Lodging giant Marriott International is expanding its already massive empire by offering Gaylord Entertainment $210 million for the rights to manage four of its hotels, including the prized Gaylord National in Oxon Hill.
The deal will give the Bethesda-based hotel operator an additional 7,800 rooms in its portfolio, while saving Nashville’s Gaylord up to $40 million a year in management expenses.
“We have long been impressed with the hotels Gaylord has created, as well as their skill in hosting major meetings and events and attracting the family leisure market. This is a tremendous opportunity to advance growth and opportunity for both Marriott International and the Gaylord hotel brand,” said Marriott chief executive Arne Sorenson, in a release announcing the agreement.
The deal is conditioned upon Gaylord’s shareholders approving the company’s conversion into a real estate investment trust. If Gaylord is given the thumbs up, the company will continue to own the existing Gaylord hotels and Marriott will assume management of the properties.
Marriott has agreed to operate the hotels under an initial term of 35 years, and expects to earn an incentive fee in its first full year of management based on improvement in Gaylord’s profitability.
Gaylord’s shareholders are scheduled to take a vote on the agreement in August, and the agreement is expected to close by October.