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CONF CALL 

  • CEO Colin Reed citing strong group and transient demand, which led to record setting Q2. A common theme being reiterated by hotel operators 
  • EBITDA margin growth of 160bps, to 34.5%, best hotel margin they have ever reported. Best EBITDA margins since the opening of Gaylord National 
  • Tough comps to blame for the soft RevPAR
    • Same Store RevPAR +3.1% YoY 
    • Same Store total RevPAR +4.5% YoY
    • Hospitality revenue +4.5% YoY
  • Boosting dividend by $0.05 to $0.70 p/s for Q3 2015, and annual dividend to $2.70 p/s, a 23% increase YoY
  • Volatility in the peer group and within their own stock. Discusses how RevPAR revisions added to that group wide. 
  • The cycle? Business is in good shape, not experiencing a systemic slow down. 
  • High confidence for the future
  • Business operating better than ever as show in the total revenue numbers
  • Best Q2 revenues, better than Q2 2008, their all time high. 
  • Bookings appeared down for Q2? 530K gross room nights booked, compared to 640K in 2014. 
  • Very tough comp, which led to YoY decline 
  • Production still over 3,4,5 year averages
  • +145K more room nights booked for 2016, up roughly 10% YoY
  • 2016 is looking to be a very strong year based on these booking numbers 
  • Booked 130k gross room nights in July vs. 82K last year
  • Negatives, only real threat is supply or companies like Airbnb, but they do not see supply as a real threat. They do not see Airbnb as comp. Their guests are big groups and serve a different experience.  
  • Very good time to be in the group booking business. High demand and limited supply growth. 
  • Gaylord Opryland rev up 9%, best single Q in EBITDA margins ever roughly 38%
  • Accelerated room renovations, will finish all in Q3. Will hurt Q3, but will be very good for Q4 and 2016. 
  • Gaylord National suffered a little due to tough comps from 2014, and a large group cancellation.
  • Expanding outdoor meeting space and ballroom, should help establish property on the east coast
  • AC hotel performing very well. $1 million contribution to EBITDA
  • Gaylord Texan +25% increase in adjusted EBITDA
  • room renovation completion last year has really helped its perfomance. on track for a record year
  • Gaylord Palms performing very solidly as well. Q3 will challenging due to the fall of Jewish holidays. Q4 looking very strong. 
  • Q3 tracking to be better than last year based on group bookings. 
  • Total group production 2.1-2.3 million room nights for 2015, forecast 
  • Entertainment business - continued growth, expanding and developing new content is the goal. have engaged consultants to help grow this segment. tough to be more specific than that. 
  • Attrition up due to a couple group cancellations, not a systemic slow down. 
  • No debt maturities till 2016. Reduced exposure to floating rate debt going forward. 
  • Guidance down, RevPAR trimmed. Due to challenging calendar and room renovations the main reasons for these adjustments but Q4 should be very strong. As a result they are not adjusting overall profitability guidance for FY2015. 
  • BS/CF in great shape, looking to continue growing the dividend. 

Q & A 

Consultants for the entertainment business? Plans to sell/spin the business off? 

  • No, not yet. These are plans to make it better. Will revisit plans after the consultant advises what changes need to be made.

Booking window lengthening or shortening? What are meeting planners doing?

  • +145K more room nights booked for 2016 vs. last year booking into 2015. For group bookings into next year relative to last year, a big increase
  • Meeting planners, corp segment seeing huge growth. 
  • Booking windows remain the same. But groups increasing outside the room spend.
  • Seeing good last minute bookings, especially from the pharma industry
  • Outside the room spend seen offsetting declining RevPAR. But RevPAR should bounce back in Q4, due to more transient and group booking still left to made. 
  • Continue to reiterate how strong 2016 is shaping up to be. 

Where are the rates on the group bookings for 2016? 

  • Modest increase. But, due to the clientele outside of the room spend should be strong. 

Issues in Texas or energy areas? Is that the attrition you witnessed? 

  • No, it was groups "getting ahead of themselves and having to cancel"
  • No weakness due to energy groups. Gaylord Texan had a good Q. 

Thoughts on renovations?

  • Trying to do them in short bursts. Has temporary effects, but has historically shown good things for future rate growth. 
  • Renovation puts roughly 18K room nights out of order. 

Did you have to turn away groups due to the Opryland renovation? 

  • Yes, but we made sure it was smaller groups. And made sure this was the best time to do the renovation. August just happens to be the best month for that. 

Anything that city leaders are doing to drive for tourism for Nashville?

  • City leaders are very committed to improving the appeal
  • Problem the city is having, is that they are creating so much demand, and the infrastructure will need to catch up to accommodate that.  
  • But for now the demand is very strong and healthy

Weakness in DC?

  • Not seeing a weakness at Gaylord National. Q3 should be strong. Not seeing issues. 

Oil and Gas group is how much of your business?

  • Work hard to diversify. Probably less than 5%. Not an issue. Have many large groups to pull from. 

Bookings to decelerate going into 2H of 2015? 

  • Should see some but not much, still some available inventory. Q1,Q2,Q3 2016 are looking very good.