It’s been 10-plus years in the planning, but the $450-million expansion of the Peabody Hotel in Orlando is underway and on target for completion next year. When complete, the addition will include a new 30-story, 750-room guestroom tower, a 2,100-space parking garage, 145,000 square feet of meeting space, an additional pool, a new full-service spa and fitness center and five more food and beverage outlets.

The Peabody project is part of a larger public-private master plan for improvement of Orlando’s convention center district. (The Peabody sits directly across the street from the main entrance to the massive convention center). That 15-year project focuses on the creation of an urban environment around the center that will weave restaurants and hotels in the area through better pedestrian access and an improved transportation system.

To catch-up on progress of the Peabody expansion, we recently chatted with the busy Alan Villaverde, executive vice president of Peabody Hotels and general manager of the Peabody Orlando.

How’s business?
It’s down, but the whole market is down. 2009 is going to be a bad year for Orlando.

What’s the status of the renovation?
We’re on schedule, and actually some of the components are ahead of schedule by a couple of weeks. We’ve had some favorable weather and the construction company, Balfour Beatty, has been very efficient and has a good team of people. The convention space is all framed and starting to be enclosed. The roof is going on, and the guestroom tower is up to about five or six stories. They’re doing a floor every six days.

To what do you attribute this excellent progress?
You can’t point to one thing, but the builder’s schedule was conservative and weather has been very favorable. We had very few rain days coming out of the ground. Also, because of the economic downturn and lack of other construction jobs, the sub-contractors are putting their best teams on this job.

What kind of issues do you face in operating a hotel in the middle of an expansion project of this magnitude?
Once they get in the hotel, customers can’t tell any construction is going on. I’m surprised  the noise complaints and the overall complaints have been very minimal. The biggest setback has been  parking. Customers had gotten used to self-parking, but due to the construction we’ve had to go to mandatory valet parking. That’s almost been a year, but the good news is that our new parking garage will be completed in July.

How do you assure meeting planners and other customers that the expansion project won’t affect their stays?
Immediately they see the impact of the construction is minimal. The construction company has been very sensitive and flexible to our needs and the needs of our customers. We do a great deal of citywide business connected to the convention center, and normally convention attendees go over to the convention center during the day and aren’t in the hotel between 9 and 5, when the construction is going on.

How has been the impact of the AIG Effect on your hotel?
While we haven’t experienced  many cancellations, lead volume all over the country is down and I don’t know whether it’s the AIG Effect or general concern (by groups) over profits and cost containment. Of course, we’re not in Las Vegas, which is ground zero for the AIG Effect. With the Peabody name, meeting planners can book at the Peabody and get the service and amenities of a quality hotel without the drawback of the high name recognition of some other properties. We have a wholesome reputation.

This AIG Effect is potentially very damaging to our whole industry, but I think it’s only a temporary thing. It’s politicians reacting to a populist mood. Eventually, it will go away but we’re in the heart of it right now.

What’s been the secret of the Peabody receiving the Mobil Four-Star Award for 20 consecutive years?
Three things, really. Number one is the longevity of staff, general manager, executive committee and senior department heads. When you establish that kind of stability at the top, you can develop a consistency that other hotels have difficulty matching because out of necessity they have rotating department heads and GMs.

Number two: Our ownership (the Belz family of Memphis) has been obsessive about maintaining, upgrading and updating the hotel over the past 22 years. They never given me any grief when I ask for capital dollars to maintain this product.

Finally, our service standards and commitment to excellence is a big contributor. If you talk to the Mobil people, they’ll tell you the majority of the score is composed of service and how associates treat the guests. Some hotels  don’t get that and instead are focused on the “things” and not the service. Then they’re surpised when they put in 1,000-thread-count linens and marble everywhere but only get three stars. They’ve missed the boat.

Web resources: http://www.peabodyorlando.com/new_developments/