LITTLE ROCK — The new owners of Little Rock Peabody are courting Davidson Hotels & Resort Properties as the first choice to manage the recently sold hotel.
Acquisition of the hotel by Memphis-based Fairwood Capital LLC started in late June. The capital investment company was still negotiating as of Friday with several hotel brands to determine what hotel name will grace the top of the red towers on Little Rock’s riverfront skyline.
Davidson Hotels & Resort Properties was listed on a document with details of the transition plan for the Peabody Little Rock hotel that was distributed to members of the Little Rock Advertising and Promotion Commission this week.
The document does not list Davidson’s role, but commission Chairman Philip Tappan said the company is Fairwood’s first choice to manage the hotel once the acquisition is complete.
“We have not met with them, but we were assured they have worked together before, and they have experience with properties of this size and with convention-center properties,” he said.
Calls to representatives of the Fairwood and Davidson companies were not returned Friday afternoon.
In 2011, Memphis-based Davidson took over management of Fairwood’s Hilton in Knoxville, Tenn., which is connected to that city’s convention center by a sky bridge. The Peabody Little Rock, with 414 rooms and 22 suites, is connected to the city’s Statehouse Convention Center and is the city’s — and the state’s — only four-star hotel.
Little Rock City Manager Bruce Moore also confirmed Friday that the Davidson company is being courted to deal with the day-to-day management of the hotel.
Davidson is described on its website as one of the nation’s largest independent hotel management companies, “specializing in the renovating, repositioning and rebranding of hotels and resorts.”
The company manages 49 properties across the United States with a total of more than 14,000 rooms. Those hotels include several brands actively being courted for the Peabody property, including Hyatt, Sheraton and Hilton, as well as other brands such as Westin, Doubletree, Radisson and Embassy Suites.
Tappan said Fairwood representatives indicated that the new hotel brand will be one of the last aspects they announce.
“However, much like Davidson is their first choice to manage the hotel, it is my understanding Marriott is the first choice being courted for a brand,” he said.
According to industry publication experts, there are no Marriott hotels with four- or five-star ratings.
Fairwood announced its intention on June 28 to acquire the Peabody Little Rock from the BG Excelsior Limited Partnership, an affiliate of the Peabody Hotel Group. The Peabody brand owns two other hotels, including its flagship property in Memphis and a second hotel in Orlando, Fla.
All Peabody hotels adhere to the tradition started at the flagship of marching mallard ducks through the lobby each morning, where they swim in the hotel’s fountain, then marching them back through the lobby at the end of the day. That tradition will end in Little Rock when the acquisition is complete.
Fairwood has been mum on the reason why the hotel was sold to it, although current management at the Peabody Little Rock said the decision was not based on a financial loss.
Financial records reported to the Advertising and Promotion Commission showed the Peabody Little Rock had lost some business starting with the 2008 recession but occupancy numbers and room nights had seen an uptick during the first six months of this year. The hotel was on par to see its first major gains in revenue since 2008.
Although the Peabody is the anchor hotel for the Statehouse Convention Center, the hotel building and land are owned by Little Rock, which controls a longterm lease for the building with the hotel group.
According to the twoweek to one-month transition plan passed out to Advertising and Promotion Commission members, Fairwood Capital is “studying hotel performance, discussing relationships and shared maintenance with the State House Convention Center, updates to the current lease and concession agreement and negotiating a deal with an acceptable international brand.”
The plan calls for the company to review the lease with the city in the next 14 days, make changes and return them to Little Rock Convention and Visitors Bureau staff.
The company will then make a presentation to the Advertising and Promotion Commission including a company overview, an executive summary of the lease, the new hotel brand, a schedule and plan for capital improvements, a transition plan and an overview of the management company.
The commission will then recommend approval or disapproval of the transfer and ratify the amended lease if appropriate. The lease then goes to the Little Rock Board of Directors for a final presentation and consideration.
The Peabody took over a lease signed by the Excelsior hotel in 1980. That hotel had opened in 1982, after the Marion Hotel — which had occupied the space since 1909 — was demolished.
The Peabody Little Rock opened in February 2002 after a $40 million renovation.
The Peabody Hotel Group’s lease with the city ends Sept. 14, 2033, but includes the option to renew the lease for two successive 25-year terms.
The Peabody Little Rock would be the eighth property acquisition for Fairwood Capital since its formation in 2008. The group also owns Hampton Inns in Memphis, Atlanta; Birmingham, Ala.; and Frisco, Texas; an Embassy Suites in St. Louis; the Hilton in Knoxville, Tenn.; and the Hilton Garden Inn in Baton Rouge.
Fairwood representatives told several trade journals that the company plans to buy 25 properties in the next few years with a focus on college towns and capital cities because those areas have a tendency to maintain steady hotel traffic.
Front Section, Pages 1 on 07/28/2012