Global hotel brand, Marriott International, has acquired the management rights of the Gaylord brand and hotel management company for US$210m. The transaction will add four hotels and approximately 7,800 rooms to Marriott’s portfolio.
The hotel chain has entered into the agreement with Gaylord Entertainment Company and the transaction is conditioned on Gaylord Entertainment’s shareholders approving the company’s conversion into a real estate investment trust. The deal is expected to be complete by October.
Under the deal, Gaylord will continue to own the existing Gaylord hotels and Marriott will assume management of these properties under long-term agreements. Gaylord Hotels include Gaylord Opryland in Nashville, Tennessee; Gaylord Palms in Kissimmee, Florida; Gaylord Texan on Lake Grapevine near Dallas, Texas, and Gaylord National, on the Potomac in National Harbor, Maryland.
Gaylord Hotels are positioned in the group and family leisure segments with approximately 186,000sqm of meeting and event space.
“We have long been impressed with the hotels Gaylord has created, as well as their skill in hosting major meetings and events,” Marriott International President and CEO, Arne Sorenson, said. “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.”
He says Gaylord’s ‘everything-in-one-place’ properties are “attractive to group meeting planners”.
“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,” said Colin V. Reed, Chairman and Chief Executive Officer, Gaylord Entertainment Company.
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, and further expects the transaction to be accretive to Marriott’s earnings per share by approximately two cents in 2013.
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