Nashville's Gaylord Opryland hotel, the largest property in
the United States outside of Las Vegas, reopened Nov. 15 following extensive
renovations necessitated by this spring's devastating floods in Tennessee. The
rehabilitation of the hotel, which totals 2,881 rooms and 600,000 square feet
of event space, displaced 300,000 pre-booked room nights and cost Gaylord
between $169 million and $179 million. 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 month with BTN senior associate editor Michael B. Baker.
Business Travel News:
What's your group travel outlook with your largest property coming back online?
David Kloeppel:
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 [third-quarter] earnings 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.
BTN: 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?
Kloeppel: It's
starting to go away. Meeting planners are trying to take advantage 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 planner may be asking for, so the hotels aren't giving them as
much.
BTN: Many
hoteliers and analysts say significant rate growth will not happen until group
travel returns to pre-recession levels. When will that happen?
Kloeppel: That's
hard to predict. It depends on what direction our economy takes, and our economy
is slowly improving. If we continue in the 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 back in 2006 and 2007.
BTN: Has remote
conferencing technology affected your bookings, and has it in this recession
become part of the "new normal" of group travel?
Kloeppel: 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.
BTN: What is your
development strategy at Gaylord?
Kloeppel: We're
always looking to grow our footprint. We have our eyes firmly focused on
locations west of the Mississippi River, 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.
This report appears in
the Nov. 29 issue of Business Travel News.