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Gaylord Entertainment Co. has announced an agreement to sell the Gaylord Hotels brand and the rights to manage its four hotels to Marriott International, Inc. for $210 million in cash.
Following consummation of the sale, Gaylord will continue to own its hotel properties and other businesses and will reorganise and elect to be treated as a real estate investment trust (REIT) effective January 1, 2013. The Company will be the only lodging REIT focused primarily on group-oriented destination hotels in urban and resort markets.
"We are pleased to be announcing today a transaction that we believe allows shareholders the potential to realise maximum long-term value for their shares in Gaylord Entertainment. Our months-long review of various options led us to the conclusion that the REIT structure represents the best pathway to realise the long-term value of our business and to position the Gaylord brand for continued growth," said Colin V. Reed, Chairman and Chief Executive Officer.
Once the transaction has reached its completion, Gaylord Hotels will join the impressive portfolio of Marriott brands. Under the terms of the agreement, Marriott will manage the four one off properties under the Gaylord Hotels brand. An initial 35 year term management contract has been offered to Marriott, which includes a 2% base management fee and an incentive fee linked to the improvement of hotel profitability.
A survey of over 400 meeting planners was recently carried out by Gaylord to evaluate hotel company managers in the meetings business. In terms of loyalty programs, pricing structure, meeting space, sales process, accommodations, and destinations, Marriot International ranked as the undisputed top brand.
For more information on the hotel industry, see the latest research: Hotel Industry Reports
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