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Iconic Memphis Hotel, The Peabody, Sees Hard Work Pay Off -
Regains its Four-star Mobil Travel Guide Rating

By David Flaum, The Commercial Appeal, Memphis, Tenn.McClatchy-Tribune Regional News

Feb. 26, 2008 - Over the past four years, the Belz family ownership group has poured millions of dollars into renovating The Peabody.

They and general manager Doug Browne did nearly the same thing with the hotel's 550 employees -- as testified to by the 26 loose-leaf binders of various thicknesses arranged, with spines up, behind Browne's desk in his basement office.

It paid off.

The historic Downtown hotel regained its four-star Mobil Travel Guide rating this month after eight years off the list. It's one of 125 in the country and the only one in Memphis.

"I don't think there was any one thing," Browne said about getting the added star. "It was a combination of the renovation, the standards, the consistency, hiring people who believe in what they're doing."

Shane O'Flaherty, president and chief executive officer of Mobil Travel Guide, banged the drum for steady performance.

"They begin to get consistency across all departments," he said. "Interaction becomes more of a memorable customer experience."

It is that customer experience that makes up 75 percent of a hotel's score (facilities are the rest) -- Mobil checks 8,000 of them every year, looking at the facilities and sending and inspector in for a three-day, two-night evaluation.

"They've continually raised the bar in the customer experience year-over-year," O'Flaherty said.

The 26 loose-leaf binders -- one for each department -- were key to the rating, Browne said.

The Peabody hired Freeman Group, a Dallas-based firm that had worked with hotels like Ritz Carlton and The Four Seasons, to come up with what were basically operating manuals for each job at the hotel.

"Everything we do in the hotel was put into a standard," Browne said.

It gets as detailed as answering phones within three rings, returning valet cleaning items quickly, calling guests by name.

Over the past two years, managers retrained every worker according to those booklets at a cost he estimated at several hundred thousand dollars.

Plus, every new employee must read "Good to Great" by Jim Collins during the worker's first two weeks on the job.

"The mindset is that we're a good hotel. Everyone knows us as a good hotel. But we want to be a great hotel," Browne said.

However, because The Peabody is also a business, the question becomes whether the higher rating will translate into added revenue and profits.

"It will help increase occupancy and average room rates," said Chuck Pinkowski, hospitality analyst with his own Memphis firm, Pinkowski & Co.

Whether that will mean added profits will depend on the capital investment needed to gain and maintain the rating, he said.

"We've been raising the rates a little at a time as we've completed renovations and training," Browne said.

He said added business will come from putting the hotel in an "elite group" in the eyes of meeting planners.

Individuals who pick hotels by reading the Mobil guide may also be drawn to the hotel in larger numbers, said Kelly Earnest, director of public relations.

"People pay for reputation, too, and luxury image," she said.

Browne said the hotel's added star may also help its signature restaurant, Chez Philippe, which has had four stars from Mobil for 20 years. It may be easier for the restaurant to get the highest Mobil rating -- five stars with the hotel at four rather than three, he said.

Some of the image boost from the ratings may spill over into the overall Memphis travel business, Pinkowski said.

"This is going to give Memphis the ability to wave the flag, that the city is stepping up in class," he said. "I don't know that it's going to sell another convention, but it's something the city can brag about."


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Copyright (c) 2008, The Commercial Appeal, Memphis, Tenn.

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