David Kloeppel
Nashville's Gaylord Opryland hotel, the largest property in the United States outside of Las Vegas, reopens Nov. 15 following extensive renovations necessitated by Tennessee's devastating floods this spring. The closure of the hotel, which totals 2,881 rooms and 600,000 square feet of event space, displaced 300,000 pre-booked room nights and will cost Gaylord between $169 million and $179 million in repairs and rehabilitation. Of those 300,000 room nights, 40,000 moved to one of Gaylord's three other properties in the United States, 60,000 moved to other properties in Nashville and the remaining 200,000 had to move to other markets around the country, Gaylord Entertainment president and COO David Kloeppel said in an interview this week with Management.travel. Additional excerpts from the interview follow.
What's your group travel outlook with your largest property coming back online?
The other Gaylord properties are doing quite well. We've seen a nice pickup in overall travel. We are focused on group business primarily, and we've seen a nice increase throughout the summertime and that seems to be continuing into the fourth quarter. We just released earnings this morning and released a very positive outlook for 2011, based on what we have on the books right now and based on the behavior we've seen of meeting planners over the past six to nine months looking to increase their travel expenditures. Lead times are still shorter than they were at the peak of the economy in 2007, but we've seen those begin to lengthen out as well.
Since the downturn began, hotels that cater to group business have had to make some fairly deep concessions in negotiations. Are they still doing this?
It's starting to go away. Meeting planners are trying to take advantage today of an economy that hasn't yet fully improved, so they're still trying to drive a hard bargain. Fortunately, hoteliers are seeing it pick up in other forms of business travel and recognizing there are other alternatives than the big concession a meeting planner may be asking for, so the hotels aren't giving them as much.
Many hoteliers and analysts say significant rate growth will not happen until group travel returns to pre-recession levels. When will that happen?
That's hard to predict. It depends on what direction our economy takes, and our economy is slowly improving. If we continue in this slow-growth, slow-improvement scenario we're in right now, we're still a couple of years away from seeing the kinds of travel levels we saw in 2007, but we're seeing robust increases here in the short term, and we're pleased with what we're seeing. Cancellation levels are at pre-recession levels, and attrition is getting there. We're seeing the marginal traveler make that decision again that they need to attend that association annual meeting, just like they did in 2006 and 2007.
Has remote conferencing technology affected your bookings, and has it in this recession become part of the "new normal" of group travel?
For our core customer, conferencing technology can't substitute for getting a group together. Our typical customers are hundreds and thousands of people, and there's no way to effectively communicate with that many people except in person. We do see more of that activity for very small get-togethers or as a substitution for a sales person who would like to go see their customer but [holds] a videoconference instead, and that trend will continue to some extent.
What's your development strategy at Gaylord?
We're always looking to grow our footprint. We have our eyes firmly focused on locations west of the Mississippi, because that's where we need more distribution. We're taking a fairly cautious approach to growth at this point, but we're keeping our eyes open, and we hope to be able to add to our portfolio in the coming 12 months or so.