Gaylord Hotels to Join Marriott “Machine”

Gaylord Opryland will be run by Marriott International. Image courtesy Gaylord.

Hotels owned by Gaylord Entertainment will soon become one of the 17 brands managed by Marriott International. Nashville-based Gaylord announced Thursday that it will sell the management rights for $210 million.

Gaylord executives believe the company has been undervalued by Wall Street and for months have been considering ways to boost shareholder value, including a sale of the company. Ultimately, they came up with getting out of the business of running hotels altogether.

Gaylord will convert into a real estate investment trust and continue owning its four sprawling hotel and convention centers. Marriott would run them. CEO Colin Reed says the deal will reduce costs, primarily at the corporate headquarters here in Nashville.

“With this Marriott machine, we believe there will be approximately $20-plus million in savings after management fees.”

Marriott does plan to maintain Gaylord as a “distinct brand.” But Reed says becoming part of the Marriott Rewards loyalty program should drive more non-convention traffic to its hotels.

Marriott already owns convention center hotels around the world, and CEO Arne Sorenson says it’s a good place to be right now.

“Noteworthy in this cyclical business, group demand tends to hold up well in periods of economic weakness. Gaylord has done an outstanding job positioning their hotels to pursue this attractive segment.”

As part of the announcement, Gaylord has pulled the plug on developing a new hotel outside of Denver.

Gaylord’s conversion into a real estate investment trust would become effective January 1st but still requires shareholder approval. A special meeting will be scheduled in the third quarter of this year.

Gaylord will continue to own and operate the Grand Ole Opry and Ryman Auditorium. In a statement, the company says it is “committed to maintaining the legacy of these historic attractions.”