also active in the aparthotel sector and now has five hotel projects in various stages of development, including the W in Rome, which opened last December with 147 open-plan guest rooms and 15 suites.

“We are able to find the rough stones and make the most of them to maximize the value of the property. We are creative thinkers and we know how to build at the right price, manage assets to achieve the right margins and we are very demanding and dedicated.” – Guy Heksch

It is working on a mixed-use development of the old post office in Rotterdam that will include a 224-room Kimpton hotel and 305 luxury residences; a baccarat hotel by SH Hotels & Resorts is under development in the hills of Florence, Italy and should be ready next year; it is developing a Four Seasons in Puglia, Italy, with IAC investment; and a 140-room Edition-branded hotel with partner Bain Capital on Lake Como on the site of the old 285-room Britannia Excelsior Hotel is about two years away. In addition, Omnam has already acquired and sold a development in Amsterdam comprising a 476 room Radisson and 50 B aparthotels/apartments.

Chief Operating Officer Guy Heksch said Omnam has two projects in Paris and another in Rome, with operator announcements pending.

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Heksch explained that the group is happy to take on more complicated, distressed, often mixed-use deals because it has the financial connections and expertise on the development side to handle complex rebuilds. He added Omnam always looks at buildings that have a rich history. “We’re looking for what we can really transform and respect the heritage of the building – we’re not trying to water down the story, we’re trying to get the best out of it.”

According to Heksch, budget-friendly design is very important to Omnam, as is branding that adds value at the exit.

Increasing F&B revenue (anywhere from 30% to nearly 50% of revenue) is also a big part of the Omnam equation and it tends to involve licensing with local F&B talent and working out a plan with the management company to recruit them for compensate for this lost revenue. “It helps us not only in terms of sales, but also in terms of awareness and the guest experience,” added Heksch, who was a longtime F&B manager at Starwood and Marriott. “We treat it like a deal within the company.”

More recently, Omnam has focused on smaller F&B spaces, partly due to work-related challenges and to stay narrowly focused on a concept of being very good at something. “We don’t want to build any more breakfast rooms,” jokes Heksch.

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Aggressive developer

Omnam is very aggressively looking for additional opportunities and is looking around the Mediterranean, specifically Greece, Marbella, Spain and more in Italy. Heksch can expect another six to eight deals in the six months, including a few in Italy, Germany and France. “We feel like luxury tourism is where we want to be and we feel like the travelers are back,” he said. “Luxury and ultra-luxury are booming in key markets.”

Site of Omnam’s Edition refurbishment on Lake Como in Italy

Omnam also sees people taking cheap flights to save for a few nights at a luxury hotel. As a result, it wants to own the experience component of the stay to ensure the property is a hub. “You’re almost a member,” said Heksch. “We seek engaging experiences and partner with the best of the best on the market on the F&B side.”

With most developments taking place 24 to 48 months after opening, Heksch also believes Omnam’s timing will be right when all macroeconomic challenges are resolved.

Interestingly, Heksch alluded to franchising’s potential to reach the luxury segment. “I think we need to get to some kind of hybrid for the simple reason that you’re paying for the support that you don’t necessarily always get,” he said. “I pay development fees and an ongoing fee, but I still have to get my F&B and make sure I’m at every meeting with the design etc. because I don’t trust the process as much as I do the operator. It is a problem. They have limited resources and I know it because I’ve been on the other side of the table… If they don’t commit to adding resources and shifts to give more support, to be more committed, then I think they will doomed to go into a franchise model in a way.”

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In summary, Heksch said: “We are able to find the rough stones and make the most of them to maximize the value of the property. We are creative thinkers and we know how to build at the right price, manage assets to achieve the right margins and we are very demanding and dedicated. We have resources in every country we work in – country managers, back office, etc. There are always resources that speak the local language and we always work with local architects. We always go to the local heritage office to understand everything that came before us and to present the history… We are a hands-on developer, small and dedicated, and we are always growing and looking for the best projects.”

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