Marriott International reached an agreement to acquire the Gaylord Hotels brand and management company for $210 million.
Gaylord Entertainment will maintain ownership of the hotels and reorganize as a real estate investment trust (REIT).
Marriott, the largest publicly traded U.S. hotel by sales will get management rights to four hotels totaling about 7,800 rooms. The initial management term will be for 35 years.
With the acquisition, Marriott aims to increase sales from family and convention travel.
Nashville’s Gaylord Opryland is near that city’s country music destinations and will be adjacent to a 114-acre family-entertainment park that Gaylord Entertainment and Dolly Parton’s Dollywood Company plan to open in 2014.
The Gaylord Palms is close to Orlando’s Walt Disney World, and the Gaylord Texan is located on Lake Grapevine near Dallas and is about 15 miles from the Six Flags Over Texas amusement park.
The Gaylord National is in Maryland's Prince George's County, near Washington, D.C.
“We have long been impressed with the hotels Gaylord has created, as well as their skill in hosting major meetings and events and attracting the family leisure market,” Marriott CEO Arne Sorenson said in a statement. “This is a tremendous opportunity to advance growth and opportunity for both Marriott International and the Gaylord hotel brand.”
While Gaylord Entertainment will maintain ownership of the hotels, Marriott will have management rights for at least 35 years.
The acquisition, which is scheduled to be completed in October, will boost Marriott’s 2013 earnings by about 2 cents a share.
The acquisition is contingent upon Gaylord Entertainment shareholders’ approval for the company to convert to a REIT next year.
Gaylord Entertainment last year boosted revenue by 26% to $269.4 million, and the company turned a $5.1 million profit, compared with a $32.8 million loss in 2010. Gaylord’s revenue per available room (RevPAR) rose 10% in 2011.
The company's revenue and profitability markedly increased in 2011 because the Gaylord Opryland was closed for about six months in 2010 to repair flood damage.
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