MEMPHIS, Tennessee—The owner of the iconic Peabody Memphis hopes to leverage the property’s traditions and success into a national hotel brand.
Belz Enterprises last week announced the formation of Peabody Hotels & Resorts to brand and manage luxury hotels that fit the style and service culture of its flagship hotel. And, of course, each new property will also feature the world-famous Peabody ducks.
Douglas V. Browne, president of the new company, said the effort is similar to how other companies launched brands based on well-known individual hotels.
“Starwood (Hotels & Resorts Worldwide) did it with St. Regis, and Hilton (Worldwide Holdings) created a new brand from the Waldorf-Astoria,” he said. “We know we already have a great brand with the Peabody, and all too often many people thought we were a much larger company than we are.”
Browne said the process to create the new company started about three years ago. In 2013, the company sold other Peabody properties in Orlando, Florida, and Little Rock, Arkansas. Affiliates of Belz and a partner sold the 1,641-room Peabody Orlando to Hyatt Hotels Corporation for $717 million. Earlier, an affiliate of Fairwood Capital bought the 418-room Peabody Little Rock and converted it to a Marriott Hotel.
Management, not franchising
Browne said the company will only consider management deals, not licensing the Peabody name.
“We don’t want to get into franchising because we want to control the name and the brand and to maintain the integrity of the Peabody,” he said, adding the company will target hotels as small as 100 rooms but probably not larger than 600 or 700 rooms. “A 400- or 500-room hotel would be ideal for us, which is what we have at the Peabody in Memphis (464 rooms),” he said.
The company will look for properties primarily in the top 25 markets and mostly in cities where potential guests are already familiar with the Peabody name.
“Our backyard is the South, so cities like Nashville (Tennessee), Atlanta, Dallas and New Orleans are all great locations we would be interested in. Of course, if someone calls with a hotel in Los Angeles, San Francisco or New York, we would also love to talk to them,” Browne said.
Resort locations, especially in the South, are another target. Browne mentioned Destin, Florida, as a natural location given its appeal to the Peabody’s core market of travelers.
“Many people who go to Destin to vacation also know the Peabody name. It would be a no-brainer for us,” he said.
For now, expansion will be confined to the United States, although Browne said Canada and the Caribbean are possible targets in the future.
To lead the expansion effort, the company promoted Craig Smith, director of sales and marketing at the Peabody Memphis, to VP of brand development.
Ducks included
Beyond the famous Peabody name, the company will bring the hotel’s culture of service and success to new properties it manages, Browne said.
“For the past year and a half we’ve been working on fine-tuning the Peabody Service Excellence culture and it is now in a form we can take to other hotels and easily implement,” he said. “We created a chronological plan with thousands of items so when we go into a hotel we plug in a date it gives us the things we need to do and in what kind of timeline.”
Browne said the essence of the culture comprises five items: accountability, dignity and respect, ownership, profitability and team success.
The company also has been beefing up its back-of-the-house capabilities in anticipation of operating additional hotels. This work includes establishing an in-house central reservations department, standardizing hotels operating systems and the development of a new website. He said these elements are ready to be deployed in new properties in which the company assumes management.
All future properties under the Peabody name will also have the company’s most famous icon: a lobby fountain that will be home to five North American mallard ducks that will make twice-daily marches to and from the fountain.
“In every sense of the word, these hotels will become Peabodys,” Browne said.