Marriott International has entered into an agreement with Gaylord Entertainment Company to acquire the Gaylord hotel management company for US$210 million.
The deal will see Marriott assume management of all four Gaylord properties under long-term agreements, adding approximately 7,800 rooms to its portfolio. Gaylord will continue to own the hotels.
Gaylord’s properties include the Gaylord Opryland in Nashville, Tennessee, Gaylord Palms in Kissimmee, near Orlando in Florida, Gaylord Texan on Lake Grapevine near Dallas, and Gaylord National on the Potomac River in Maryland, near Washington DC. The four properties are major MICE venues, offering combined event space of more than 180,000m², as well as retail, dining and entertainment areas, and an existing partnership with DreamWorks.
Arne Sorenson, Marriott’s President & CEO said; “We are excited to add Gaylord Hotels to our brand portfolio and are thrilled Gaylord Entertainment selected us to manage their properties. 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. This is a tremendous opportunity to advance growth and opportunity for both Marriott International and the Gaylord hotel brand.
“Gaylord properties will benefit from Marriott’s economies of scale, including lower costs for central reservations, procurement and other services, plus strong sales, revenue management, marketing and distribution systems, while Marriott will be able to capture even a greater share of the major event market. Gaylord’s ‘everything-in-one-place’ properties are very attractive to group meeting planners. As a new REIT owner, Gaylord Entertainment should benefit from improved hotel profitability associated with Marriott’s ability to generate substantial cost savings and incremental demand,” he added.
“We chose Marriott – a brand that is a recognised leader in the hospitality industry – due to their focus on providing the highest quality experience for both group and leisure customers,” said Colin V. Reed, Chairman & CEO of the Gaylord Entertainment Company. “According to a recent survey conducted on behalf of Gaylord in February of over 400 high-quality meeting planners, Gaylord ranked first in all under one-roof offerings and amenities and Marriott ranked as the number one preferred group destination provider overall due to its service standards and wide distribution.”
Upon completion of the transaction, Marriott will operate the hotels under management agreements with an initial term of 35 years. Marriott International expects to earn an incentive fee in its first full year of management, based on improvement in Gaylord Hotels’ profitability.
The agreement is subject to the approval of Gaylord’s shareholders, and the transaction is expected to close by October 2012.