It’s been a pretty good year for Marty Belz, the president and CEO of Peabody Hotel Group. On Saturday, Dec. 11, the Peabody Orlando hosted the Central Florida Hotel & Lodging Association annual gala while celebrating its grand reopening after a $450-million expansion.

Approximately 1,500 people were in attendance as Belz was honored with the 2010 CFH&LA Charles Andrews Memorial Hospitality Award for his contributions to the industry and community.

The massive expansion that saw the addition of a 750-room tower, 150,000 square feet of meeting space and a top-to-bottom renovation of the existing property was completed in September, two and a half years after it began.

The Peabody Orlando now features 1,641 guestrooms and 300,000 square feet of meeting space and is the largest non-gaming hotel to earn Forbes' four-star rating. The added space has allowed Belz and his property to compete on a national level for group business, which brings in approximately 90 percent of the hotel’s revenue.

Despite the property’s success, in addition to the other two Peabody properties in Memphis and Little Rock, AR, Belz and his company have not forgotten the local community. Peabody will celebrate its 25^th year this spring as a sponsor for Give Kids The World, an Orlando foundation providing terminally ill children with a 70-acre village filled with fun and entertainment. Belz says Peabody has raised more than $10 million for the charity over the years.

Belz recently took some time to discuss the award, how the Peabody Orlando was able to undertake such a massive project during the industry’s deepest downturn and why it’s now poised to reap the rewards of the expansion.

It’s been a pretty good year…
It’s been a great year. To finally get our hotel opened and underway, and then to top it off with this award—it’s great.

How excited were you to win this award?
It’s the biggest award given for the Central Florida Hotel & Lodging Association. It’s a great honor and I was totally surprised when I found out.

Your expansion project was timed almost exactly with the beginning and end of the industry downturn. Was that a good thing or a bad thing?
We have been extremely fortunate. When we closed our loan in April 2008, it was right before the recession really got going. Had we been three months later, our loan probably would have never closed. The timing was perfect. From a development standpoint, it became a good opportunity to buy products, like construction and ff&e, so I think we got the benefit of the downturn happening, and then when we opened in September, the economy was beginning its upswing. We’ve been extremely busy since and above our projections.

How are things going now?
We’re ahead of our projections for the current year and future bookings are very positive. In fact we have updated our budget and increased revenues because of the strength we’re showing from our sales and marketing. We’re seeing next year as a wonderful improvement.

How bad did it get?
It was quite challenging during the last almost two years in our area. We had a tough time—kind of doubly tough, because of our construction going on and the recession.

Did the ‘AIG Effect’—the anti-luxury rhetoric and sentiment that curtailed the meetings industry and luxury travel—affect you in Orlando?
Probably some, but it wasn’t something for us that was measurable. Really because of when we were doing the construction, certain groups didn’t come here for that reason, so the (AIG Effect’s) impact was kind of minor. We had already projected a decrease in occupancy because of the work going on and it really wasn’t much worse than we projected.

Is the meetings industry and your group business still lagging?
I’m real encouraged by what’s happening right now. We have all this great activity and all these great groups coming in. We’re seeing more spending, not only to attend, but also F&B spending is increasing, which is another sign that the world is coming back.

What does almost doubling your size in guestrooms and meeting space mean to the hotel’s business?
I think one thing we’re finding is this new facility has broadened our reach from a competitive standpoint. We are now having more companies look at us from farther away, like CA, and we’re competing more maybe on a national level with other large hotels in addition to the local competition.

How did your other properties fare compared to the Peabody Orlando?
The mix of business in Little Rock and Memphis is different—both are about 50 percent group and the balance is transient. So the dynamics aren’t quite the same. They both have certainly went down during the recession, but not as much as Orlando.

Are you attracting larger or different groups to Orlando now?
We do about 90 percent of business with meetings and groups, and in the past, 60 percent of that business had to do with what was going on at the convention center across the street. The dynamic has changed, where now 65 percent to 70 percent is in-house groups using our facilities.

And that’s more profitable?
Oh yeah, because all that food and beverage. So it seems to be working really well. Bookings next year are holding up to that same fact and a great percent are in-house, which is more lucrative.

You probably need to catch your breath, but any more expansion or new development plans in the future?
Before the recession, we were seriously looking at Nashville and Atlanta, but weren’t as far along as what we were doing here. Then the recession hit. Those markets hopefully improve over time and those are still parts of the country that would be good locations for Peabody, but we need the markets and the financing industry to improve first.

How did you fund the Orlando project and were there any concerns over the financing during the project?
One of the things that worked out perfectly was when we did our original pro forma we had projected interest rates to be higher than they actually were during the project. Interest rates stayed lowed and that worked to our benefit. We never had a problem paying notes and in fact, we had a surplus. It really worked well and we had a wonderful partner with Estein & Associates. They’ve been our equity partner before and they’re really pleased with the hotel. They used to help us develop our factory outlet centers.