Shares of Gaylord Entertainment Co. tumbled Tuesday, as officials predicted a slow start to 2009 and said they have pushed back a final decision on expanding their hotel in Nashville still further.
Gaylord shares dropped more than 20 percent in trading, though the company said its earnings in the last quarter of 2008 had more than doubled to $8.4 million from the same period a year ago.
Wall Street instead focused on officials' gloomy forecast for the first few months of the year, as corporate travelers pull back amid a recession and increased public scrutiny of trips. Shares closed at $9.14, down $2.37.
Speaking to analysts Tuesday morning, Chief Executive Colin Reed and Chief Financial Officer David Kloeppel predicted that revenue per available room, a key measurement of hotel revenue, will drop by as much as 20 percent on a same-store basis in the first quarter and as much as 12 percent for the year.
"The corporate customer seems to be going into, for want of better words, a nuclear winter here," Reed said.
The company's prediction is in line with that of a competitor, Starwood Hotel & Resorts Worldwide Inc., which last month told analysts that it believes revenue per available room will fall 12 percent to 15 percent in 2009.
Smith Travel Research, a Hendersonville-based data firm, predicts a 6 percent decline in room revenue.
The drop in business means that Gaylord will focus on controlling costs and avoid major capital expenditures. Final decisions on the company's expansion plans, such as a $400 million addition to the Gaylord Opryland Resort & Convention Center proposed two years ago, won't be made until at least the end of the third quarter.
"We have to be flexible. We have to be nimble on these issues," Reed said.
Gaylord officials said they were pleased with the company's results in 2008, as it eked out a slight profit, despite a deteriorating economy.
No word on board plansFor the year, the company earned $4.4 million, as fees collected when meeting planners canceled events or reduced the number of participants made up for some of the drop in business. Revenue increased 24 percent for the year and 20 percent for the quarter, mainly because of the opening of the Gaylord National Resort & Convention Center in suburban Washington, D.C.
Officials declined to elaborate on their plan announced last week to nominate new candidates to the board of directors. The move comes after the company's two biggest shareholders, TRT Holdings Inc. and Gamco Investors Inc., to put forth their own slates that could shake up management and force operational changes at Gaylord.
"I think that it's clear from the communications that TRT had the week earlier that TRT is receptive to talk to us, we to them, and I think at this stage we need to leave it at that," Reed said. "When we have more things to say, we will do so."
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