Gaylord Entertainment Co. today (5/31) announced that it has agreed to sell the Gaylord Hotels brand and the rights to manage its four hotels to Marriott International for $210 million in cash.
Gaylord will continue to own and operate the Grand Ole Opry, Ryman Auditorium and other attractions. According to a press release, no changes are anticipated at these iconic assets and Gaylord is committed to maintaining the legacy of these historic attractions.
Following consummation of the sale, Gaylord will continue to own its hotel properties and other businesses and will reorganize and elect to be treated as a real estate investment trust (REIT) effective January 1, 2013.
Gaylord Hotels will join the Marriott portfolio of brands. Terms of the management agreement call for Marriott to manage the resort and convention centers in the Nashville, Dallas-Ft. Worth, Orlando and Washington, D.C. areas under the Gaylord Hotels flag. Marriott will receive a management contract with an initial 35 year term, 2% base management fee, and an incentive fee linked to improvement in hotel profitability.
Colin V. Reed, Gaylord Chairman and Chief Executive Officer stated, “The REIT structure allows us to benefit from a more efficient tax structure, and establish a platform to grow our distinct asset base through organic growth of our existing portfolio and, in time, through strategic acquisitions. Moreover, we believe that by working with Marriott International, our shareholders will benefit from significant property efficiencies and corporate overhead reductions, as well as revenue synergies which include Marriott’s ability to attract and market to large group customers.”