With a look towards the future, The PEABODY in Orlando, FL is reinventing the property to the tune of $420 million.  Scheduled to for completion in late 2010, the hotel is adding a 32-story tower with 750 guest rooms & suites, 150,000 sq. ft of function space, a 17,000 sq.ft spa complex.

When the Peabody Orlando debuted in 1986 it was something to behold. At nearly 900 rooms and with 57,000 square feet of convention space, it was the biggest hotel in the region. So big, in fact, that the Peabody was the largest hotel in Central Florida in terms of square footage when it opened.

But while the Peabody has continued to fill rooms, the market around it has experienced seismic shift. In the early days there were just three major theme parks and the Orlando Convention Center was still in its infancy. Business in the market was good but no one expected what came next. An explosion of hotel rooms as Orlando has become epicenter of both tourism and meetings for the world. Now more than 112,000 hotel rooms and 450 properties are in the region, according to the Orlando/Orange County Convention and Visitor’s Bureau. That’s more hotel rooms than in the entirety of India.

To match the mettle of a city that has seen such radical change, the Peabody is embarking on a change of similar magnitude. It’s getting a $420 million injection that will totally reinvent the property when complete in late 2010. Being added is a 32-story tower with 750 guest rooms and suites, 150,000 square feet of flexible function space, a 17,000 square foot spa complex, grotto-style swimming pool, additional shops, boutiques, a Napa Valley wine-themed restaurant, an express restaurant in the convention area, and a parking garage for 2,100 cars.

It’s the change that Alan C. Villaverde, executive vice president, Peabody Hotels, and general manager of The Peabody Orlando, has been waiting for since the 20th century. And one he swears he’ll see through before he retires.

“This has been a long time coming,” said Villaverde, noting that the existing building will also get a makeover to seamlessly match the décor across the entire property. “When the Convention Center opened in 1985 it had 160,000 square feet of convention space. That is almost what we are adding to our hotel.”

Though land was purchased about 10 years ago, the expansion has been in a state of flux ever since September 11, 2001. The terrorist attacks had a heavy impact on Orlando tourism, eviscerating years of growth and completely squelching the expansion project that had just secured financing during the previous summer. This time, Villaverde said, financing is secured and shovels are in the ground.

And though the industry is heading into another downturn just as his project is beginning, Villaverde said that is fine by him.

“What better a time to fix your hotel than in a downturn? I think we will be well positioned. All the investment banks saw a future for this property as well. The timing couldn’t be better and the construction in Central Florida has been hit with real estate slump. That will benefit us for construction labor costs and material. We’ll come out of a recession with a brand new expanded hotel,” Villaverde said confidently.

These days the hotel gets about 50 percent of its business from in-house functions, with almost all the rest being fed by the hotel’s close proximity to the Convention Center, a goliath which is across the street and adjacent to the Peabody. The goal of this expansion project is to beef up the in-house business, which has a higher spend per person than those staying for other reasons. So far the hotel has been losing business to some of the larger projects in the area such as the Gaylord Palms and Rosen Shingle Creek. Villaverde expects this new project will put the hotel in a position to service larger events they previously have not been able to accommodate. with more than 1,600 hotel rooms and almost 200,000 square feet of meeting space, it will be able to handle significantly larger events. But Peabody will also have some tight competition. Opening in 2009, also adjacent to the Convention Center is a 1,400 room Hilton hotel. Aiming squarely for much of the same business, this property will have 130,000 square feet of meeting space including a 50,000 square foot ballroom and 15,000 square foot spa and fitness center.

No matter, says Villaverde, their property will have other advantages. Perhaps one of those is the grotto style swimming complex, the focal point of the whole property. A new restaurant and two lounges will overlook the area, which will feature waterfalls, a poolside restaurant and lazy river experience. More important, it will be a highly attractive function area that will appeal to meeting planners. “This will be the very heart of the hotel,” he said.

For now it’s expected the new parking garage will open in September 2009. Function space is due to start coming on line in about May 2010 with the new hotel opening in October. Existing guestrooms will also get a complete makeover during summer 2010.