$210M deal adds to Marriott’s empire
Gaylord brand beefs up chain’s conference venues
Marriott, one of the USA’s five biggest hotel chains, is about to get bigger.
Under a $210 million deal announced Thursday with Gaylord Hotels, Marriott’s poised to add 7,800 rooms to its 644,000 across 17 brands around the world.
The percentage gain isn’t large for Marriott. But if approved, the deal would beef up Marriott’s meetings and large group business at Gaylord’s four conference-center hotels.
By buying the long-term management contracts from Gaylord, Marriott expects to make about $1 billion a year by increasing sales through its sales system, cutting expenses, boosting profitability and ultimately collecting more fees, says Rick Hoffman, Marriott’s executive vice presi- dent of merger and acquisitions.
Gaylord’s hotels are essentially mini-cities that contain a mix of restaurants, bars, retail shops, spa and fitness centers, landscaped grounds and ballrooms. The hotels are located in the metropolitan areas of Orlando, Washington, D.C., Dallas and Nashville.
Marriott, which is based in Bethesda, Md., could have changed the Gaylord hotels’ name, Gaylord Entertainment CEO Colin Reed says. But he says Marriott approached the Nashville-based Gaylord with the intention of keeping the small but well-regarded brand.
“We have a lot of hotel brands, so we look for brands that have a differentiated experience and mean something. These hotels have an identity in existing markets, and we like that,” Marriott’s Hoffman says.
Marriott operates about 3,700 hotels under 17 brands such as Marriott, Courtyard by Marriott and SpringHill Suites.
For Marriott customers, the mar- riage means more choice in where to book meetings or vacations.
Besides meetings, Gaylord hotels are known for their winter ice-sculpture shows that attract about 1 million people a year.
The deal also gives Marriott customers another option to earn and burn loyalty points. For corporate customers, it offers the possibility of negotiating better volume rates.
The Marriott Rewards program has 38 million members.
The announcement comes as Marriott and other hotel operators have been seeing companies, associations, government bodies and other organizations book more meetings than in recent years.
“We’re at the early stage of a recovery cycle,” Hoffman says. “We’ve seen a good recovery in that (group) business.”
Gaylord expects to save $33 million to $40 million a year by shaving administrative and distribution costs. Reed said Gaylord, which employs about 9,000 people, expects a “couple hundred” layoffs at its hotels and at the corporate level.