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Inside View on Lodging & Food: Tim O'Reilly

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Tim O’Reilly is CEO of O’Reilly Hospitality Management LLC, which operates two Houlihan’s Restaurants Inc. eateries in Springfield. The company’s hotel holdings include the Doubletree Hotel on Glenstone Avenue and the Hilton Garden Inn, which opened March 15 near the company’s south Springfield Houlihan’s.  

What was your biggest challenge as a company coming into 2011?
Discretionary consumer spending, joblessness and the effect of the entire economy on people traveling (or) feeling like they have enough money to go out (to) our restaurants.

What are your business expectations for 2011?
We anticipate a ramp-up period of four to eight months for the new hotel. As that occupancy grows, we expect that our restaurant will do better. … Most of the big hotel chains and the ones we’re affiliated with, which are Hilton and InterContinental Hotels Group, anticipate that 2011 will be a good year, (with) significant increases in hotel occupancy and leisure travel. The one caveat, of course, is gas prices.

Reports show Springfield’s hotel occupancy rate was 49.7 percent in 2010, below 50 percent for a second consecutive year. What gave you the confidence to build a new Hilton Garden Inn?
I have enormous confidence in our management and sales teams.  They have achieved good success at the Doubletree Hotel here in town, and the overflow from that property alone will be a significant part of our occupancy at the Hilton Garden Inn. … Many economic experts that I trust have a positive economic and industry outlook for the near future, which would indicate that we should trend upward in citywide occupancy.

How have you aligned your holdings, which include hotels in Branson and Tulsa, Okla.?
We have implemented a Web-based sales program called Delphi that allows our salespeople to sell all of our hotels when making sales calls. There is a lot of overlap for meeting business in the two markets, so it’s good to be able to give alternatives for different cities on sales calls.

What types of staff adjustments have you made with the opening of Houlihan's south and Hilton Garden Inn?
We've had to, obviously, hire a lot of new people with a new restaurant and a new hotel here in town. We've also had to hire additional management. We've had to formulate plans to increase our entire management structure of the organization. We're getting big enough to where we are going to need to evolve into a centralized corporate office. We'll have to have an operations person. We'll need sales and marketing. We'll need revenue management for the hotels, from a corporate perspective, and accounting.

How has Houlihan's south performed so far, and what kind of growth are you anticipating for it?
I think it's done very well. Restaurants are difficult businesses because there's a thin profit margin, but we've hired a very ...  experienced restaurant management team. We are becoming more profitable ... . It is a difficult business, so it's a struggle at times. We're very pleased with the location. Obviously it's a very high traffic area, and there's not much in terms of direct competition real close to it. ... We expect it to be a good location for us for many years to come. We're really pleased with our partnership with Houlihan's Restaurants Inc., which is the franchisor for us out of Leawood, Kan. (It is) a very modern company (and) very dynamic in changing (its) menu. (It has) a great marketing department ... . Those things are hard to replicate. It's really a very small company compared to all other chains, so we have direct interaction with our marketing plan. ... We basically make (a) request and have a vision for marketing, and it helps us implement it in a style that (company leaders) are comfortable with.

Which side of your business is more difficult: accommodations or food service?
They both have their unique challenges. In a full-service hotel setting, they're very similar because the food and beverage aspect is part of your full-service hotel. One of the things I guess has helped us is that we're both a restaurant company and a hotel company. Sometimes the challenge for hotel management companies is that the food and beverage side doesn't get implemented appropriately. I think some of the expertise we have on the restaurant side has helped us be better as a company.  

What challenges have there been with the recently opened Hilton Garden Inn?
Other than the normal construction challenges of just budget constraints and timing, we haven't really had any unusual, unexpected challenges. We have a great team involved in the design and construction of the facility. Where we've had problems, the team has worked it out and corrected them. I guess we've been lucky.

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