Wednesday, August 4, 2010

Flood, Opryland Hotel closure contribute to Gaylord loss in second quarter

Gaylord Entertainment Co. reported a second-quarter loss on Tuesday after the temporary closure of the Opryland Hotel after the May floods, but it said convention bookings at the Nashville resort are up substantially for 2011.
For the second quarter ending June 30, Gaylord posted a $22.7 million loss, compared with a $10 million profit for the same period a year ago. Gaylord CEO and Chairman Colin Reed also weighed in on the discussions about a downtown convention center hotel and downplayed its impact on Gaylord Opryland Resort & Convention Center.

The company reported a net loss of 48 cents per share, much higher than analyst estimates of just 25 cents a share, according to Thomson Reuters.

On the upside, the Nashville-based company raised its full-year revenue per available room outlook for its other three resorts to grow 3 percent to 4.5 percent from earlier forecasts of 2 percent to 4 percent.

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"This is a sign that customers are beginning to spend again, and we're continuing to see the hospitality industry improve," Reed told analysts Tuesday morning.

Excluding Opryland, but including the Gaylord-owned Radisson hotel in Music Valley, revenue per available room increased 5.1 percent compared with a year ago.

The Opryland Hotel is slated to reopen Nov. 15, while the iconic Grand Ole Opry House will open on Oct. 1. Both buildings were heavily damaged during the floods, but construction work is on track, the company said.

"What looked like a disaster area now looks like a nearly completed resort," Reed said.

During the second quarter, 45,000 room nights were booked in advance at Opryland for 2011, he said.

Omni isn't a concern

Reed said he's not worried about Omni Hotel possibly running a new 700 to 1,000-room hotel to complement the city's proposed convention center.

Omni owner Robert Rowling also happens to be the single-biggest investor in Gaylord Entertainment Co.

"We don't look at the downtown convention center as a major competitive threat to our business," Reed told analysts. Opryland has nearly 2,900 guest rooms on a 172-acre resort that includes 9 acres of garden-filled atriums.

The types of conventions that tend to go into downtown convention spaces are groups like industry associations at lower rates, rather than the corporation conventions Gaylord goes after, Reed said.

At some point, Reed said, the Gaylord board will need to hear from Rowling and his TRT Holdings, which is Omni's holding company, about how they plan to compete in Nashville.

"We will need to talk about … whether there is a conflict of interest or not," Reed said.

Often, associations prefer downtown so they can offer their members a range of room rates at various hotels and a range of prices at eateries, said Butch Spyridon, president of the Nashville Convention & Visitors Bureau.

Corporations and high-end professional associations prefer being under one roof, like at Opryland, so everyone is booked at the "headquarter" hotel, Spyridon said.

Contact Bonna Johnson at 615-726-5990 or

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