Ryman Hospitality Properties Inc (RHP) 2005 Q1 法說會逐字稿

Good morning, and welcome to the Gaylord Entertainment Company's First Quarter Earnings Conference Call. Hosting the call today from Gaylord Entertainment is Mr. Colin Reed, President and Chief Executive Officer, along with David Kloeppel, Chief Financial Officer; and Key Foster, Vice President, Investor Relation and Treasury.

This call will be available for the digital replay. The number is 973-341-3080, and the PIN number is 5942173. At this time, all participants have been placed on a listen-only mode, and the floor will be open for question, following the presentation. It is now my pleasure to turn the floor over to Carter Todd, General Counsel of Gaylord Entertainment.

Good morning, my name is Carter Todd, and I’m the General Counsel and Senior Vice President for Gaylord Entertainment Company. Thank you for joining us today on our first quarter 2005 earnings call.

You should be aware that this conference call may contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, including statements among others regarding Gaylord Entertainment expected future financial performance. For this purpose, any statements made during this call, that are not statements of historical fact, may be deemed to be into forward-looking statements. Without limiting the foregoing, words such as believes, anticipates, plans, expects, and similar expressions are intended to identify forward-looking statements.

You are hereby cautioned that these statements may be affected by the important factors, among others set forth in Gaylord Entertainment's filings with the Securities and Exchange Commission, and in it’s first quarter 2005 earnings release, and consequently, actual operations and results may differ materially from the results discussed or projected in the forward-looking statements. Gaylord Entertainment undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

I would also like to remind you that in our call today, we will discuss certain non-GAAP financial measures, and a reconciliation of those non-GAAP financial measures to the most directly comparable GAAP financial measures has been provided as an exhibit to our earnings release and is also available on our website under the Investor Relations section. At this time, I would like to turn the call over to our Chief Executive Officer, Colin Reed.

Thanks, Carter, and good morning, everyone. I would like to welcome back all of you who know us and acknowledge those investors joining us for the first time. Our first quarter was a record first quarter from a revenue and CCF perspective, since the company went public, and that’s an outstanding start for the year in all respects. Now, since Dave and I, and the new management team came to the company in 2001, we have been pretty clear about our hospitality strategy.

We have been telling shareholders basically every quarter that superior shareholders value will accrue as our workforce, and customers satisfaction levels increase. And the benefit of our advance booking start to show up. We also told you that our goal was to build a corporate group of convention and meeting customers, who would rotate through our properties experiencing both first class accommodations, and first class entertainment, and food and beverage service. We've told you that traditional RevPAR is important, but given the breadth of our offerings, total RevPAR, which includes high margins out of the room revenue from our customers is a critical measurement of our success. With these customers typically booking 2 to 4 years in advance, we told you, we would have good visibility on that business, and we will be able to manage the company for the long term, and invest the capital necessary to provide award winning experiences. And of course, we've told you that we were committed to creating long term shareholders value that would benefit all Gaylord Entertainment stockholders.

As we reflect on our record financial performance, we reported earlier today. I must [gratify] that we are starting to experience the results of these plans that we have worked so hard on over the past few years. As responsible brand builders and managers, we have spent the last four years creating lasting relationship with our customers, through the delivery of great service, executed by our wonderful workforce. Our goal has been to create extraordinary loyalty, and a brand halo that is so strong that customers seeks us out, irrespective of our competitors actions. We call these customers our high value loyal customers. These are satisfied customers, who return to our properties, and who utilize our food and beverage and entertainment facilities to enhance their stays. I will expand on this in a few moments.

Looking at the other major segment of that business, we posted a performance of ResortQuest that was pretty much what we had expected. We are hard at work, laying the foundation of the brand, that will create value in the future for it's guests, homeowners, and of course, you as stockholders. Now, I'll try to review each of the business segments. Dave, will -- our Chief Financial Officer, Dave Kloeppel will discuss the operating and financial performance of the company, provide guidance, and then as is usual, we'll open it up, the call for question.

As I mentioned, the first quarter was one characterized by strong operating results that highlight the underlying fundamental strength of that business model. Our hotel business was particularly profitable, where we generate 39.4 million in consolidated cash flow. Overall, our hospitality RevPAR was $109.64, and our total revenue per available room was $259.52, which was particularly strong. The proprietary systems, which we have developed over the last year, are allowing us to become much better at selecting the right customers, and overtime, this will drive superior growth and profitability. This focused analytical approach to brand building, allows us to identify these high value loyal customers, develop program that meet their needs, while delivering high margins to the company. Selecting the right customer is extremely important to our hospitality strategy. We have spoken in the past on the nature of our customers. They come to our hotels for the exceptional facilities and outstanding service, and they use that time to experience our other offers. This strategy is working very, very well. They are staying on the site to experience our restaurant, entertainment, and spa offerings, which is evidenced in our total RevPAR increases.

A big part of our drive to differentiate our customer experience through superior service offerings, is to provide a superb dining experience. I want to highlight a notable performance of our food and beverage operations at all three of our hotels, as they continue to win accolades. Most recently, the Palm's, the [Old Hickorage Steak] as to be precise received the prestigious DiRoNa Award of Excellence, a tribute to fine food and exemplary service. This is a significant award given by first class national organization. Our success in this regard is really a testament to long term efforts of our extremely knowledgeable and dynamic culinary staff.

Gaylord Palm's posted a recorded performance for this quarter in both occupancy and consolidated cash flow. All the more impressive, given this is a historical strong quarter for the property, occupancy for the quarter was very strong at 90.3%, compared to 87% last year. A shift to corporate groups in the quarters was responsible for a significant increase in food and beverage spending, which ultimately drove an increase in total RevPAR to $398.26 in the first quarter of 2005. This increase resulted in a record quarterly consolidated cash flow for the Palm's, and we are very pleased with this performance.

Gaylord Opryland also had a healthy increase in occupancy, up 8.6% compared to last quarter, and generating RevPAR of $86.96 in the first quarter of 2005, up 6.9% from last year. The increase in occupancy came from an increase in corporate groups, which again had a positive effect on total RevPAR, which grew substantially by 14.6% to $192.30 in the first quarter of 2005, compared to last year. This total RevPAR growth contributed significantly to Opryland's outstanding increase in CCF, up 45.3% to 9.8 million compared to last year. Over the course of the next 3 to 4 years, we'll be executing a room’s renovation at Gaylord Opryland, which will begin next month. We are also completing the 20,000 square foot luxury -- [Relax STAR] to open this summer, which we expect will enhance the destination appeal of the Nashville property, and further drive our total revenues.

Now the Gaylord Texan generated a RevPAR of $117, and total RevPAR of $297 in the first quarter of 2005, on an occupancy level of 69.4%. Overall, the first full year of operations of the Texan has been a great success. The feedback from meeting planners and guests has been consistently are positive about those property. Throughout it’s first year of operations, we have seen margin improvement in all areas of the property, each quarter better than the last, and we expect margins as the Texan to continue to mature over the next year. CCF was 10.4 million for the quarter, now just to put it in perspective that’s more than the two-thirds of the level achieved in the 9 operating months of 2004. To say, we hit the ground running is an understatement. For the first quarter of '05 as measured by Smith Travel Research, we had a 128% RevPAR index compared to the large convention hotels, we compete with in this region.

As for our newest project the Gaylord National, we are hard at work finalizing the detailed design, and we will commence work on the foundations in mid May. As we have said before, we expect to open the doors to this property in March of 2008. Gaylord National booked an additional 22,000 room nights in the first quarter of 2005, bringing the total net definite production for the property to a 135,000 room nights on the books. This year, in the first quarter, we booked fewer room nights than in the same period, last year, to be precise a 164,000, compared to 261,000, and this excludes Washington. However, those of you who have been on these calls, before will hopefully remember, that there is one other component to predicting -- to strengthen the future, which is mainly the tentative and prospects bookings, we currently have in our pipeline. And at the end of this first quarter, this pipeline of bookings in various stages of negotiations and inquiries is indeed very encouraging.

To put it in perspective, at the end of the first quarter, we were working on over a 100 -- over 3.7 million room nights. And therefore, its our view that we'll remain well on track to meet our annual booking guidance of 1.3 million to 1.4 million room nights. But, as we have said repeatedly, profitability is more tied to the quality of our future customers than to the quantity. In previous communications we've said, we believe that in '05, '06 and '07 we will drive high single digit RevPAR growth, and today we are confident that with our current pipeline and advance bookings, we will accomplish growth in this previously indicated range.

One other important metric is our rotational bookings number. Our strategy is to encourage corporate groups and associations to book in a rotational pattern within that group of properties. We view these rotational bookings on a trailing 12 month basis. By that measure 46.1% of large group bookings were rotational as of March 31 '05. A significant increase from the prior 12 month period, when the rotational bookings were healthy 40%. We've worked very closely with meeting client as to understand their needs, and to meet those needs through the design features, and amenities of our hotels. We believe that this one of the reasons, why many of these groups come back year-after-year, and take advantage of all of our existing hotels, which is evident in our rotational metric.

Now in this regard last week, we were informed by Meeting News Magazine that their subscribers, which are meeting planners and conference organizers has voted Gaylord hotels, the best hotel chain in the meetings industry. We are very pleased by this reorganization from our core customers, and I want to congratulate all of our STARS on this accomplishment. Again, this is a serious award given by a national publication, when the results come from their customers. Overall, our hotel brand continues to strengthen on all fronts, in the next couple of years, it should be really far.

Our ResortQuest segment results came in just as we expected. We had a good quarter demonstrated by a healthy revenue growth of 25.2% to 63.8 million compared to a year ago, with CCF also growing by 22% this quarter versus last year. 2005 will be a year of revenue growth for ResortQuest, and substantial investment in bringing the brand to fruition, and the first quarter was a good start to the year.

Our profitability margin was affected by our recent acquisition of East-West and our on going investment in ResortQuest brand. East-West has a majority of their properties located in the beach areas, which as expected are not in high demand in the winter months, and we built that assumption into our forecast. We do expect a stronger performance from East-West in the coming summer months.

Our most recent acquisition announced in April is the Aston Waikiki Beach Hotel in Honolulu, Hawaii. As we have said, this 107 million acquisition is subject to due diligence and our Board's approval. This transaction will allow Gaylord to participate in the reinvigoration of the Hawaiian Island, by securing an important asset in the ResortQuest portfolio. This purchased agreement guarantees that ResortQuest will continue to manage the units at the Aston Waikiki property for the foreseeable future. As we told you in the announcement, we plan to bring in a partner that will own the majority of the equity of the property, and negotiations are in at advanced stage with several interested parties.

As for our brand development of ResortQuest, we continue to work on the website development, the total satisfaction guarantee program, and the ResortQuest Enterprise Property Management System. We have made progress on that technology and website strategy, and we will expect to roll this out during the later part of 2005, and into early 2006. We continue to test the total satisfaction guarantee in additional market beyond the initial test sites of Utah and Hilton Head, where the feedback continues to be very positive, and the intent to return response from customers, who have been exposed to services guarantee, has been extremely high.

And now on to our attractions business. The first quarter is a seasonally slow period, but the Grand Ole Opry had a good quarter. We continue to remain exited about the growth prospects for this brand, particularly with our initiatives to extend its reach to new audiences. Our agreement with Cracker Barrel has gone well. We have successfully reached millions of Cracker Barrel guests in all of the 500 restaurants in 41 states. Now let me turn the call over to Dave, who'll walk you through the specific financial. Dave?

Thanks Colin. I will spend a few minutes describing the major drivers of our financial results for each business unit for the first quarter and then I will provide some guidance for ‘05. As Colin described in his comments this quarter demonstrates our strategy and the distinction between our hotels and our traditional hotel competition. As you will hear our results for the quarter, remember three key aspects of our business model. First, we book groups far advanced, locking them in the contract that provide us visibility and stability of earnings. Second we focus on high value loyal customers, who have a high outside the room spend level and we rotate that groups year-over-year. And third, with still our properties as a portfolio, rate performance and occupancy performance in any particular, in any particularly quarter is not as important to us a driving total yield which includes food and beverage spending for the entire portfolio.

As you look at our same store results, you I am sure noticed the trend that is in contrast what other hotel companies are reporting. RevPAR growth was driven by occupancy gain, while rate declined same what. This is evidence of our strategy. Each one of those I guess, as is stayed in our same store hotels, [operating in that and okay], on average spent nearly $330 per night at our property. The incremental profitability of additional guest in house drives our financial performance and that's why we are still focused on driving the right heads in the beds in our hotel.

This quarter was the result of our efforts to drive more occupancy into the hotels with higher value customers. On a same store basis the increase in occupancy at the palms in Opryland was driven largely by corporate groups. These groups we know have a high propensity to consume our F&B offerings and they did. In fact if you look at the results over 80% of the increase in same store total RevPAR growth in the first quarter of '05 came from food and beverage and other revenues. This quarter marks the fourth consecutive quarter that we've grown total RevPAR at a faster rate than we've grown RevPAR.

Texan also experienced a very strong quarter, the management team there produced departmental margin somewhere to palms in Opryland and for the fourth consecutive quarter generated a CCF margin increase. And we continue to be very bullish at the prospectus for this property. Our hospitality segment revenues was $142.5 million in the first quarter of '05 an increase of nearly 50% from the last years first quarter and a new record for the company. The increase was primarily a result of higher out side the room revenues and the inclusion of the taxes. Same store hospitality segment RevPAR and total RevPAR were $107.13 and $247.01 respectively in the first quarter of '05. Consolidated cash flow for the segment was $39.4 million for the first quarter compared to $25.8 million for the first quarter of 2004. Hospitality CCF margins increased from 27% in the first quarter of '04 to 27.7% in the first quarter of '05 due to higher occupancy in all of our hotels and also the inclusion of Texan.

And now on to ResortQuest. First quarter occupancy for resort quest increased 44 percentage point to 59.4% and ADR increased to $143.38 up from $129.12 in the first quarter of '04 and this excludes approximately 1200 units that were taken out of service due to the hurricanes in the second half of last year. This results from occupied room nights increasing from approximately 796,000 to 841,000 room nights and RevPAR increasing to $85.16 for the first quarter of '05, an 11.9% increase over the same period in ’04, once again excluding those units that are services due to hurricanes.

Totaling units under exclusive management increased to 19,325 for the first quarter and that includes approximately 2500 incremental units from our acquisitions earlier this year. For the first quarter of 2005, ResortQuest revenues were $63.8 million with an operating profit of 2.1 million. ResortQuest CCF was 5.9 million for the period. Operating attraction revenues were $12.9 million in the first quarter of ’05 compared to 12.6 million in the first quarter of ’04. Operating loss and the operating traction segment was 2.2 million in the first quarter of ’05 compared to 2.6 in the first quarter of ’04 and the segment had a CCF loss of $900,000 which is an improvement from the CCF loss of 1.3 million in the first quarter, the same period a year ago.

Increases in the CCF and the segment were driven primarily by the Grand Ole Opry and the Wildhorse Saloon located at Nashville, Tennessee. The corporate and other segment operating loss improved to a loss of 9.8 million compared to a loss of 11.4 million in the first quarter of ’04. Corporate and other CCF was a negative 7.9 million for the first quarter of ’05. As a reminder in February Gaylord negotiated a settlement with the National Hockey Club Limited, partnership -- the National Brothers Hockey Club that resolved the issue between the two organization. Starting in the second quarter of ’05 we will no longer include incorporate and other segment results expenses related to the Gaylord Entertainment center naming right with them. We are very pleased with the long term expense reduction emanating from this settlement.

After that was taken Bass Pro for the quarter ended March 31, '05, Gaylord equity income from the investment was approximately $1.5 million. Bass Pro currently operates 26 stores and have stated that they plan to add 16 more over the coming 2 years. As of March 31, 2005, the company had debt outstanding of $580.9 million and total unrestricted and restricted cash and short term investments of $86.5 million. Capital expenditures for the quarter were $64.1 million with $20.2 million attributable to Gaylord National and $25.6 million to the previously announced ResortQuest acquisitions.

The first quarter was an outstanding start to our year. Our strong financial performance from the hospitality segment and the continued strength and group pick up in transient business that our hotels should position us to further drive revenues for the balance of the year. We are increasing our total RevPAR annual growth range for the full year of 2005 to 9% to 11%. Given our hotel's ability to capitalize on increased operating leverage due to a larger contribution of outside the room revenues, we are also increasing our hospitality segment CCF guidance range to $135 to $142million which implies CCF growth of between 24% and 31% over 2004 levels. Our annual RevPAR growth guidance however remains the same at 7% to 9% growth.

For ResortQuest 2005 will be a transition year, from turnaround to growth. And we expect to grow revenues approximately 20% through acquisition and more effective and more extensive marketing than in the years past. And barring any lingering impact to the appeal of Florida as a destination as a result of last seasons hurricane, we expect CCF to grow to $20 million to $25 million.

Finally given the strength about hospitality segment, we are increasing our overall company consolidated cash flow, annual guidance range to the range of $132 million to $142 million which represents an increase of 42% to 53% over levels produced last year. Finally capital expenditures are expected to be up approximately $189 for the full year of '05 which includes approximately 72 million to 74 million for the Gaylord National Resort, located in [inaudible] and the previously announced acquisition of ResortQuest. And now I would like to turn the call back over to Colin.

Thanks Dave. I think pretty good quarter and Jackie, why don’t we now open up the calls for questions please.

Thank you. This floor is now open for questions. If you do have a question please press "*" on your touchtone telephone. If at any point your question has been answered, you may remove yourself by using the pound key. We do ask that if you are on a speaker phone, to please pick up your handset to provide optimum sound quality. Once again for any questions, please press "*" "1" at this time. Your first question is from George Smith of Davenport.

Good morning. I had a question pertaining to your national, it seems that Texan is ramping very nicely and I want to make you and everyone feel better about prospects for National and I am wondering if you think given that property's superior locations, you think we should -- I know it’s long ways up, but expected to ramp just as quickly as not more quickly and it’s not allowing that, that would seem that would be the case.

George, this is Colin. Good Morning. Thank you fro the question. I think we would agree with the implied statement in that question. And the reason I say that is that I mentioned that we actually confected 22,000 hard bookings in the first quarter but what I didn’t say in the script but I am happy to in the response to your question is that we have almost 0.5 million tentative and prospect that we are working on as well, so with only being effectively showing the pictures of this thing -- of this property for the last 3 to 4 month and judging by what we think the consumers reaction to this we are pretty excited about this property. The other thing that the -- the Washington Hotel will benefit from is from the point of announcement to the point of opening there won't be this sort of saturating in the middle. We had that with that Texan if you recall, we shot the project down, we said we are not sure when we are going to open it, after September 11th we did this. And then mid 2002 we came back and said we are going to be opening it early 2004. and that caused sort of a little bit of a hiatus on the booking pattern. But we are getting very confident of this National project as everyday goes by and by the way the way we reconfigured the deal if it opens to our expectations, this project will have a much higher rate of return for our shareholders than the tax indeed because that was the projects that had been committed to by and large before this management team had gone into the saddle. But we are looking forward to the Washington National, very high consumer interest in this project and we think it's going to run pretty well.

Okay. And then there was one request, how many units did you take out during the quarter?

Dave, do you know that figure handy.

I don’t have it handy, George. I don’t think there was a material number of the unit that came out of the system, I think it was probably below 200 but we can that answer back to you.

Okay.

And George most of those units that we want -- most of those units are units we want out and the other issue in the business is sort of -- it's double edged sword for us and that is that because of the tremendous escalation in condo prices, particularly in the Southwest Florida markets. There is a little bit of a turn in some of these condos, people are harvesting tremendous gains, now but that's the bad news. There is potential for few of those living the system, and the good news is that for all those condos we'd sell. So, it's a very dynamic market down but overall that market continues to, we believe strengthen.

And do you guys jumped over Texan have a idea of what you would expect to be a target CCF margin or something that's achievable within lets say 12 to 24 months, I don’t want to say a peak run rate but is 30% achievable over a year?

George this Dave. I think what we've described I think on the Texan and it's performance is that as we think about getting towards 2007 we should start to achieve towards those kinds of margin levels but I think what we are trying to guide people toward is expect kind of low to mid 20's margin for ‘05, kind of high 20's for ‘06 and towards 30 for '07.

Thanks a lot and have good day.

Thanks George.

Thank you. Your next question is from Jeff Donnelly of Wachovia Securities.

Good morning guys. I apologize, just I didn't catch when you had mentioned it but specifically did you disclose what the advanced bookings look like for Gaylord National.

Yes, we have about --

135,000

135,000 room nights booked and we have working currently almost a 0.5 million in tentative and prospects.

That's great. And then you guys have mentioned in past, that you are looking to announce at some of point of a fifth side, I am curious have you guys done any work to quantify the benefit that you can accrue from a fifth side, nearly in different region that would come from you, that is capturing more, meeting revenues from your existing customers, you have now but that you may rely on another provider for that geography as well as just regional group, right now for who don't Gaylord product that is convenient to them.

Yes

And what does that look like?

Well we are not, I mean it depends on where it is, I think as, here's the way to think about it Jeff. There are 24000 -- you have heard us say this before there are 24000 of these large groups of which 80% rotate and what we have done in our analysis in our communication with meeting planners we have a high sense of where they rotate to. And so, they go to different markets and so our ability to capture rotational bookings into a market will be pretty consistent, we'll be able to do that because we have these great relationships with meeting planners that one year in our facility on the east side and next year they go to the west side or wherever it maybe. So it is really market specific but the good news because of the way we are building our business as a brand, as a system where we have a singular relationship with the customer, we believe that we can induce demand into markets where we subsequently go. I think we are seeing that in the space in Texas right now.

Any greater sense on just specific markets you guys are looking at or -- ?

We can't do that and the reason we can’t do it is because when it will I think scare the living daylights out of our competitors, and we want to not to do this under the right upstream, we want to have any discussions we may or may not be having or will have. We want to do in a sort of a [cloak] of confidentiality and do this thing in a very appropriate way. And that’s what our approach will be. And at the time we have something to say, we’ll obviously let you know.

I understand and I guess maybe in that same lineage, I have seen some reports in local papers that you guys might be looking to expend the Gaylord Palms. Are there any updates you can provide there, or is it too early?

Well we can -- I can give you what we have proposed, the issue is with the palms and I think this is pretty consistent information on it. The palms is performing pretty well and getting stronger but the palms right now is generating just over $40 million on our 425ish million investments. It's not exactly blowing it out of the path, but what we have gone on proposed to the county, there has been another proposal that's sort of been churning around venom in the county for the last two years for the counting bonds, half of the county to effectively build a convention centre hotel in the county. What we've gone back and tell to them, okay, why don't we double the size of our convention center and take it to almost a million gross with the 650 to 700,000 net square feet. You build that and we’ll build an additional 500 rooms and all that's 400 rooms, I beg your pardon, thanks Dave, 400 rooms. And in entertainment in the facility, that's what we have proposed. It will be a decent return for our shareholders and really determine our side to be the place where conventions are carried of the other county. And that's what we have proposed and we are in the process of sort of working that through the city process and hopefully, over the next month we will know one way or the other whether this if they are saying us, please don't come. If it doesn't, then we will look to create value at the next location somewhere else.

And when you said you had returns, you think its over your hurdle of I think it's 12% from that or -- ?

Our internal threshold that we will not communicate with Board at below is that we want to generate an after-tax unleveraged, [IRR] of tweleveish percent and if its not north of that we won't do those deals. So you can do the math. That's an implied cash on cash in the high teens.

Okay. Thanks guys.

Thank you.

Thank you. Your next question is from Nap Overton of Morgan Keegan.

Good morning. Could you talk a little bit about the -- do you have any information on ResortQuest's results excluding the acquisition that you just made? Were you up-down side, whereas excluding the impact of the acquisition in the first quarter?

The net impact of the acquisition, Nap in the first quarter was about $0.5 million of CCF to us, as what we bought was primarily businesses that were kind of half in the mountains, half at the beach. So the loss at the beach was offset by or the gains at mountains was offset by the loss at the beach somewhat, that obviously, that mix shifts pretty significantly as we enter the summer time, and start capitalizing on market like Hilton Head and Utah, and things like that in the East-West acquisition.

Okay. And you mentioned, a room renovation over the next 3 to 4 years, I believe, or 2 to 3 years, at Opryland -- at the Opryland Hotel, can you give us an estimate of the cost of that? Remind us, what you consider to be your own going maintenance capital expenditures on an annualized basis?

Sure thing, Nap. The CapEx guidance that we gave earlier this year, and that we reiterated on this call have contemplated the room remuneration program to be ongoing. It’s going to be about a 3 year program, about 10 to -- between $10 million and $14 million a year, each year for next three years. We'll have renovated each room in the entire hotel, and this is a full, you know, great -- carpets, soft goods, hard goods, [inaudible] in each bathrooms, kind of renovation to bring that property to the next level of quality. And maintenance level of CapEx for the company across the board is about $30 million to $35 million.

Okay, and lets see in addition to the potential expansion there, and at the Palm's that you have early talked, you have had plans for nightclub, add-on the point there at Texas hotel, where does that stand right now?

Nap, this is Colin. Good morning. We haven’t started that just yet. We are also looking at another internal opportunity to replicate that nightclub at a substantially less level of capital, and we are obviously delighted with the experience, we are seeing in the Texan station, the sports center we have there, and we have a large area below that, that we think, we can utilize very effectively. And we are just -- we are working that through right now, so I think you need to give us about another 4 weeks before we can be clear about, whether we do or don’t do point, whether we do or don’t do this internal development that I just referenced.

Yeah. I mean, Nap, part of the analysis that we are undertaking internally is, you know, there has been such a huge positive reception for the Texan, from both locals and the meeting planners that we really need to make sure that we fully assess how we maximize the value of that size, every inch of it. And so, as Colin said, that’s why we're kind of reviewing all our plans around the site, to make sure that as we think about capitalizing on this demand that we get, we are doing it in the way that most benefit our shareholders.

Okay. And then one final question. The RevPAR guidance that you have given, with the maximum reference to the quarter, should investors expect RevPAR growth of 7 to 9% in each of the next 3 quarters, through out remainder of the year, or is there a flavor to that pattern?

It will be a little stronger towards the fourth quarter than it is in the second and third. So, you should expect a little above the range, second quarter, probably a little in the middle to he bottom end of range in third quarter, and to the top end of the range in fourth quarter. And Nap, I know, you know, this for the sake of everybody else on, remember that, unlike quite a large chunk of the hotel business, our customers don’t book today for months time, our customers booked 2, 3, 4 year ago, and so a lot of the business that’s going to be turning up in our hotels is over the next few months with deals that we've contracted 2, 3, 4 years ago.

Correct. Thank you very much.

Thank you.

Thank you. Your next question come from Samir Jain of Jefferies and Company.

Hey guys. A question on the cooperate savings, again from the removable of the naming rights, and how much is that going to be again?

It's a total of about $3 million a year for the next 17 years.

And you said that going to begin impacting numbers, next quarter?

Yes. Perhaps.

Okay. And now in ResortQuest, can you give me any more color in terms of the acquisition market, right now. I mean, is it still as strong as you guys had previously mentioned, and are you pretty confident that you can increase the units under management, and either are there certain goal, I should modeling out?

Samir, good morning.

Hi.

This is Colin. The answer is we believe there are a lot of opportunities to add units. The issues for us is that we wanted to two things in this company, with this business. Number one, we want to make sure that every operating business that we operate and we operate -- what in 30 market, David? -- has the complete skill set, and where with also receive this new technology that we are in the process of building. This new, what we believe will be radical technology, unseen in the property vacation management industry that will basically allow us to aggregate every single piece of inventory, and connect it to the global distribution systems. And so we are taking a cautious approach to adding new units through acquisition during the course of the next 12 months, until we are at the point, where we believe that we have operational excellence everywhere. Now, you will see us through the course of this year, still in some markets, and those markets that we do that in are market's that we absolutely believe we have the complete skill set, and where with all to receive those units, integrate those units, and obviously create real returns for our shareholders on that. I suspect that as the technology rolls out, towards the later part of this year, early part of next year, we get that done well, flawlessly, that this is big integration process. Then I think, we are going see real unit growth through the course of '06 and '07, that's our sort of 30,000 for game plan here.

Okay. So if I understand right, then just sort of here on cautious side, I should take this 90, -- you know, and change unit 90,000 and change unit count in sort of flat line it for the rest of the year.

I wouldn’t say that. I wouldn’t say that, but we are not predicting growth in the units at this stage, but --

Okay.

But, there maybe -- there will be some opportunities for us to grow in selective markets. You will probably see selected market growth through this year, but it wont be at a furious pace.

Okay. Okay. And then, you guys, sort of touched of something that I thought was quite interesting, when you were mentioning, how condo sales are sort of impacting ResortQuest, and I was wondering, how can you capitalize on that and do you sort of have a plan to do that because, I mean, we know, that condos are sort of all the rage right now, you know, and to a certain extent timeshare as well, with such a large footprint of units, you know, how do you think, you guys are going to capitalize on that, and are you sort of strategically outlining any plans to do so?

We -- you’ll hear more about that during the course of the next 3 to 6 months. This is something that is very dangerous to us. We have given this a lot of consideration and there is some thoughts that we have about how we can play in that game and I really don’t want to, if we could count on this a little bit longer, I don’t want to get sort of laying out and signaling as that is what we want to do, on this. But this is an opportunity we think both to put see capital in these condo development buildings to for real estate side to manage the sale of these condos and then for us to control these condos in the property management side. But the issue for us is how much capital if any do we put at this in order for us to share in the capital gain, that takes place between the time on conceptualized with the condo development and then actually sell that which is rather short. But we like this business and we are trying to figure out a way we do it that generates real high returns.

Okay, so it’s definitely on the radar?

Yes.

Okay good. Thanks.

Thank you. Your next question is from Will Marks of JMP Securities.

Thank you. Good morning Colin and Dave.

Hi Will.

Just a couple of pretty quick things, on CapEx did you mentioned what you had spend to date at the Gaylord National?

To date on Gaylord National it's about $20 million.

Okay, and at this point what is the expectation of what you’re going to spend and the offset by any public funding?

Total for the national?

Yes.

Our estimate is currently still the same as we’ve talked about previously. The -- its kind of five hundred-ish million of total capital, fund pre-opening and capitalized interest and then we take away the net $100 million of benefit that the county will give us.

And do you remember that Will, there is another piece of that where we get an ongoing marketing fee for how many years David?

30 years.

30 years of $2 million a year as well, so we have had a good adjacent in here by the county.

Okay, what is that marketing because I know you've you mentioned that, just clarify?

We get a marketing reimbursement from the county from the time we open for the first 30 years, equals to about $2 million a year that offsets our marketing costs [inaudible] markets the destination of Gaylord National and Prince George's County.

Okay. And the $180 million of CapEx, I am sorry, is that in the next nine months or is that the full year?

That's full year.

Okay, and then the 72 to 74 for Gaylord National full year as well?

You got it correct.

Okay. Anything on Bass in terms of forecast, can you just tell us what you've said in the past or any update you gave us the number of the quarter as a million and a half?

Yeah, no real change on that product shots, I mean we still are very bullish on the business model. They continue to have wonderful development opportunities before them seemingly each and everyday. I think as we talked about they intend to add 16 stores in the next 2 years which grows their store base by two thirds. So again we are very bullish on the prospects for the company.

Is that a particularly seasonal business? I am just trying to figure out how that 1.5 million will play out in the full year?

Yes it is seasonal. In the second half be stronger than the first half because you have fall hunting season and you have Christmas. So, you tend to have much more income in the second half than the first half.

Okay. And just one last question on, there was some news, a few months now but on one of the Marriott, the larger Marriott's in your Orlando market, adding some conventional space, if they are moving ahead with that and any thoughts on how that will impact you?

I suspect you are going to see 2 or 3 of our competitors doing something with their conventions pricing at market because they, they are panicking a little bit about what we are doing to them but we know the Marriott, the big will turn is adding is not, I don’t know whether it’s actually open yet but it is adding a convention a piece of -- a convention space down there but, the issue for us is, our competitors can do, obviously what they like, our goal is to continue to keep these levels of satisfaction up meteoric heights and keep this -- keep signing these customers and bringing them back and that’s what's going on. Our bookings of the palms last year was extraordinarily strong, continues to be strong, we continue to see tremendous interest in this product and that’s what gave us the, the confidence that we can, double the size for meeting space with the county's money if they are prepared to do that and add more hotel rooms and generate very high returns for our shareholders.

Great. Thank, Colin and Dave.

Thank you Will.

Well one more question please and then any further questions can be referred to telephonically, Key or Dave and if you want to talk to me you can.

Thank you, your final question is from David Katz of CIBC World Markets.

Good morning. Guys, it sounds like there may be a cut. Just quickly on the Hawaii perspective acquisition, have you sort of disclosed how profitable the hotel is, I guess to the end of trying to get a sense of what kind of multiple that price is.

David, this is David myself. We have not disclosed that as we have described our intent there is to be a minority equity partner in the business and a manager of the property and as Colin described in his comments we are in quite advanced discussions with a couple -- some interested parties and certainly hope to be announcing something fairly soon.

And when we announce we will obviously articulate the impact to us in terms of management fees and likes. So, David we wouldn’t be doing this deal if we didn’t think it was a very good deal for our shareholders.

Great. Just one more quick one if I may. And I apologies if you commented on this already but have you updated us on your progress as far as west cost location.

Well we haven’t. If you were on, you'd have heard us say, we are not talking about locations. We are actually doing work on and looking and we have done a lot of conceptual work talking to our customers as to where they want to go and we are going to bring those to things together where they want to go and the communities that are trying to embrace us and explore and when we have something to say we will say.

Understood. Thanks so much. Great quarter.

Thank you very much indeed.

Thanks David.

Alright, thank you Jackie.

You are welcome.

And thank you for everybody for joining us and any further questions please feel free to call David or Key and or myself. And look forward to speaking with you all soon. Thank you very much.

This does conclude today’s teleconference. You may now disconnect your line. And have a wonderful day.