Gaylord's Way

CAPITAL DEBUT

The Gaylord National Resort & Convention Center, in Prince George’s County, Md., is now open. Features include:

* 2,000 guest rooms

* 470,000 square feet of meeting space

* 20,000-square-foot spa and fitness center

* Six restaurants and bars

Last month’s official fete of the new 2,000-room Gaylord National Resort & Convention Center near Washington, D.C., allowed VIPs and prospective clients to see firsthand the hotel’s signature glass atrium with multilevel gardens, its fine-dining and casual restaurants, its 20,000-square-foot spa and fitness center, and its two-story rooftop Pose Ultra Lounge. But the opening bash also could be viewed as the kickoff to a new era of ambitious expansion for the Gaylord Hotels company.

Gaylord’s rise in prominence, especially in the past six years -- during which time the company opened properties in Kissimmee, Fla.; Grapevine, Texas; and, now, Prince George’s County, Md. -- has been a result of a unique business model that, unlike those in place at municipal convention centers, attempts to capture as much revenue as possible by placing thousands of hotel rooms, large amounts of meeting space, and dining and entertainment outlets all under one roof.

Now Gaylord is intent on keeping even more meetings business in-house. By adding convention hotels throughout the United States, Gaylord aims to accommodate more of its clients’ business within the brand as customers rotate meetings around the country.

“Meeting planners are increasingly receptive to making multiyear, multiproperty rotational bookings within our portfolio of hotels,” notes John Caparella, chief operating officer of Nashville-based Gaylord Hotels. “A larger nationwide network of group-focused resorts is our goal as we help meeting planners schedule events around an increasingly greater number of properties.”

As evidenced by two projects the company has pursued -- a proposed new-build facility in Chula Vista, Calif., just south of San Diego, and the failed acquisition of the 508-room Westin La Cantera Resort in San Antonio -- Gaylord is targeting major urban or resort areas for expansion, particularly in the central and western regions of the country, to counterbalance the company’s presence in the Southeast.

New properties, like the existing ones, will have high ratios of meeting space to guest rooms and will offer self-contained experiences. However, the company wants to diversify its portfolio of hotels and the methods by which it operates them. In addition to new signature Gaylord properties with 1,500 guest rooms or more, company executives anticipate opening smaller hotels to appeal to groups that shy away from cavernous facilities. And, in a departure from developing resorts from the ground up, executives expect to acquire, renovate and expand existing hotels, as well as manage resorts under the Gaylord flag for third-party owners.

“I think it’s a big deal,” says Thomas Hazinski, managing director of Chicago-based hospitality consulting firm HVS International. The presence of Gaylord in the meetings market already has forced a lot of convention centers to add hotels and other amenities to compete with the one-stop-shop model, he explains. In short, Gaylord “is changing the expectations of what a convention center has to offer. A box with loading docks is a thing of the past.” The company’s westward expansion promises to have a major impact on the industry as well.

Still growing

But Gaylord’s expansion plan isn’t focused exclusively on entering new markets. All of the company’s existing properties are preparing for significant growth, as well.

* In Nashville, the Gaylord Opryland Resort & Convention Center, which just underwent a $125 million renovation, is now in the design phase of a $400 million to $600 million expansion that will add a 435-room stand-alone hotel and 440,000 square feet of new meeting and exhibit space, bringing the resort’s totals to nearly 3,300 guest rooms and more than 1 million square feet of meeting space. The expansion is slated to open in 2010.

Outward bound: Expansion plans
would add 435 new hotel rooms at
Gaylord Opryland.

* In Grapevine, the Gaylord Texan Resort & Convention Center is looking to add 520 rooms and 280,000 square feet of meeting space, to open in late 2010 at a cost of more than $300 million. The additions will give that hotel 2,000 rooms and more than 600,000 square feet of meeting space.

Branching out:
Gaylord Palms
seeks county
approval to expand.

* In Kissimmee, executives at the Gaylord Palms Resort & Convention Center have submitted a bid to Osceola County to develop at least 500 hotel rooms with significant meeting space near the existing Gaylord site. Currently, the hotel has 1,400 guest rooms and 400,000 square feet of meeting space, and Gaylord’s expansion proposal calls for as much as 350,000 gross square feet of meeting and exhibit facilities.

* Gaylord National, which welcomed its first group at the end of March, already has expanded. Originally slated to have 1,500 rooms, early demand motivated Gaylord to push the total to 2,000 during construction, to accompany 470,000 square feet of meeting space. At the time of opening, the hotel already had more than 1.3 million future room nights booked. “We’re on record pace, and interest is escalating,” says Sheldon Suga, senior vice president and general manager of the hotel. “We’re very proud of the product.”

The National property is, in some ways, a departure for Gaylord, in that the self-contained hotel is not isolated but rather in the middle of a 300-acre pedestrian-friendly development along the Potomac River, with dining and entertainment outlets that are owned and operated by independent companies. In addition, four other hotels are either open or planned: a 195-room Westin, a 190-room Aloft, a 160-room Residence Inn by Marriott, and a 150-room Hampton Inn and Suites. Other attractions include a marina serviced by river cruise charters and water taxis to Alexandria, Va., and Mount Vernon, Va.

The Gaylord National is distinct in other ways: It’s taller and has a smaller footprint than other Gaylord hotels. “The design of the property, from the guest perspective, is more intuitive,” Suga says. “There’s no long walkway to the convention center.”

Looking ahead

Company executives are excited at the prospect of growth, if not the pace at which it’s proceeding.

The Chula Vista property has yet to receive all relevant city and state approvals, despite the fact that the hotel once was expected to open this year. Last month, Gaylord executives decided to pay a $12 million penalty to terminate its $250 million purchase agreement of La Cantera in San Antonio. The company had been searching for a partner to share the costs of the acquisition and expansion of the property. Colin Reed, Gaylord Hotels chairman and CEO, in a statement cited the state of the economy as a reason to walk away from the deal.

“We have been negotiating on a couple of deals that, frankly, haven’t panned out the way we would have liked,” Reed said during a conference call with analysts late last year, “and so we are off to the next ones now.”