A New Owner for Troubled Greenbrier

In January I posted about the struggles facing the historic Greenbrier Resort in West Virginia. Last Thursday, March 19th, the 231 year-old Greenbrier succumbed to the current recessionary pressures and filed for Chapter 11 bankruptcy protection. According to court records the resort has lost more than $90 million in the last five years including $35 million last year alone, though it's unclear if any of this loss is attributable to the extensive renovations done in 2006 and 2007.

The landmark property, which has hosted 26 Presidents and some noteworthy royals including Monaco's Prince Rainier and Princess Grace and the Duke and Duchess of Windsor, has been owned by the railroad CSX since 1910. According to a statement released simultaneously with the bankruptcy filing the Greenbrier Hotel Corporation said it has struck an agreement to sell the resort to Marriott, pending the bankruptcy court’s approval and contingent on its renegotiating labor contracts before the sale. Labor costs associated with union contracts have been but one major hurdle in recent years.

If the deal goes through Marriott would receive $50 million over two years from CSX Corp. to operate the resort. Marriott in turn would pay CSX between $60 million and $130 million within seven years, depending on timing and the hotel's financial performance. CSX would be cutting loose a n0n-core asset blamed for a 32 percent drop in CSX's fourth-quarter 2008 earnings.

Greenbrier Resort Struggling Despite Renovation

The historic Greenbrier Resort is the highest profile luxury resort property to be hit by the economic slump. CSX, the railroad company, which owns the Greenbrier engaged Goldman Sachs to explore options for the resort which lost $35 million in 2008; one can only assume one of the options being considered is sale of this National Historic landmark property. CSX itself is facing problems after seeing freight volume drop precipitiously on its lines. The resort includes multiple golf courses, fine dining restaurants, 721 guest rooms and suites as well as 96 guest and estate houses, and a 40,000-square-foot spa.

In addition to the economy management has had to deal with a difficult situation with the union ostensibly regarding the most recent layoff of 650 staff and a forced furlough in 2007 and talk of cutting healthcare and retirement bennefits.

Detailed photo of the front facade, notice the blue ceiling of the porte-cochere. A great southern detail in a very Draper shade.

For the design minded the resort was perhaps Dorothy Draper's crowning achievement. Her designs, in place for decades, introduced an American audience to a layering of fabrics (particulary oversized florals and stripes), mix of colors (greens and pinks), garden elements, chinoisserie, and the forever glamorous black and white checkerboard marble floors. In 2007 Draper's protege Carlton Varney worked on a $50 million renovation of the hotel. Freshening the hotel while preserving the Draper style.

A guestroom showing the vibrant color palette and mixtures of patterns.

Along with the refreshed decor came a relaxation of rules that had been in place since the resort opened including the requirement that men dress for dinner, and changes in the fee structure including the elimination of the "Modified American Plan" their version of the all-inclusive dining package.

The reception hall with all the Dorothy Draper hallmarks, including the large scale black and white checkerboard marble floor.

One of the most desperate attempts to restore the fortunes of the resort came in November 2008, when the resort pushed a ballot initiative to let the resort add casino gambling. The intiative passed, but so far no slot machines in the lobby.

A hall with oversized floral draperies and a wonderfully elaborate pediment in the distance. For fun count the colors.

Occupancy at the hotel as of the time of this post is around 100 on any given evening leaving over 600 empty rooms.

The upside in all of this? Great deals, in a quick perusal of their website they're offering $400 resort credits, spa packages, and free nights to lure in guests.