Resortquest International — Morgan Keegan, Inc. presentation (November 2003)
41 slides from Resortquest International's conference presentation, Nov 13, 2003
Slide 1: Gaylord Entertainment Presentation to Morgan Keegan, Inc.
Gaylord Entertainment Company Presentation to Morgan Keegan, Inc. November 13, 2003 ^ Nashville, Tennessee defined by our differences
Slide 2: Forward-looking statements disclaimer
The information contained in this slide presentation is summary information that is intended to be considered in the context of SEC filings and other public announcements made by Gaylord Entertainment (the "Company"), by press release or otherwise, from time to time. The Company undertakes no duty o
Slide 3: Overview of Gaylord Entertainment
Overview of Gaylord Entertainment
Slide 4: The new Gaylord
The new Gaylord Largest participant in the $10 billion vacation condominium and home rental properties market LTM PF(1) Revenues: $616.8 million LTM PF Adj. EBITDA (2) $85.0 million Leader in the $115 billion meetings segment (3) Total number of large group meetings is 24,000 per year (3) Attraction
Slide 5: Gaylord Hotels
GAYLORD HOTELS
Slide 6: Gaylord Hotels - overview
Gaylord Hotels - overview Gaylord Hotels is the only lodging brand focused solely on the large group meetings segment of the hospitality industry market estimated to be $115 billion (1) our core customers are meeting planners who service large groups (200+ peak room nights) We provide custom-tailore
Slide 7: Gaylord Hotels - product scale
Gaylord Hotels - product scale Guest rooms Convention & meeting space Restaurants Gaylord Opryland Nashville 2,881 600,000 sq. ft. 12 (1) Gaylord Palms Florida 1,406 400,000 sq. ft. 3 Gaylord Opryland Texas 1,511 400,000 sq. ft. 4 Our hotels are large and nationally-recognized. Unique entertainment
Slide 8: Gaylord Hotels - properties
Gaylord Hotels - properties Gaylord Hotels - properties Paint.Picture Gaylord Opryland Nashville Indoor atriums / entertainment Gaylord Palms State-of-the-art meeting facilities Gaylord Opryland Texas
Slide 9: Nashville attractions
Nashville attractions Nashville attractions
Slide 10: Large group meetings drive occupancy
Large group meetings drive occupancy The majority of Gaylord's customers consist of large group associations, trade shows, and corporate meetings Contracts provide for average daily rate, rooms occupied, and food and beverage needs, which leads to enhanced revenue visibility TOTAL ROOM NIGHTS Note:
Slide 11: Large meetings book 3-5 years in advance
Large meetings book 3-5 years in advance Long lead times provide great visibility and predictability to future periods Association Corporate Other Group Leisure Note: Information based on current bookings for all future periods CUSTOMER SEGMENTATION MEDIAN BOOKING WINDOW Excel.Chart.8
Slide 12: Target customer creates differentiation
2002 vs. 2001 RevPAR YOY% Change 1H 2003 vs. 1H 2002 RevPAR YOY% Change Target customer creates differentiation Target customer creates differentiation Gaylord has consistently outperformed the hospitality sector, demonstrating the strength of the business model and the unique characteristics of the
Slide 13: Target size: peak night of 600-2,000
Target size: Peak night of 600 - 2,000 The 24,000 Annual meetings with a peak between 600 - 2,000 roomnights represent 26 million roomnights Association business accounts for the lion's share of the roomnights in this size category # of Events # of Room Nights Associations 0.46 0.72 Corporate 0.54 0
Slide 14: Limited all-in-one place competition
Limited all-in-one place competition Limited all-in-one place competition U.S. COMPETITION - 92 HOTELS Gaylord's hotels are uniquely positioned against all other large hotels - Las Vegas included Gaylord owns 3 of the 6 hotels in the all-in-one place quadrant All-in-one Place All-in-one Place
Slide 15: Municipal competition
Municipal competition For the 1 - 2,000 peak roomnight meetings, meeting planners are often unsatisfied by the lack of a headquarters hotel, lack of "creature comfort amenities," lack of control over the total environment, and increased logistical issues at municipal properties COMPETITIVE LANDSCAPE
Slide 16: Gaylord Hotels - brand development
Gaylord Hotels - brand development Superior Product Superior Service Entertaining Environment Customers: Meeting Planners & Attendees Sustainable Advantage Brand Development Superior Knowledge & Relationships Target customer behavior drives our brand development
Slide 17: The core of our strategy
The core of our strategy The Service Profit Chain is the roadmap to our success Future growth and profitability begins with our Employees Empowering Employees = Greater Employee Satisfaction Satisfied Workforce = Loyal Workforce Loyal Workforce = Higher Productivity Higher Productivity = Greater Val
Slide 18: Customer satisfaction is improving
Customer satisfaction is improving... Customer and meeting planner satisfaction are measured by an outside firm Both have increased dramatically since 2002 Level I Payout $50 Financial Payout $50 Level II Payout $100 Level III Payout $150 Guest Satisfaction Program Initiated
Slide 19: Bookings and pipeline improving
Bookings and pipeline improving... Bookings in 2002 increased 73% over 2001 and surpassed 2000 levels As of September 30, 2003, bookings are up 20% over 2002 levels Tentative and prospect levels have increased and are at record levels Advanced Bookings for the Period of 2004-2005 Represent 37% of Ou
Slide 20: Multiple hotels will increase share
We believe multiple hotels will increase share... We are capitalizing on the rotational nature of our customer Multi-property room nights as a percentage of total Star account room nights Gaylord Hotel Rotation Bookings (1) ROTATION BOOKINGS Rotational bookings improving ... Rotational bookings impr
Slide 21: Gaylord Hotels - expansion
Gaylord Hotels - expansion Satisfaction = Loyalty = Rotation = Growth San Diego, CA Phoenix, AZ Dallas, TX Washington, D.C. Orlando, FL Nashville, TN Top convention markets* Existing site Under construction ? ? ? ? ? ? ? ? ? ? ? Los Angeles, CA Las Vegas, NV ? San Francisco, CA Chicago, IL Atlanta,
Slide 22: How do we gain a greater footprint?
How do we gain a greater footprint? We DO NOT commit to projects before financing is available We pursue projects that have a minimum financial criteria of a 12% unlevered after tax rate of return We recycle capital invested in our properties to fuel our growth We pursue development partnerships to
Slide 23: Grand Ole Opry
Slide 24: The opportunity
The opportunity The opportunity West 85% Midwest 89% South 83% Northeast 78% An American icon with a 75+ year heritage as the cornerstone of country music Opportunity to strategically position the brand and create greater brand elasticity 70 million "Country Lifestyle" consumers in the United States
Slide 25: Distribution is the key - growing familiarity
Distribution is the key - growing familiarity Cable Television (US) Reaches 25 million households Cable Television (Canada) Reaches 8 million households Terrestrial Radio (FM/AM) 205 stations; 2 million weekly consumers Terrestrial Radio (FM) 33 markets Terrestrial Radio (FM) Reaches 0.8 million con
Slide 26: Merchandising and licensing
Merchandising and licensing Entertainment Products Audio studio project with EMI Audio/Video projects of bluegrass, gospel, comedy, etc. Cracker Barrel distribution of audio product Branded Gibson musical instruments GOO touring show Lifestyle Products Outdoor lifestyle products distributed by Bass
Slide 27: ResortQuest
aK RESORTQUEST INTERNATIONAL RELAX.
Slide 28: ResortQuest International overview
ResortQuest International overview ResortQuest ("RZT') maintains the leading market position in the vacation property management industry - a $10 billion market(1) The only nationwide branded network of properties Manages over 20,000 rental properties Combined real estate value of more than $7 billi
Slide 29: ResortQuest acquisition rationale
ResortQuest acquisition rationale Provides competitive advantages in the property vacation management market via RZT's market leading position First mover advantage Immediate scale Industry experience Important customer relationships Significant growth opportunity with limited capital expenditures O
Slide 30: Gaylord customer interface
Gaylord customer interface The significant volume of customers associated with our various businesses gives us the ability to capitalize on tremendous cross-selling activity into ResortQuest properties. 19.1% ownership interest in company Large customer database (3 million) Customers generally have
Slide 31: Financial impact of brand maturity
Financial impact of brand maturity There is a significant opportunity for Adjusted EBITDA growth as market share escalates and margin improves. (1) Assumed for illustrative purposes. Analysis assumes the industry reaches $12 billion in gross lodging revenue over the next five years. (2) Potential RZ
Slide 32: Non-core assets
Non-core assets Bass Pro Shops Nashville Predators Various real estate 19.1% 12.8% Ownership
Slide 33: Vision for the future
Vision for the future AM, cable, satellite distribution complete FM distribution limited Limited product set 3 - 5 Years Tomorrow Today Non-Core 3 property platform Invested own capital to prove business model Significant real estate ownership Extensive customer relationships Non-Core Assets Monetiz
Slide 34: Overview of operating/financial metrics
Overview of operating/financial metrics
Slide 35: Adjusted EBITDA sensitivity
Adjusted EBITDA sensitivity 10,000 room nights = $1.5 1 occupancy point = $2.3 $1 ADR = $1.1 1% increase in Adj. EBITDA margin = $3.6 Note: Assumes only Palms and Opryland Nashville in operation. $150 average ADR, $150 F&B and other revenue, and 50% average margin. Adjusted EBITDA is sensitive to ch
Slide 36: Guidance
Guidance Gaylord Hotels FY2003 RevPAR 4% to 5% growth FY2003 Capex $230 to $240 million FY2004 RevPAR (1) estimated to be flat FY2005-07 RevPAR (1) high single-digit growth each year ResortQuest FY2003 revenue $150 - $155 million FY2003 Adj. EBITDA margin 12% range (1) Based on current booking trend
Slide 37: Gaylord financial reconciliation
Gaylord financial reconciliation $ in millions $ in millions
Slide 38: Gaylord financial reconciliation
Gaylord financial reconciliation $ in millions $ in millions
Slide 39: Adjusted EBITDA definition
Adjusted EBITDA (defined as earnings before interest, taxes, depreciation, amortization, pre- opening costs, non-cash lease and naming rights agreement expenses, as well as other unusual or non-recurring or non-cash items) is presented supplementally because the Company believes it allows for a more
Slide 40: Additional information about the merger
This communication is not a solicitation of a proxy from any security holder of Gaylord Entertainment Company or ResortQuest International, Inc. Gaylord and ResortQuest have filed a registration statement on Form S-4 with the SEC in connection with the merger. The Form S-4 contains a prospectus, a p
Slide 41: Gaylord Entertainment, ResortQuest, Grand Ole Opry logos
GAYLORD ENTERTAINMENT™ K RESORTQUEST . INTERNATIONAL GAYLORD HOTELS RELAX. GRANDOLE OPRY
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