Gaylord Entertainment Co. reported its financial results for the third quarter of 2009. Consolidated revenue decreased 12.2 percent to $199.1 million in the third quarter of 2009 from $226.7 million in the same period last year. Hospitality segment total revenue decreased 10.7 percent to $182 million in the third quarter of 2009 compared to $203.8 million in the prior-year quarter. Gaylord Hotels revenue per available room decreased 9.6 percent and total revenue per available room decreased 10.7 percent in the third quarter of 2009 compared to the third quarter of 2008. Total revPAR for 2009 includes attrition and cancellation fees of approximately $4.3 million collected during the quarter compared to $3.3 million in fees for the prior-year quarter. Loss from continuing operations was $13.1 million, or a loss of $0.32 per share, in the third quarter of 2009 compared to a loss of $6.5 million, or $0.16 per share, in the prior-year quarter. Loss from continuing operations in the third quarter of 2009 included a pre-tax $6.6 million non-cash impairment charge related to the write-off of goodwill of Corporate Magic, a reporting unit within the company’s Opry & Attractions segment, as well as a pre-tax $3 million non-cash charge to recognize compensation expense related to the surrender of certain executives’ stock options.

Including the non-cash charges noted above, Adjusted EBITDA was $28.8 million in the third quarter of 2009 compared to $36.4 million in the prior-year quarter. Consolidated Cash Flow increased 2.4 percent to $40.7 million in the third quarter of 2009 compared to $39.7 million in the same period last year. Gaylord Hotels gross advance group bookings in the third quarter of 2009 for all future years was 491,262 room nights, a decrease of 0.5 percent when compared to the same period last year. Net of attrition and cancellations, advance bookings in the third quarter for all future years were 313,998 room nights, a decrease of 18.1 percent when compared to the same period last year.

In the company’s hospitality segment in the third quarter of 2009 include, same-store revPAR decreased 12.3 percent to $95.19 in the third quarter of 2009 compared to $108.52 in the prior-year quarter. Same-store Total RevPAR decreased 14.9 percent to $224.56 in the third quarter compared to $264 in the prior-year quarter. Same-store hotels excludes Gaylord National for all periods presented. In the third quarter of 2009, Gaylord National revPAR decreased 2.5 percent to $122.68 compared to $125.80 in the prior-year quarter. Gaylord National Total RevPAR increased 0.6 percent in the third quarter to $305.05 compared to $303.34 in the prior-year quarter.
Third-quarter 2009 same-store CCF decreased 12.1 percent to $31.3 million compared to $35.6 million in the prior-year quarter. Same-store CCF Margin increased 80 basis points to 24.8 percent in the third quarter compared to 24 percent for the same period last year and benefited from a $1.2 million favorable adjustment for lower property taxes at Gaylord Opryland. In the third quarter of 2009, Gaylord National CCF increased 42.4 percent to $15.2 million compared to $10.7 million in the prior-year quarter. Gaylord National CCF Margin improved 800 basis points to 27.2 percent in the third quarter compared to 19.2 percent for the same period last year.

Same-store attrition that occurred for groups that traveled in the third quarter of 2009 was 9.9 percent of the agreed upon room block compared to 10.6 percent for the same period in 2008 and 14 percent in the second quarter of 2009. Same-store cancellations in the third quarter totaled approximately 14,375 room nights compared to 23,777 in the same period of 2008 and 29,381 in the second quarter of 2009. Gaylord Hotels attrition and cancellation fee collections totaled $4.3 million in the third quarter of 2009 compared to $3.3 million for the same period in 2008 and $8.2 million in the second quarter of 2009.

“We continued to see signs of stabilization this quarter, as we booked almost 500,000 new room nights for future periods, nearly equivalent to our bookings in the third quarter a year ago,” said Colin Reed, chairman and chief executive officer of Gaylord Entertainment. “Cancellations for the quarter were down compared to prior quarters in 2009 and lower than the third quarter of 2008. We once again benefited from the collection of attrition and cancellation fees, but demonstrated that even as fee collection levels move back towards historical levels, we can maintain strong CCF Margins. In the year pricing continued to be a challenge due to competitive pressures.

However, we are confident that as the market turns, rates will follow suit, especially given our quality signature service that differentiates our brand and continues to compel our customers to return to our properties.”
At the property level, Gaylord Opryland generated revenue of $54.5 million in the third quarter of 2009, compared to $64.2 million for the same period a year ago. Third quarter revPAR decreased 12.1 percent to $94.69 compared to $107.73 in the same period last year, driven by a 7.9 percentage point decline in occupancy resulting from group cancellations and attrition. Total revPAR decreased 15.1 percent to $205.74 in the third quarter of 2009 compared to $242.24 in the prior-year quarter. CCF decreased 11.7 percent to $14.4 million for the third quarter, versus $16.3 million in the year-ago quarter due to the decline in room revenue and a resulting drop in food and beverage spending. This resulted in a CCF Margin performance in the third quarter of 26.4 percent, which is an increase of 100 basis points when compared to the third quarter of 2008. CCF in the third quarter of 2009 benefited from a continued focus on aggressive cost management and a $1.2 million adjustment for a decrease in property tax rates.

Gaylord Palms posted revenue of $30.4 million in the third quarter of 2009, a 13.1 percent decrease compared to $34.9 million in the prior-year quarter. Occupancy for the quarter was down 10.0 percentage points compared to the prior-year quarter due to group cancellations and attrition. Third quarter revPAR decreased 13.5 percent to $91.19 compared to $105.38 in the same quarter last year, largely driven by the decline in occupancy. Total revPAR decreased 13.1 percent to $234.75, due largely to decreased occupancy and the related impact on food and beverage revenue. CCF at the property was $5.7 million in the third quarter compared to $5.8 million in the prior-year quarter, resulting in a CCF Margin of 18.6 percent, which is an increase of 190 basis points when compared to the third quarter of 2008. CCF in the third quarter of 2009 benefited from the continued focus on aggressive management of costs.

Gaylord Texan revenue was $39.5 million in the third quarter of 2009, a decrease of 15.6 percent from $46.9 million in the prior-year quarter driven by a decline in Average Daily Rate and outside-the-room spending. Occupancy for the third quarter was flat compared to the prior-year quarter at 72.8 percent. RevPAR in the third quarter decreased 10.8 percent to $109.13 due to the decline in ADR. Total revPAR decreased 15.6 percent to $284.38 compared to $337.09 in the prior-year quarter. CCF decreased 15.6 percent to $10.9 million in the third quarter of 2009, compared to $12.9 million in the prior-year quarter, resulting in a 27.5 percent CCF Margin for the third quarter of 2009. CCF in the third quarter of 2009 benefited from the continued focus on aggressive management of costs.

Gaylord National generated revenue of $56 million in the third quarter of 2009, an increase of 0.6 percent from $55.7 million in the prior-year quarter. RevPAR in the third quarter decreased 2.5 percent to $122.68 compared to $125.80 in the prior-year quarter driven by a decline in ADR. Total revPAR increased 0.6 percent to $305.05 in the third quarter compared to $303.34 in the prior-year quarter. CCF increased 42.4 percent to $15.2 million in the third quarter of 2009 compared to $10.7 million in the prior-year quarter, resulting in a 27.2 percent CCF Margin, which is an increase of 800 basis points when compared to the third quarter of 2008. CCF in the third quarter of 2009 benefited from the continued focus on aggressive management of costs. “The Gaylord National once again performed well this quarter, delivering solid CCF results and profitability margins,” Reed said. “We continue to be pleased with the progress of this property as it builds momentum and improves its operational efficiencies.”

Gaylord Entertainment’s planned resort and convention hotel in Mesa, Ariz., remains in the very early stages of planning, and specific details of the property and budget have not yet been determined. In the current economic environment, the company anticipates that any expenditure associated with the project will not have a material financial impact in the near-term. Opry and Attractions segment revenue decreased 25.4 percent to $17.1 million in the third quarter of 2009, compared to $22.9 million in the year-ago quarter. The segment’s CCF decreased to $3.3 million in the third quarter of 2009 compared to $4.2 million in the prior-year quarter. Corporate and other operating loss totaled $15.0 million in the third quarter of 2009 compared to an operating loss of $13.8 million in the same period last year. Corporate and Other CCF in the third quarter increased 14.4 percent to a loss of $9.2 million compared to a loss of $10.7 million in the same period last year.

For the third quarter of 2009, the difference between corporate and other operating loss and corporate and other CCF was primarily due to depreciation and amortization expense and non-cash stock option expense, which included $3 million non-cash charge to recognize compensation expense related to the surrender of certain executives’ stock options. The remaining balance of the net proceeds from the sale may be used for general corporate purposes, which may include acquisitions, future development opportunities for new hotel properties, potential expansions or ongoing maintenance of the existing hotel properties, investments, or the repayment or refinancing of all or a portion of any outstanding indebtedness of Gaylord.

Gaylord Entertainment does not expect to update 2009 guidance before next quarter’s earnings release. However, the company said it may update its full business outlook or any portion thereof at any time for any reason. “We are encouraged by how our business has responded to the unprecedented economic challenges of the past year, as well as by the early signs of market stabilization,” Reed said. “Our leading indicators remain strong and we have been successful in implementing operational efficiencies, which has enabled us to deliver solid profitability metrics. We are currently tracking towards the higher end of our current guidance which remains unchanged and is outlined below.” For more information, visit www.gaylordentertainment.com.

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