Add the owner of The Peabody Memphis to the list of hotel brands considering an expansion into Nashville.
Belz Enterprises, which launched Peabody Hotels & Resorts this week, put Nashville on a short list of cities where the new hotel and resort management arm will target existing luxury hotels to bring under the Peabody flag.
"It's a city that we've wanted to come into for a long time," said Doug Browne, president of Peabody Hotels & Resorts, recalling an unsuccessful effort to develop the anchor hotel for Nashville's new Music City Center convention hall.
The launch of Peabody Hotels & Resorts marks the first time any hotel Belz doesn't own would be allowed to use the Peabody brand. Under the arrangement, any rebranded hotel would adopt the Peabody's standards and traditions — such as the famed ducks — and pay a branding and management feeincluding for using its reservations system.
"They have a very strong regional brand name, so it makes sense for them to grow regionally first," said hotel analyst Jan Freitag of industry tracker STR. "There are a lot of people who want to participate in the upswing of the Nashville lodging market. So it's only logical for a company out of Memphis to look in their own backyard."
Among the top 25 lodging markets, Nashville last year had the second-highest growth of 13.4 percent in revenue per available room, a key measure for hotels. Last year ended with occupancy around 68.8 percent, or 5.4 percent higher than a year earlier, and the average daily room rate was $104, or 7.54 percent higher.
Last year, affiliates of Belz and a partner sold The Peabody Orlando to Hyatt Hotels for $717 million. Earlier, an affiliate of Fairwood Capital LLC of Memphis bought The Peabody Little Rock. Belz will continue to own and operate The Peabody Memphis, which has 464rooms, 80,000 square feet of meeting space and five ducks.
Mark Bloom, a local real estate investor with stakes in the Union Station and Hilton Nashville Downtown hotels, said large hotel brands are now more interested in managing and operating instead of owning hotels.
Bloom sees The Peabody's reputation in Memphis helping in efforts to expand here. "I can see if there's underperforming properties in town, Peabody would add some cachet and would be a superior name compared to many others."