The impending deal where Marriott would take over management of Gaylord’s hotels should have little impact on planners, the CEO’s of both hotel companies told Travel Market Report.
Both companies have a strong following among the planners of large meetings and management contacts at the Gaylord properties will not change, they said.
Concerns raised in social media
Since the deal was announced last week, a number of planners have commented in social media about it and how “changes in management clauses” on meeting contracts might come into play. (See story, “Gaylord-Marriott Deal Raises Planners’ Concerns,” TMR, June 4, 2012).
Both CEOs downplayed those sentiments.
No change in contacts
“In January and February of this year, we commissioned an independent survey of planners to understand their preferences,” said Colin Reed, CEO of Gaylord Entertainment. “We found that Marriott was number one in preferences for large groups. We were number three or four, which we were pleased with considering our size.
Management at Gaylord properties will remain in place, so planners will be working with the same people at the hotels, he added.
“There might be planners here and there concerned about not being able to work with their usual contacts, but we have an excellent reputation with planners,” Arne Sorenson, CEO of Marriott International, told Travel Market Report.
Marriott is optimistic about the meeting business, he added, “Meetings are always first to be cut back in a downturn, but we think they are going through a fairly normal progression of recovery.”
Gaylord wanted to change strategy
Gaylord believes that Marriott will be a good fit with its goals and company culture, Reed said at a press conference during the NYU International Hospitality Investment Conference in New York this week.
“It was time for our company to change its strategy. We have been thinking about spinning off the operational elements,” he said. “The research we have done validates that Marriott is the best company in the world for us to turn over these functions.”
Marriott to gain large group market share
Marriott was attracted to Gaylord’s strength in the association market, Sorenson said while speaking at the conference.
“Gaylord is a small company with big hotels that has done a great job in the big group space, particularly with associations,” he said. “They are a great cultural fit for us.
“This partnership will give us more market share in the big group arena. We hope to develop more Gaylord properties but considering the size of these properties that will not happen quickly.”
Marriott buys brand, management responsibilities
Marriott, which paid $210 million, will acquire the Gaylord brand and management responsibilities for four hotels – Gaylord Opryland in Nashville; Gaylord Palms in Kissimmee, Florida; Gaylord Texan near Dallas; and Gaylord National in National Harbor, Maryland under long-term agreements.
In total, the four properties house about 7,800 guest rooms and two million square feet of meeting and event space, as well as multiple options for recreation, shopping, dining and entertainment.
The transaction is conditioned on Gaylord shareholders approving the conversion into a REIT. If approved, Gaylord would continue to own the existing Gaylord hotels and reorganize itself as a real estate investment trust (REIT), effective January 1, 2013.
The company also said it will not proceed with the Aurora, Colorado hotel and convention center project “in the form it previously anticipated.”
Not a done deal?
However, according to a report in Hotel News Now, a trade publication, Marriott-Gaylord is not a done deal. The report said that other investors, including the company that owns Omni Hotels, is working to put together a deal to acquire Gaylord.
As far as the Colorado project, the Denver Post has reported that city leaders in Aurora are meeting with another developer as a possible replacement for Gaylord as the developer of a 1,500-room hotel and convention center in that city..