The historic Greenbrier resort, which has hosted 26 presidents and once housed an underground bunker to shield Congress from nuclear attack, filed for bankruptcy Thursday after years of mounting losses worsened by intensifying labor disputes. The Greenbrier, which is wholly owned by the railroad company CSX Corp., announced a deal to be acquired by Marriott International Inc.
The sale to Marriott is contingent on the ability of the Greenbrier to negotiate labor contracts with its unions that are acceptable to Marriott. The deal is also subject to a court-supervised auction in which other qualified purchasers will be given the opportunity to bid on the Georgian-style luxury hotel.
“A sale to Marriott would be a great outcome for everyone associated with the Greenbrier,” said Michael Gordon, president of the resort.
In addition to presidents and members of Congress, the Greenbrier has hosted royalty, including the duke and duchess of Windsor and Monaco‘s Prince Rainier and Princess Grace. The Vanderbilts and Rockefellers were regular guests, and the Greenbrier’s place on the social circuit beckoned Bing Crosby, Judy Garland and countless other celebrities.
The Greenbrier, which is located in the Allegheny Mountains in southeastern West Virginia about 250 miles southwest of Washington, fell on hard times as a slump in luxury travel was aggravated by labor disputes. Recent pressure on banks that accepted aid from the government to avoid luxurious retreats hasn’t helped.
The hotel has lost more than $90 million during the past five years, including $35 million in 2008. Occupancy was just 33 percent last year.
The losses in recent months have accelerated, as revenues plunged from $2.7 million in January to $1 million in February. The Greenbrier lost nearly $9 million during the first two months of the year, court filings showed.
The hotel has been unable to reach a new agreement with its unions for more than a year. Meanwhile, union threats to strike the resort forced longtime visitors to change their plans. Greenbrier Chief Financial Officer Michael McGovern blamed the resort’s labor problems for $25 million in lost revenue last year, according to a document filed with the court. If the Greenbrier and the unions cannot come to terms, the resort will ask the court for relief.
According to papers filed with the court, CSX would provide Marriott with $50 million during the next two years to operate the 6,500-acre resort, which opened in 1778. Within the next seven years, Marriott would pay CSX between $60 million and $130 million, depending on the financial performance of the resort.
The underground bunker was built for Congress after President Eisenhower visited the Greenbrier in 1956. The Washington Post exposed the bunker in 1992, and it was decommissioned in 1995.