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Gaylord Entertainment Company Reports Second Quarter 2012 Results

“We achieved an occupancy level of just over 79 percent in the second quarter, a nearly six percentage point increase over the second quarter last year. Along with increases in outside-the-room spending, our occupancy results helped drive solid revenue growth of nearly 7 percent in the second quarter. This translated into a RevPAR increase of 7.5 percent and a Total RevPAR increase of 6.7 percent. As a result of both our revenue growth and our continued efforts to drive efficiencies throughout our business, we delivered solid profitability growth in our hotels and our Gaylord Hotels CCF Margin 4 increased 40 basis points.”

Segment Operating Results

Hospitality

Key components of the Company’s hospitality segment performance in the second quarter of 2012 include:

  • Gaylord Hotels RevPAR increased 7.5 percent to $136.75 in the second quarter of 2012 compared to $127.20 in the prior-year quarter. Gaylord Hotels Total RevPAR increased 6.7 percent to $318.72 in the second quarter of 2012 compared to $298.84 in the prior-year quarter.
  • Gaylord Hotels CCF increased 8.3 percent in the second quarter of 2012 to $74.4 million compared to $68.7 million in the prior-year quarter. Gaylord Hotels CCF Margin increased 40 basis points to 31.9 percent in the second quarter of 2012 compared to 31.5 percent for the same period last year.
  • Gaylord Hotels attrition that occurred for groups that traveled in the second quarter of 2012 was 6.7 percent of the agreed-upon room block compared to 10.3 percent for the same period in 2011. Gaylord Hotels in-the-year, for-the-year cancellations in the second quarter of 2012 totaled 14,997 room nights compared to 16,916 in the same period of 2011. Gaylord Hotels attrition and cancellation fee collections totaled $1.7 million in the second quarter of 2012 compared to $2.9 million for the same period in 2011.

At the property level, Gaylord Opryland generated revenue of $74.2 million in the second quarter of 2012, a 1.5 percent increase compared to the prior-year quarter of $73.1 million, driven by an increase in occupancy. Occupancy for the second quarter of 2012 was up 5.8 percentage points to 81.6 percent compared to the prior-year quarter. Average Daily Rate (“ADR”) during the second quarter of 2012 decreased 1.6 percent to $157.31, compared to $159.83 in the prior-year quarter, driven by an increase in lower-rated SMERF (Social, Military, Educational, Religious, and Fraternal) groups. RevPAR in the second quarter of 2012 increased 6.1 percent to $128.41 compared to $121.08 in the prior-year quarter, as the increase in occupancy offset the decline in ADR. Total RevPAR increased 1.4 percent for the second quarter of 2012 to $282.84 compared to $278.88 in the prior-year quarter, as the increase in occupancy offset a decline in outside-the-room spending that resulted from the business mix shift towards more association and SMERF business and less corporate business in the second quarter of 2012. CCF was $23.5 million for the second quarter of 2012, a 10.5 percent decrease compared to $26.3 million in the prior-year quarter, driven by lower outside-the-room spending and lower-rated group business. Gaylord Opryland’s CCF in the second quarter was negatively impacted by a natural gas explosion on June 19 th which resulted in a profitability loss of approximately $1.3 million. The Company is pursuing a business interruption claim related to this explosion. CCF Margin was 31.7 percent in the second quarter of 2012, a 430 basis point decrease over the prior-year quarter.

Gaylord Palms posted revenue of $44.4 million in the second quarter of 2012, a 17.5 percent increase compared to $37.7 million in the prior-year quarter. The increase was driven by the growth in occupancy, ADR, and outside-the-room spending. Occupancy for the second quarter of 2012 increased 12.0 percentage points over the prior-year quarter to 85.8 percent, as occupied group room nights grew across all customer segments for a total increase of approximately 12,600 room nights despite approximately 6,800 being out-of-service for renovations. ADR for the second quarter of 2012 increased 2.1 percent to $168.73, compared to $165.32 in the prior-year quarter. Second quarter 2012 RevPAR increased 18.7 percent to $144.78 compared to $122.02 in the prior-year quarter, driven by the increase in occupancy and ADR. Total RevPAR in the second quarter of 2012 increased 24.1 percent to $366.14 compared to $295.02 in the prior-year quarter driven by the increase in group outside-the-room spending. CCF in the second quarter of 2012 increased 34.9 percent to $13.9 million compared to $10.3 million in the prior-year quarter. This resulted in a CCF Margin for the second quarter of 2012 of 31.3 percent, a 400 basis point increase compared to 27.3 percent in the prior-year quarter.

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