Hotel Reflagging Affords New Image, Route to Growth in Little Rock

by Kate Knable  on Monday, Jan. 14, 2013 12:00 am  

The Clarion banners that were draped over the outdoor signs at the Hilton hotel at 925 S. University Ave. in Little Rock last week signaled the visible start of the hotel’s reflagging process. The Hilton Medical Center hotel began operating as a Clarion last Monday.

Little Rock should see an even more striking hotel conversion to a different brand later this year, if the sale of The Peabody Little Rock goes as planned. Marriott is the brand in the works for the 11-year-old Peabody.

Marty Belz, managing member of the ex-Hilton’s operator, Arkansas Hotel Management LLC, is party to both deals.

Belz is also president and chairman of Peabody Hotel Group, a subsidiary of Belz Enterprises of Memphis that operates the three upscale Peabody hotels. In Arkansas, Belz’s companies own only two hotels, both in Little Rock.

Belz declined to talk about the expected transition for The Peabody but spoke with Arkansas Business about the Clarion.

“After operating the hotel for almost 10 years, we just think this fits our needs and the needs of our hotel better,” Belz said. “We thought the Clarion brand may fit best with the customers that stay at the Hilton, and we think we will actually be able to achieve higher occupancy at the hotel with the Clarion brand.”

Reflagging will require about $1 million in renovations. Permanent Clarion signage, a new computer system and all new TVs, carpeting and drapes are among the changes Belz’s group will work on during the next two years or so. The new signs should appear in February.

Belz’s group bought the property about nine years ago while it was in foreclosure and weathered the Great Recession with the hotel branded as it was.

However, the Hilton name has a reputation for being expensive, Belz said.

“In that market, that perception doesn’t work well with us,” he said. The Hilton’s taxable receipts, including restaurant sales, totaled $5.9 million from January to November 2012, according to data from the Little Rock Convention & Visitors Bureau.

Like Hilton, Clarion offers full-service hotels with similar amenities, like restaurants, meeting rooms, frequent traveler discounts and an online reservation system but without the Hilton’s pricey stigma — and with some actual lower costs, Belz said. Both Hilton and Clarion are international brands.

Clarion’s royalties and other fees charged to franchisees like Belz’s group are about 8 percent less than Hilton’s, he said.



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