Marriott International reached an agreement to acquire the Gaylord Hotels brand and operations company from Gaylord Entertainment Co. for $210 million, marking Marriott's effort to further boost revenue from the family travel and meetings segments.
Nashville-based Gaylord Entertainment, which will maintain ownership of the hotels, will reorganize as a real estate investment trust.
Marriott, the largest publicly traded U.S. hotelier by sales, will get management rights to Gaylord's four hotels, totaling about 7,800 rooms. The initial management term will be for 35 years.
Gaylord also said last summer that it would build a 1,500-room resort about 10 miles east of Denver that is slated to open in mid-2016.
Marriott will use the acquisition to increase sales from both family travel and meetings. Between the four Gaylord hotels, they have a combined 2 million square feet of meetings space.
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 Co. plan to open in 2014.
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 fourth is the Gaylord National near Washington.
The acquisition, which is set to be completed in October, will boost Marriott's 2013 earnings by about 2 cents a share.
"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 May 31 statement. "This is a tremendous opportunity to advance growth and opportunity for both Marriott International and the Gaylord hotel brand."
"We are thrilled to be aligning with Marriott, an organization that consistently receives the industry's highest praise among group customers and meeting planners," Gaylord Entertainment CEO Colin Reed said in a statement. "With their expansive sales force and unique benefits such as the Marriott Rewards program, we also expect that they will be able to drive additional transient demand at our properties."
Gaylord Entertainment's first hotel, Gaylord Opryland, opened in 1977 with 580 rooms and has since expanded to 2,881 rooms and 600,000 square feet of meetings and convention space.
Gaylord Entertainment last year boosted revenue by 22%, to $952.1 million, and the company turned a $10.2 million profit, compared with a $89.1 million loss in 2010, the year its Opryland property was closed for nearly six months due to damage from severe flooding in Nashville. Gaylord Entertainment's hotel revenue per available room rose 3% in 2011.
The century-old Gaylord Entertainment, in addition to the Gaylord-branded hotels, owns, among other entities, Nashville's Grand Ole Opry, Ryman Auditorium and Radisson Hotel Opryland. Gaylord also operated the Opryland USA theme park from 1972 until its 1997 closing.
The acquisition is contingent upon Gaylord Entertainment shareholders' approval for the company to convert to a real estate investment trust next year.
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