Ryman Hospitality Properties saw operating profits fall 9 percent to $28.9 million from a year ago. Revenues for the quarter fell 3 percent to $245 million.
The company said hiccups related to the transition of its hotels and convention centers to Marriott International have hurt its results, as has general weakness in the group meeting sector. Year over year, Q2 occupancy at the company's hospitality properties fell to 73.9 percent from 76.8 percent while total revenue per available room dropped 4.4 percent to about $302.
in addition to the top-line shortfall, Ryman and Marriott also haven't been able to squeeze as many costs out of their transaction as they had expected.
The shortfall for the quarter led Chairman, President and CEO Colin Reed and his team to lower their guidance for both revenue and profits for the rest of this year. On a conference call with analysts and investors, Reed called the change to Marriott management "extraordinarily complex" and said his team has been in regular and lengthy talks with the hotel giant about addressing the transition's shortcomings.
Ryman and Marriott executives are responding by adding salespeople both on site and at higher levels. Reed expects it will take until October to ramp up regional sales offices but that 2014 advance bookings already look decent. They also are building up what they call a "hunter group" that will focus on groups that will bring more than 1,000 room nights to their meetings. That segment accounts for 40 percent of Ryman's bookings and Reed and Senior Vice President of Asset Management Patrick Chaffin said they want to ensure that short-term disruptions don't do lasting damage to the company's bookings in the coming years.
"We’ve turned this company upside down in the last six months," Reed said. "The good news is operator and owner are aligned on the plans of action to deal with these issues."
Shares of Ryman (Ticker: RHP) were down more than 4 percent to about $34.80 in mid-morning trading. Year to date, they're now down about 10 percent.
On his team's call with analysts, Reed said the level of attrition this summer at Ryman's hotels has at times reminded him of late 2008, "when the world was starting to fall apart." At the Gaylord Opryland Resort & Convention Center, occupancy for the quarter fell to 70.6 percent from 78.3 percent in 2012. Revenues at the complex fell 11 percent to $65.7 million and adjusted EBITDA $19.2 million from $24.0 million.
Also on the call, Reed said he is looking at leasing Ryman's headquarters building overlooking Briley Parkway as well as other additional cost savings.