The owner of properties containing some of the largest hotel and convention centers in the country struck a deal to buy out one of its partners for $210 million as it begins to see encouraging recovery signs in group business sales.
Nashville, Tennessee-based Ryman Hospitality Properties announced this week that it reached an agreement to buy the remaining 35% stake in Gaylord Rockies Resort & Convention Center near Denver from Rida Development. The deal also includes 130 acres of undeveloped land next to the hotel.
The deal gives Ryman full ownership of the real estate of five Gaylord brand hotels. It also owns Gaylord Opryland in Nashville; Gaylord Palms near Orlando, Florida; Gaylord National in Maryland near Washington, D.C.; and Gaylord Texan in the Dallas area.
Gaylord Entertainment designed the Colorado hotel before selling the Gaylord hotel brand to Marriott International in 2012 for $210 million. Gaylord became Ryman Hospitality, a real estate investment trust that owns the hotel real estate.
Ryman transferred development rights to Houston-based Rida Development at the time. Rida Development and Los Angeles-based investment firm Ares Management started building the hotel in 2015.
A year later, Ryman took a 35% equity stake. Ryman and Rida Development bought out Ares in 2018 while the hotel was nearing completion for $270 million. Rida Development and Ares owned the 130 acres separately from the hotel.
“This transaction is an attractive financial proposition,” Colin Reed, Ryman’s CEO, told investors on the company’s first-quarter earnings call. Reed said the hotel’s performance should add to the company's growth in adjusted funds from operations, a key measure for investors.
Ryman and Rida Development stalled an expansion of the 1,500-room resort last year during the pandemic as a money-saving move.
Ryman’s earnings are expected to improve once the Gaylord National reopens July 1. It has been closed since the beginning of the pandemic, and Ryman used the closure period for renovations.
The Rockies deal comes as the company reported $84.2 million in revenue for the first quarter, down 73.1% from $313 million in the same period last year.
Group business vanished for the industry beginning in mid-March 2020, eliminating a vast majority of revenue for Gaylord hotels.
The number of daily cancellations has decreased, Reed told investors. He added that the hotels have rebooked 61.8% of the room nights canceled during the pandemic.
Small group meetings have picked up. Ryman reported 26,000 group room nights in the first quarter, 50% more than the previous quarter.
In another sign that hotels are on a recovery path, Reed highlighted Gaylord bookings in April for meetings to occur this year increased 119% from April 2019 to 52,000 room nights.
Reed said the number is an all-time record for any April. Of those, 41,000 were new room nights, not ones rebooked because of the pandemic.