At the end of May, Marriott International acquired the Gaylord Hotels brand and the rights to manage the four hotels from Gaylord Entertainment. The $210 million acquisition still must be approved by Gaylord shareholders in a vote expected to happen in August or September; pending that, the deal likely would close in October. Gaylord would continue to own the properties and plans to reorganize as a real-estate investment trust.
Marriott, meanwhile, would wind up adding four large, convention-friendly properties to its inventory, comprising 7,800 guest rooms and approximately 2 million square feet of meeting space overall.
While only four hotels are involved, this deal is significant for Marriott, said Bjorn Hanson, divisional dean and clinical professor at New York University's Preston Robert Tisch Center for Hospitality, Tourism and Sports Management. "It's very difficult for a large company of Marriott's size to show a high-percentage growth rate to its shareholders," explained Hanson. "While it's only four properties, it's a lot of rooms to add. That looks very good to the market."
What's more, Gaylord's properties represent a different supply segment for Marriott, Hanson added. While Marriott already operates some big-box meeting hotels, Gaylord's are at a somewhat lower price point and service level. "This would put Marriott in the middle of a lower-price segment," noted Hanson.
Furthermore, Marriott has the potential to add substantial value to the Gaylord hotels, Hanson said, as the chain's purchasing power could have a significant effect on the bottom line for the Gaylord properties. Those hotels also would acquire Marriott's loyalty program benefits and the reach of Marriott's global group sales team.
"Marriott has arguably one of the strongest loyalty programs in the business," said Hanson. "That's the kind of added benefit that could drive up attendance or even length of stay at meetings." Also, planners with established Marriott relationships now might consider a Gaylord property.
Following the acquisition announcement, Gaylord put on hold the development of an $800 million resort and convention hotel in Aurora, Colo.