Group 29-Marriott International%2c Inc. (Final)

7/23/2019 Group 29-Marriott International%2c Inc. (Final)

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School of Tourism

Assignment 1 Cover Sheet For Report

STRATEGIC ANALYSIS OF A CO!ANY "Group #or$%

Group Number and Name of Company: Group 29: Marriott International, Inc.

Student names:

Chanunya oontosan! i"#"$21#Min! %uo i"#$#21"&atti'an San!thon! i"#92($2)ao *han! i"#$"++

-ro!ramme: Masters rame/or' 0eel: M

nit Name: usiness inance and Strate!y nit 3utors: N&, 4S, M5C

6ssi!nment Mar'er: S7M5C7N&

5ate 5ue: 1$7172+1( 5ate Submitted: 127172+1(

5eclaration:

I hae read and understand the niersity8s re!ulations on assessment offences.

I confirm that the piece of /or' submitted is to be re!arded as the final and complete ersion of this assi!nment.

3h ' b itt d i ti l ' h I h f d t th ' f th it i f ll d



3h ' b itt d i ti l ' h I h f d t th ' f th it i f ll d

E&ecutive Summ'r(

Marriott International, Inc. /as founded by 4.. Marriott in 192" /hich is no/ a runnin!

family business. 3he report focuses on the analysis of Marriott in terms of recommendin! the

future inestment for potential shareholders. Internal factors /hich consists of core competence,

alue chain, isionary mana!ement policy, sta'eholders, and stron! economies of scales. 6lso,

eternal factors hae been monitored in arious areas such as mar'et share, mar'et ! ro/th,

competitor analysis and competitie adanta!e. Marriott has been a !lobal a leader in thehospitality industry and in a stron! financial position in terms of control oer a balance sheet.

6lthou!h the li;uidity ratios are not as hi!h compared to competitors, they hae been able to

!enerate the hi!hest reenue. 3his /as due to Marriott focus on asset li!ht strate!y and driin!

incremental reenue by cuttin! costs at the property leel and etend their epansion into the

mid leel hotel se!ments to ta'e adanta!e of the industry8s fastest !ro/in! population. ith the

positie company performance, inestors /ill be assured they /ill achiee profitable return on

their inestment at the end of each period.



T')le of Contents

-a!e

0ist of i!ures <

0ist of 3ables (

0ist of =;uations #

0ist of 6bbreiations "

0ist of 0imitations

Strate!ic 6nalysis of Marriott International, Inc.1. usiness >erie/

1.1 Company >erie/ ?)ao@ 91.2 0eadership Style ?Min! and Chanunya@ 9

2. Internal 6nalysis

2.1 S>3 6nalysis ?Min! , Chanunya, and &atti'an@ 1+2.2 Core Competence: Aalue Chain ?Min!@ 112.$ CG Matri ?Min!, Chanunya and &atti'an@ 112.< =conomies of Scale ?Chanunya@ 1$2.( Sta'eholder ?Min! and Chanunya@ 1<2.# Corporate Social &esponsibility ?Chanunya@ 1(

$. =ternal 6nalysis$.1 -=S3 6nalysis ?Chanunya@ 1#$.2 -orter ie orces 6nalysis ?Chanunya@ 1"$.$ Mar'et 6nalysis ?)ao@

$ $ 1 3 M ' 2+



<.2.2. =arnin! efore Interest and 3a ?=I3@ 2<.$. 6ailable 5aily &ate, &e-6& and >ccupancy 29

<.<. 6sset Mana!ement $1<.<.1. Cash and Cash =;uialent $2

<.(. 0i;uidity $<<.(.1. Current &atio<.(.2. Duic' &atio

<.#. 5ebt to =;uity $#<.". &eturn >n Capital =mployed ?&>C=@ $"<.. =arnin! per share $

<.9. 5iidend per share $<.1+. Marriott International Share -erformance $9

*+ &ecommendation ?)ao, &atti'an and Chanunya@ <+

&eferences <1

Group Meetin! 6ction -lan and -ro!ress <"



List of Figures

i!ure 1: Marriott International, Inc 1 rands.

i!ure 2: S>3 6nalysis of Marriott International, Inc.

i!ure $: Marriott in CG matri in comparison /ith competitors

i!ure <: Marriott in CG matri in comparison of four business se!ments

i!ure (: Se!ment &eenue from )ear 2+11 E 2+1$

i!ure #: 3he table of -=S3 6nalysis of Marriott International, Inc

i!ure ": -orter8s ie orces

i!ure : Marriott International and %ilton orld/ide %oldin!s fie years reenue.

i!ure 9: Marriott International fie years reenue in fie se!ments

i!ure 1+: Marriott International Net Income, =I3 and =3

i!ure 11: Marriott International 6ailable 5aily &ate and &e-6& 2++9F2+1$.

i!ure 12: Marriott International %otel8s >ccupancy rates.

i!ure 1$: Marriott International 3otal 6ssets

i!ure 1<: Marriott International 6sset 3urnoer and &>36

i!ure 1(: Marriott International Cash and Cash =;uialent in comparison to competitors.i!ure 1#: Marriott International Current 6sset in comparison /ith competitors.

i!ure 1": Marriott International Current &atio in comparison /ith competitors.



List of T')les

3able 1: Main mar'ets across continents of Marriott International, Inc. in 2+1$

3able 2: Mar'et share of Marriott from 2++9 to 2+1$

3able $: &e!ional presence of Marriott from 2+12 to 2+1$

3able <: %ilton orld/ide and Marriott International E Competitie 5ifferentiation



List of E,u'tion

Fin'nci'l C'lcul'tion E,u'tions

Asset Turnover &eenue76era!e total assets

Aver'ge Tot'l Assets 3otal 6ssets ?Current year@ 3otal 6ssets ?preious year@ 7 2

C'pit'l Emplo(e- ?Capital =mployedH e;uity non current liabilities

Current Assets Current 6ssets 7 Current 0iabilities ?@

.e)t to E,uit( 3otal 0iabilities 7 Shareholders =;uity

.ivi-en- !er Sh'reSum of diidends E Special, one time diidends 7 Share outstandin! for

the period

E'rning !er Sh're Net Income E 5iidends on -referred Stoc' 7 6era!e >utstandin! Shares

E/IT &eenue E >peratin! =penses Non >peratin! Income

E/T &eenue E =penses ?ecludin! ta@

Gross !rofit Sales &eenue E cost of !oods sold

Net !rofit Gross profit E =penses, Interests, 3aes

Net !rofit 'rgin Net -rofit 7 3otal &eenue 1++? @

Occup'nc( R'te nits &ented >ut7 3otal nits ?@

0uic$ R'tio ?Current 6ssets E Inentories@ 7 Current 0iabilities

Return On C'pit'l= i f I t t d 3 ?=I3@ 7 C it l = l d 1++



List of A))revi'tion

A))revi'tion e'ning

A.R 6era!e 5aily &ate

/CG 'tri& oston Consultin! Group Matri

.!S 5iidend -er Shares

E/IT =arnin! efore Income and 3a

E/ITA =arnin! efore Interest, 3as, 5epreciation and 6mortiJation

E/IT.A =arnin! efore Interest, 3as and 6mortiJation

E/T =arnin! efore 3a

E!S =arnin! -er Share

G.! Gro/th 5omestic -roduct

IF International Monetary und

OTA >nline 3rael 6!ent

!ESTLE -olitical, =conomic, Social, 3echnolo!y, 0e!al, =nironment

Rev!AR 3otal &eenue -er 6ailable &ooms

ROCE &eturn >n Capital =mployed

SOT Stren!then ea'ness >pportunities and 3reats



List of Limit'tion

Limite- inform'tion for politic'l f'ctor in !EST 'n'l(sis

Information for political analysis is not described a lot in the report. hen findin! the

information about it from online sources such as online ne/s /ebsite, it does not pinpoint that it

really affected Marriott directly but in the area of tourism industry.

No fin'nci'l Report of 3ilton )et#een (e'r 4556 7 4515

3here is no reenue reported from %ilton in year 2++9 E 2+1+. e cannot compare

Marriott /ith %ilton durin! these t/o years. 6s a result, there are only three years comparison

bet/een Marriott and %ilton.

Currenc( conversion

Marriott uses S dollars in their financial report but 6ccor uses =uro currency. efore /e

can calculate eery e;uation /ith the competitors includin! 6ccor, /e need to conert currency

to S dollars first. It is time consumin!.

S'me Topic )ut .ifferent Figure

hile /e /ere findin! the numbers of financial part from online sources , /e found out

that they present different number in the same topic and time period.



/usiness overvie#

1+1 Comp'n( Overvie#

Marriott International, Inc. is an 6merican lar!est hotel company, head;uartered

in ashin!ton. 5C, S and founded by 4.. Marriott in 192". 3he company mana!es

and franchises a broad of hotels and related to lod!in! facilities ?Marriott International

2+1<@. Marriott hotel has 1 famous brands in /orld/ide includin! si!nature brand,

luury hotel, collections, destination entertainment, selectFserice lod!in!, etendedFstay

lod!in!, timeshare, conference center, !reat 6merica par's and purchased the oerseas

hotel ?Marriott 2+1<@. 6s of 4uly 2+1<, there /ere more than <,+" properties under their

brands in oer + countries. 6dditionally, they hae o/ned #9",+++ rooms in the /orld

and other 19(,+++ rooms in the deelopment pipeline ?Marriott 2+1<@.

i!ure 1: Marriott International, Inc 1 rands.Source: Marriott 2+1<



human stren!th and enhancement of people8s satisfaction and /ellFbein! by human

themseles ?Mullins and Christy 2+1$@.

2. Intern'l An'l(sis

4+1 SOT An'l(sis of 'rriott

Strength e'$ness• Global leader of the hospitality mar'et

and lar!e !eo!raphic presence.

• orld leadin! technical innoation in

hospitality industry and up!rades /iththe latest technolo!y.

• Stron! competitie prices online

• %i!h ;uality, aluable and efficiency of

products offered

• %i!h return on capital employed, /hich

!enerates hi!her profits compared tocompetitors

• Stron! asset li!ht strate!y

• &elyin! on domestic mar'et in S

• 6 lac' of lo/Fcost alternaties7 lifestyle

brand in product portfolio compared toStar/ood and I%G

• 0aunchin! ne/ hotel, =5I3I>N /hich is

in a turbulent period no/

• nsuccessful competitie /ill limit

operatin! mar!ins, diminish mar'etshares and reduce earnin!s.

• General economic uncertainty and /ea'

demand impacts on financial !ro/th

• 0o/est current ratios, hi!her ris' of

meetin! short term obli!ations

• Opportunit( • Thre't

• =mer!in! mar'ets across continents

• Improin! of customer serices

• Competitie industry, competin! /ith

maKor hotel chains, national and



4+4 Core Competence8 9'lue Ch'in

3he stron! reputation of Marriott brands for oer $+ years ma'es it /ell reco!nised

amon! customers, staff and hotel8s o/ners. 6ccordin! to Marriott Ne/s Center, Marriott

International /as ran'ed by or'in! Mother ma!aJine as one of the 2+1< or'in! Mother

1++ est Companies. Marriott International has earned the 2+1< or'F0ife Seal of

5istinction from orld at or'Ls 6lliance for or'F0ife -ro!ress ?Marriott 2+1<@. MarriottInternational also ran'ed 1# on the 2+1$ 5iersity IncLs 3op (+ Companies for 5iersity list

?Marriott 2+1$@. 6s a result, the brands are continually bein! reco!nised for both eistin! and

ne/ mar'ets. 3hus, Marriott brands are one of the company8s distinctie competencies,

/hich can build stron! confidence amon!st sta'eholders and potential inestors.

4+: /CG 'tri&



i!ure <: Marriott in CG matri in comparison of four business se!ments



4+; Economies of sc'le

i!ure (: Se!ment &eenue from )ear 2+11 F 2+1$

Source: Marriott 2+1$

Marriott proides one main /ebpa!e /hich /ill narro/ do/n to each continent and

country8s contact information directly on 5irectory pa!e at ///.marriott.com7hotelFsearch.mi. 6lso, one stop serice to boo' a room /orld/ide can be done on the first pa!e on

the /ebsite. Since Marriott /as launched as a public company in hospitality industry in 199

http://www.marriott.com/hotel-search.mi






4+* St'$ehol-er

Marriott International has a lar!e ran!e of sta'eholder !roups includin! shareholders,

o/ners, franchisees, suppliers, associates, customers, community or!aniJations

?non!oernmental or!aniJation@ and !oernment entities ?Marriott 2+1<@. hen it comes to

shareholders, there are three different types of o/nership respectiely stands for different

percenta!e. 3here are current o/nership o/ned by institutions, mutual funds and insiders,e;uity o/nership by funds and institutions, and bond o/nership by indiiduals. According

to the annual report of Marriott (2014), there were 294,823,291 shares of Class A Common

Stock outstanding held by 36,811 shareholders of record. In 2013, there were 312,344,872

shares of Class A Common Stock outstanding held by 38,726 shareholders of record

(Marriott 2013). In 2012, there were 333,866,753 shares of Class A Common Stockoutstanding held by 42,086 shareholders of record (Marriott 2013). It seems the interest

decreased in long term investment and major shareholders were changed periodically. The

lack of consistent guidance on Marriott’s earnings should be also seen as limitation to

shareholders and has caused a decreasing confidence to invest in the company.

&efers to o/ners of hotels, it is /ell 'no/n about the =ecutie >fficers 4..

Marriott, the Chairman Mary B.ush, Chairman and Chief =ecutie >fficer rederic' 6.



board memberships, /or'in! !roups, partnerships, and adisors and lobbyin!. 3he

!oernment entities hae interest on the /or'in! !roups, strate!ic partnerships on !lobal

issues, eecutie committees, adocacy for &educed =missions from deforestation and

5e!radation ?&=55@ proKects ?Marriott 2+12@.

4+< Communit( 'n- Corpor'te Soci'l Responsi)ilit(

orld of >pportunity is another corporate social responsibility that Marriott

International, Inc. -uts effort on proide shelter, food, and childrenLs health, /hile creatin! career

opportunities for associates in the /or'place and supportin! education in the hospitality industry

?Marriott Ne/s Center 2+12@. 6lso, the company raises the alue of /oman as a leader by

emer!in! mar'ets /ith small and !ro/in! companies run by /oman o/ners.

MarriottLs PNobility of NatureP pro!ram is collaboratin! /ith Conseration International.

3he conseration pro!ram aims to presere fresh /ater and rainforest especially Sichuan

-roince in China after seere earth;ua'e in 2++ ?3uppen 2+1$@.



:+ E&tern'l An'l(sis

:+1 !EST An'l(sis

!olitic'l Econom(

• Marriott still !ained &e-6& at #

percent in 2+12 durin! politicaluncertainty in the Middle =ast.

•65& has risen almost < percent

• Marriott still 'ept carryin! on

launchin! 0ondon =5I3I>N in 2+1$.

• No ne/ proKect in =urope /as affected

by that political situation.

• N3> ?2+1$@ reported that 6sia

accounts for 1< of the /orldQs top (+source mar'ets in terms of international

ependiture especially SouthF=ast 6sian/hich are Indonesia, Malaysia, Sin!apore,3hailand and Aietnam.

• In 2+12, these fie countries !enerated

ependiture across internationaldestinations for <9R billion /hich isdoublin! up from 2(R billion in 2++#.

• 3M 2+1$ declares that IM predicts

!lobal G5- to !ro/ by $. in 2+1< dueto positie !ro/th in the =uroJone afteremer!in! mar'ets /ith S ?remner 2+1<@.

• Soci'l • Technolog(

• orld =conomic orum8s Goernors of

6iation, 3rael and 3ourism

Committee /ith the mana!ement boardof Marriott said that economic mobilityand opportunity leadin! to prosperity

d i b t l t

• Internet is considered as a main channel to

!ain information and promotion no/adays

?0iu and *han! 2+1<@.• &eie/in! comments from other !uests

affect decision ma'in! process on



:+4 !orter=s Five Forces

Riv'lr( 'mong E&istingCompetitors

Global tourist arrials and

inbound spendin! from

2+12 E 2+1"

Stron! C=>s and

mana!ement policy

S'illed

/'rg'ining !o#er of

Suppliers

6menities and toiletries

from different brands to be

used in hotels across the

continents

/'rg'ining !o#er of /u(ers

Ne!otiation for the lo/est

prices from !uests

S'illed employees /or'in!

/ith a isionary

mana!ement team

Thre'ts of Ne# Entr'nts

3rendy hotels of other

hotel chain are penetratin!

the local mar'et

=mer!in! bet/een hotels

to set up a ne/ property



Marriott is considered to be a fie star alliance and the main international competitor is

%ilton orld/ide %oldin!s, Inc., follo/ed by Intercontinental %otels Group -lc. and 6ccor. 6t

the same time, the company can use consumer demands to measure the company8s capability of

accommodation, eents and conferences. 6ccordin!ly, industry profitability can predict

mar'etin! trends periodically. 3he report from 3M 2+1$ su!!ests that !lobal tourist arrials

and inbound spendin! are epected to !ro/ oer the 2+12F2+1" period from emer!in! mar'ets

?remner 2+1<@. In addition, personality of C=>s and their policy play an important role in

driin! the company and manpo/er to compete amon!st the industry in the ri!ht /ay as 4..

Marriot, 4r., said, 3o realisin! out ision of bein! the best lod!in! company in the /orld

?Marriott International, Inc. 2+1$@.

/'rg'ining !o#er of Suppliers

>ne spot that represents the ima!e of the hotel and be ta'en bac' home /ith !uest is

amenities and toiletries. 6s reported by 3ouryalai ?2+1<@, Scott Mitchell, 6 5irector of 5esi!n

and 5eelopment of Marriott and his team tested up to (2 brands of shampoo, conditioner, body

!el, lotion and soap become ma'in! a decision on 3hann, a natural s'incare from an!'o', for

hotels in 6mericas and 6sia -acific, and 6cca Bappa, an Italian brand, for hotels in =urope and

6frica. Marriott made a decision from scents until pac'a!in! to fit the hitFandFcool concept for

http://www.hoovers.com/company-information/cs/company-profile.Hilton_Worldwide_Holdings_Inc.5499ed9803407dd0.html

http://www.hoovers.com/company-information/cs/company-profile.INTERCONTINENTAL_HOTELS_GROUP_PLC.c836431effb129c2.html

http://www.forbes.com/companies/marriott-international/

http://www.hoovers.com/company-information/cs/company-profile.Hilton_Worldwide_Holdings_Inc.5499ed9803407dd0.html

http://www.hoovers.com/company-information/cs/company-profile.INTERCONTINENTAL_HOTELS_GROUP_PLC.c836431effb129c2.html

http://www.forbes.com/companies/marriott-international/



/'rg'ining !o#er of /u(ers

Guests are the main sources of income. 3herefore, buyers hold more bar!ainin! po/er

oer Marriott. 3hey /ill ne!otiate the lo/est prices /ith the best serices or offers. If !uests are

satisfied /ith the serices, they are /illin! to pay more for hi!her ;uality serices and /ill

become loyal customers. ord of mouth and !uest royalty are considered to be the most

important factor for hotel to retain the same tar!et mar'et /hile attracts a /ider tar!et mar'et at

the same time.

Thre't of Su)stitution

ith the fie star bouti;ue hotel options, !uests hae the alternatie to choose their stay

dependin! on their price ran!e and suitability. 6nother concern is the deelopment of

technolo!ies, /hich are seemin!ly a ne/ enemy and ally to the hotel industry. 3he aailability of

relaation and reKuenation technolo!ies has meant that consumers can stay at home and

maintain their o/n health serices. 3herefore, Marriott has to ensure they hae somethin! that is

beyond the !uest8s epectations and attract them from competitors. >ne of the !uarantee

eamples is Duan Spa at %on! Bon! S'ycity Marriott %otel that Kust !ot three a/ards in 2+1<

from orld 0uury Spa 6/ards ?2+1(@ /hich are est 0uury itness Spa, est 0uury

outi;ue Spa and est 0uury Spa Group.

Thre't of Ne# Entr'nts



consolidation in 2+11, they no/ hae <( properties that can !enerate annual hotel reenues of

approimately (++R million ?usiness ire 2+11@.

:+: 'r$et An'l(sis

:+1+1 T'rget 'r$et

Marriott International, Inc. has a ariety of hotels for different customers, such as Marriott

%otels and &esorts proides youn!er traellers to stay, it is called the net !eneration8 ?Coey

2+1$@.



esides, different bac'!rounds of consumer behaiours can brin! positie impact for

mar'et se!mentation ?Ne/ 6!e International 2++9@. 3a'e =ample for Marriott International

Inc., some &esidential fit for bud!etForiented traeller such as &esidence Inn, because of pricin!.

Marriott %otels are suitable for full business traellers such as 3o/ne-lace Suite. Some Marriott

resorts fit for leisure acation !uests li'e Marriott Aacation Club and Grand &esidences. 6nd,

Marriott Senior 0iin! such as l!ari %otels and &esorts and 4.. Marriott %otels and &esorts

suit for elderly people to stay ?Ne/ 6!e International 2++9@.

:+1+4 'r$et Sh're



3he mar'et share of Marriott has sli!htly increased bet/een 2++9 and 2+11. 3hen, it

dropped from 2+11 to 2+1$ een lo/er than 2++9. 6ccordin! to Marriott 6nnual &eport ?2+1$@,

it su!!ests that comparin! to 2+11, the reenue fees dropped from R11.1 billion in 2+12 from

R12.$1 billion in 2+11 ?Marriott International, Inc. 2+1$@. Mean/hile, comparin! /ith North

6merica, the outside of North 6merica decreased about R$ million, leadin! to the mar'et share

of Marriott has sli!htly decreased in 2+1$ ?Marriott International, Inc. 2+1$@. 3hese share fi!ures

are relatiely indicatie of their position in the mar'et ?see 3able 2@.

:+1+: 'r$et Gro#th



:+1+; >e( successful f'ctors

6ccordin! to the 3able $, Marriott dominants the lar!est mar'et share in the last fie

years and operates oer <92 properties /orld/ide and oer $+++ in 6merica ?see 3able <@. It is

undeniable that Marriott is one of the most successful hotel companies, because it combines their

o/n culture /ith local culture, has many AI- !uests and hi!hest !uest loyalty, and offers prices

for different !roups of customers ?Marriott International, Inc. 2+12@.

In addition, it has a human serice, for eample, customers can chan!e their trael plan

and bud!ets ?Marriott International, Inc. 2+12@. 6t the same time, ne/ serices initiaties and a

mar'etin! campai!n /ill be found eery/here by 2+1( ?Marriott International, Inc. 2+12@.

Moreoer, Marriott brin!s a fresh, focuses on entertainment for customers. or eample,

the luury brands li'e &itJFCarton, 4.. Marriott and l!ari %otel and &esorts proide the best

dinin! and entertainment options /ith public spaces ?Marriott International, Inc. 2+12@. 6t the

same time, independent hotels such as 6uto!raph Collection can use Marriott stron! resources,

includin! their loyalty !uests and mar'etin! channels ?Marriott International, Inc. 2+12@.

:+; Competitor An'l(sis

Marriott International, Inc. has (.# mar'et share /as la!!in! behind %ilton %otel



Star/ood %otels and &esorts orld/ide, Inc. is an 6merican hotel and leisure company

and it is different from Marriott because they o/n Star/ood Aacation >/nership, Inc., St. &e!is,

=lement, 0e Meridian, the 0uury Collection, the estin, Sheraton, and our -oints for hi!hF

end customers ?&enner 2+1+@. 3his company currently operated 1,1#2 properties across 1++

different countries ?Star/ood 2+1<@. 6lthou!h Marriott /ith their ne/ luury brand /ere located

in faorable location, Star/ood has finished their epansion plans for India by 2+1$ ?Star/ood

%otels and &esorts 2+1+@. 6ccordin! to the Star/ood %otels and &esorts /ebsite ?2+1+@,

boo'in! typically came from Star/ood -referred Guest members eceedin! Marriott by (+

?Star/ood %otels and &esorts 2+1+@.

:+;+1 Competitor Comp'rison

Main competitor of Marriott is %ilton orld/ide and they share competitie areas as the

follo/in!s.

'rriott Intern'tion'l? Inc+ 3ilton orl-#i-e

O)@ectives8

Founded:192"FGlobal leader /ith mar'et share $(.(9FStron! operatin! performance

O)@ectives8

Founded:1919F%as a stron! mar'et share 11.9+FStron! operatin! performance



'rriott Intern'tion'l? Inc+ 3ilton orl-#i-e

Current pro-ucts 'n- services8

FMarriott International operates 1 different brands in " serice cate!oriesi@ 0uury hotels: &itJFCarlton, l!ari %otelsand &esorts and 4.. Marriott %otels and&esortsii@ 0ifestyle Collection: =5I3I>N %otels,

&enaissance %otels, 6C %otels and6uto!raph Collectioniii@ Aacation clubs: Marriott Aacation Cluband Grand &esidencesi@ 0od!in!: &esidence Inn, 3o/ne-laceSuites and Marriott =ecutie 6partment for business.FCustomers can 5I) ?do it yourself@ their

accommodation and choose their faouritestyle to lieF6dertisin! Campai!n

Current pro-ucts 'n- services8

F%ilton /orld/ide mana!es 1+ distinctie brands, includin!:i@ %ilton8s 0uury: aldorf 6storia %otelsand &esorts and Conrad %otels and &esortsii@ or business traellers: %ilton8s ullSerice offers la!ship %otel and %ilton

%otels and &esorts

Re#'r-s guest lo('lt(8

F3he loyalty pro!ram8 Marriott &e/ards8 has2 million members /orld/ide and continuesepandin!.i@-roidin! members /ith basic features suchas redeemin! points for free ni!hts and freefli!hts, no blac'out dates and priority chec'F

Re#'r-s guest lo('lt(8

F %ilton also has a loyalty pro!ram called%%onors8,i@ -roidin! four membership leels: lue?entry leel@, Siler, Gold and 5iamond.ii@%o/eer, Siler status must stay < ni!hts ina year or stay 1+ ni!hts in a year to retain and



:+* Competitive A-v'nt'ge

It could be ar!ued that Marriott deries its competitie differentiation by serin! in both

business and leisure se!ments. 6ccordin!ly, the company first launched Marriott &e/ards in

199" to create the !uest alues ?Marriott &e/ards 2++9@. 3he company does not operate /ith

internal se!ments only but also eternal cooperation /hich are airlines, a car rental company, and

AIS6 credit card. 3his strate!y !ies more opportunity for upsellin! and increase !uest

preference /hen ma'in! a choice of accommodation.

4. Fin'nci'l An'l(sis

4.1'rriott=s Intern'tion'l Inc+ 'n- 3ilton orl-#i-e Revenue !rofit

In !eneral Marriott8s consumes hi!her reenue compared to %ilton. It has sho/n constant

!ro/th oer the years /ith a sli!ht decline in 2+12. It /as durin! the 0ondon >lympics that

demands /ere increasin! for traellers, in 0ondon. R1< million of reenue /as !enerated at one

leased property /hereas a decrease of consumer demands heaily affected occupancy rates in

4apan, due to the 3sunami and earth;ua'e, /hich has fri!hten traellers. =ffectiely lead to a loss

of R2 million in business interruption from a utility company ?Marriott 6nnual &eport 2+1$@.

6lso the preious economic history has been dominated by the credit crunch in 2++ 2++9



i!ure : Marriott International and %ilton orld/ide %oldin!s fie years reenue.

Source: 6dapted from Marriott International8s 6nnual &eports 2++9F2+1$ and 3he Statistic -ortal

4.1.1 'rriott Intern'tion'l=s Revenue B * Segments

Marriott International has spun off its 3imeshare8 se!ment in 2+11, /hich has lead tooperatin! loss of R1"" million. 6lthou!h the 3imeshare8 se!ment /as a contributor to the

company8s profit after the recession ?erJon and %udson 2+11@, they decide to focus on the core



i!ure 9: Marriott International fie years reenue in fie se!ments.Source: 6dapted from Marriott International8s 6nnual &eports 2++9F2+1$.

;+4 Net Income

;+4+1 Net Income E/IT 'n- E/T

3here are dramatic chan!es of net income since 2++9, /hich has risen and fallen oer the

years ?see fi!ure 1+@. Subse;uently, the number remained risen to 2+1$. It /as durin! 2+11F2+12



;+4+4 E'rning /efore Interest 'n- T'& "E/IT%

6 rise in =I3 causes a rise in net incomeU a decrease in =I3 /ill cause een !reater

decrease in net income ?Gibson 2+1+, p $<#@. hen loo'in! at the !raph, 2+1+ sho/s that =I3

reduced from R<<+ to R1( ?by 2<@, /hich caused a dramatic decrease in the net income by

(, /hich is si!nificant to the company8s performance. %o/eer, the mar'ets reflected stron!

demand in North 6merica, /hile properties in ritain remained /ea' as a result of !oernment

austerity measures and 4apan first ;uarter of 2+11 /ere affected from the aftermath of theearth;ua'e and tsunami ?Sato 2+12@.



aera!e. 3he stron! transient in demands that caused the &e-6& to increase has also affected

the increase on occupancy rates as /ell ?see fi!ure 12@. 3he occupancy rates are almost at pea'

leels, /hich desi!nate a !ood business si!n. 6s a stron! !ro/th of the .S G5-, consumer

confidence, and corporate earnin!s remain ital to the industry8s success. 3he epansion in

capital spendin! has been in response to proKected demand. %o/eer oerdeelopment in certain

areas is a concern because if there is a prolon!ed lo/ occupancy rates, it could be threaten hotels

that are heaily leera!ed?3he Street &atin!s 2+1(@.

3he demand for spendin! on aries factors such as personal income leels, total

employment, and consumer confidence has affected the 65&, &e-6& and >ccupancy rates. In

recent years, catastrophic /eather, fear of terrorism, and health epidemics directly impacted on

the industry in numeral /ays. 3he industry is capital, mar'etin!, personnel, ener!y, maintenance,

and technolo!y intensie ?>/usu 2+1<@.



i!ure 12: Marriott International %otel8s >ccupancy rates.Source: 6dapted from the Marriott International 6nnual &eport 2++9F2+1$

;+; Asset 'n'gement

3he 6sset 3urnoer measures the operation and efficiency use of assets ?Bim and 6youn

2++(@. Marriott operates on the asset li!ht strate!y, bein! asset intensie, /hich causes the lo/er

ratio of asset turnoer. It is not necessarily a bad si!n as different hotels operate different

strate!ies.Marriott 6nnual &eport 2+1$ hi!hli!hts that the total asset has decreased by 2( from

2++9 to 2+11 /as due to impairment /hich caused R2 million loss and the alue depreciated in

sellin! those assets. It has increased by 1( in 2+1$, because of the !ro/th epansion, /hereby



i!ure 1$: Marriott International 3otal 6ssets

Source: Marriott International 6nnual &eport 2++9F2+1$



the cash ultimately reduced, due to arious renoation plans carried out on ne/ business

proKects, therefore it can be said that Marriott8s are usin! their funds sufficiently to finance their

!ro/th for a !reater return profitability. ith stron! financial mana!in! positions, Marriott can

access sufficient funds to finance their !ro/th and increase their nonFcurrent liabilities if they

/ish to carry out further epansion plans. Generally, they are !ood at payin! bac' their shortF

term obli!ations debt and they hae carefully monitored the cash flo/.



i!ure 1#: Marriott International Current 6sset in comparison /ith competitors.Source: 6dapted from: I%G -0C 2++9F2+1$U Marriott 2++9F2+1$U 6ccor 2++9F2+1$U I& %ilton

orld/ide 2+12U 5eelopment Star/oods %otels 2+12U Mar'et atch 2+1( and Statista 2+1(.

;+* Li,ui-it(

ased on the company spendin!, Marriott seems to maintain an ade;uate li;uidity

profile, as net sources of li;uidity are to remain positie in the eent of declinin! =I356.

6dditionally, the company has a stron! relationship /ith ban's and has a hi!h standin! in creditmar'et. Marriott are carefully monitorin! their balance sheet and in preparation to utilise lo/

cost spendin! /hen the lod!in! cycle declines ?&euters 2+12@



i!ure 1":Marriott International Current &atio in comparison /ith competitors.

Source: 6dapted from: I%G -0C 2++9F2+1$U Marriott 2++9F2+1$U 6ccor 2++9F2+1$U I& %iltonorld/ide 2+12U 5eelopment Star/oods %otels 2+12U Mar'et atch 2+1( and Statista 2+1(.



Goh 2+1+@. >ne maKor concern is debt to e;uity ratio, as ecessie debt increases the costs of

finance that reerse the positie effects of leera!e. 3he aboe !raph sho/s a consistency ratio

for the debt borro/ed by Marriott International. ith the debt e;uity of 1.2, it seems that the

company has been a!!ressie in financin! their !ro/th /ith debt. %o/eer, the results /ere

successful and the epansion plans, renoations and Koint entures hae !enerated !reater returns

to the companyLs reenue and its shareholders. 3he company has ta'en some ris' in borro/in!,

because due to the economic crisis fluctuatin!, it sho/s the ur!e to become successful. 0o/ debt

to e;uity ratios may indicate that the companies are not ta'in! adanta!e of the increased profits

that financial leera!e may brin!. Inestors are !enerally attracted to lo/ debt to e;uity ratios

because the interests are better protected in the eent of a business decline, but firms /ith hi!h

debt to e;uity ratios may not be able to attract additional capital. If reenue declines 2+, the net

cash flo/ /ould !enerally drop $( to <+ ?itch, 2++9@. 6s such, durin! a recession, a decline

in hotel reenues /ill seriously impact the solency of hotel properties that incurred lar!e

amount of debt.



Marriott8s &>C= are !enerally hi!h compared to competitors, indicatin! that they

!enerate more earnin!s of capital employed. %o/eer, Marriott8s current assets are less in

comparison /ith competitors ?see i!ure 11@, /hich su!!ests the hi!her alue of &>C= and

profitability. Marriott8s is no/ focusin! on asset li!ht strate!y and driin! incremental reenue

by cuttin! costs at the property leel and etend their epansion into the midFleel hotel se!ment

to ta'e adanta!e of the industry8s fastest !ro/in! population and by utilisin! lo/Fcost, hi!h

impact promotions to allo/ room rates to remain competitie ?&enner 2+1+@. hereas

competitors are concerned /ith asset orientated strate!y, deployin! their balance sheets to secure

brand presence in strate!ic mar'et and epand into emer!in! mar'ets ?er!en 2+12@.



Marriott has improed earnin!s per share oer the years, alon! /ith a !ro/in! rate of reenue,

/hich has demonstrated a positie pattern of !ro/th rates. 3he fie years trends could /ell

continue to rise of up to R2.(" ?3he Street &atin!s 2+1(@.3he =-S /as a 1# percent increase oer the years, sho/in! a !ro/th of 22 percent yearFoerFyear ?Marder 2+1$@.

i!ure 21:Marriott in comparison /ith competitor =arnin!s -er Shares

Source: 6dapted from Marriott International &eport 2++9 E2+1$U 6ccor 2+1+F2+1$U Mar'ets t



;+15 'rriott Intern'tion'l Sh're !erform'nce

Marriott share prices has been increasin! rapidly since 2+1+, /ith some short term

decreases. 2+1$F2+1< has sho/n !reater increase of up to " .S. 5ollars because of the

epansion of ne/ businesses and the !ro/th of the lod!in! businesses se!ments, /hich

contributes hu!ely to the share performance. 3he stron! S economy also supports this.

%o/eer, there /as a sli!ht dip of share price durin! 6u!FSept 2+12, /hich could be as a result

of the third ;uarter diidend pay. 3he epansion of the company has affected in the share

performance stron! this year and seeral areas proes the stren!th of Marriott, such as the

reenue !ro/th, solid stoc' price performance, !ro/th in earnin! per shares and increase in net

income. 3hese stren!ths out/ei!h the company8s /ea'ness cashflo/s. It is a !ood time for

inestors to purchase shares because it loo's li'e the prices are continuin!ly increasin! and

shareholders /ill receie !reater returns in the net year ?>/usu 2+1< @.



Recommen-'tion

ased on protectin! local enironment, Marriott al/ays focus on buildin! loyalty brands,

buildin! hotel Inn to dra/ youn! !enerations ?Marriott Sustainability &eport 2+1<@. In 2+2+,

hotel brandin! /ill be incredibly creatie. 3he ne/ !eneration of traeler /ants eperiences and

conenience. Isenber! ?2+1( cited by %i!ley 2+1(@ said that brands /ill need to learn ho/ to

bend the rules to satisfy !uests by payin! more attention to !uests, as /ell as creatin! ne/ Kobs

in deelopin! countries, especially in 6frica in net fe/ years ?Marriott Sustainability &eport

2+1<@.

No/adays, Marriott became the lar!est hotels in 6frica in 6pril 2+1<. 3hey also /on

0==5 ?0eadership in =ner!y and =nironmental 5esi!n@ siler because they built the Marriott

Mar;uis in ashin!ton, 5C /hich is the lar!est hotels in the .S. in May 2+1< ?Marriott

Sustainability &eport 2+1<@. esides, Marriott /ill open hotel chain in 6frica, China, India and

raJil ?Marriott Sustainability &eport 2+1<@. or eample, they plan to open Marriott -ortFauF

-rince %otel in %aiti in ebruary 2+1( and /ill proide oer 2++ ne/ positions to promote local

economic ?Marriott Sustainability 2+1<@.

In conclusion, Marriott has some positie factors that should attract inestors to /ith the

opportunity to !ain earnin! per share as Marriott assures inestors of the !uaranteed share

diidends each year 3he company8s stren!th can be seen in the reenue !ro/th !ood cash flo/



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https:77u'.finance.yahoo.com7echartsZsHM6&YsymbolHM6&Uran!eH1d V6ccessed 1( 5ecember

2+1<W.

http://www.forbes.com/sites/halahtouryalai/2013/09/05/the-new-hotel-tycoons-why-private-equity-loves-the-lodging-industry/


http://www.greenhotelier.org/know-how-guides/water-management-and-responsibility-in-hotels/








Grouop 29: Group Meeting Action Planand Progress

No Item Details Action Who What When Resullts1 1st

meeting

Form a group Talk about the

topic and keypoints in thereport thatneed to becovered.

All We brainstorm what

company or industry we areinterested to do research.We formed a group onFacebook and use it as aprimary discussion roompromptly.

9th

otber!"#14

We $nally

assigneverymemberto dosomeresearchof thecompanythat eachof us isinterested

in andconsider if it covertopics asre%uired.

" "ndmeeting

&hare information We shareinformation ofthe companythat each of ushave found

All 'ust a rough group meetingto see how much informationwe can $nd about (arriott)nternational! )nc. and seewhich part need to ful$llmore.

14thctober!"#14

*omework forsearchingforinformation

resources+ +rd

meeting)nfo. ,athering -evide the

report for eachof us to studyand work on it.

All We consult among the groupand assign each part of thereport to each teammember.

1thctober!"#14

&tartworkingonindividualparts



11

No Item Details Action Who What When Resullts4 4th

meeting&tructures / groupmember issue

,oing on with agroup of 4 andbrainstorm forthe outline

All We decide to keep workingwith a group 4 people after)aona suspended her courseat 0.

We came up with e2ternaland internal factors!company overview! andsuggestion parts in ourreport. &eparate each part toeach of us. 3attikan Financial report!stocks and accounting 5hanunya &trategicmanagement 6pastpresentfuture7 8ao and (ing 0usinesslan

1+th:ovember! "#14

We haveto $ndinformation andstartwriting adraftreport ofeach partasassigned. Then! wewill keepupdatingvia onlinechat andshareindividualreport forthe team.

; ;thmeeting

5ombine info andstructures

,ather allinformation wefound so far ineach sections.3econstruct

the structure ofthe analysedreport again

All After doing some reseach toget info about (arriott! wewant to reconstruct theoutline again to cover allections and make it more

relevant between eachsection.

1<th:ovember! "#14

We gotnewstructureand willcontinue

doingresearchand $ndbothdescriptveanalysisandcriticalanalysis



11

No Item Details Action Who What When Resullts 1st

meetingwith theadvisor

(eeting with 'e=

consult with 'e=about the outline of the report andimportant parts

8ao!5hanunya!3attikan

At the moment! 5hristinawent back to 5hina due topersonal reasonimmediately. We areplanning to work on with agroup of three. 'e= alsoindicates some $nancialparts for us to calculate andanalyse more.

"<th:ovember! "#14

We studymore andwork harderbecause wenow reduceto a groupof three andare inuncertaintythat5hristinacan manageher time tocontinue herstudy thistrimester ornot.



11

No Item Details Action Who What When Resullts> 1st

revision(eeting during thewinter break

,ather contentof analysis

All Fortunately! 5hristina can continueher participation on this groupassignment! so we divide somemore topics to her. For other parts!we consult among the group to seeif anybody is struggling in sometopics and need help. At the end!we separate and bring back thepending ?obs to work on during theschool break and will come backagain for the $nal version ofeveryone@s part.

:ow each responsibility in thereport is as the following. 3attikan Financial analysis andscenario planning 5hanunya )ndustry analysis6&T! orter@s Five Forces!conomy of &cale7! consumerbehaviours! company@s e2pansionand risk management. 8ao 5ompany@s overview!competitor analysis! marketanalysis 6market share! market

growth! target market75hristina &takeholder! leadershipstyle! 05, (atri2 and &WTAnalysis.

9th-ecember! "#14

ach of usneeds to$nd morereferencesandanalysesometopicsdeeper.



11

No Item Details Action Who What When Resullts< "nd

revision(eeting after thewinter break

3evise someparats of thereport

All We gather all information andrevise it for one lst time beforemeeting with 'e= in the ne2t twodays. &ome parts need peerreview such as Financial analysisand risk management. We takethe whole day to get all individualparts together and revise it as aone complete report.

>th 'anuary!"#1;

)f anybodyneed to addor edit somecontent inthe report!we still cando it by Tuesday1+th 'anuary.

9 +rd3evisioon

(eeting againbefore meeting 'e=

We meet again All &ome more points to edit dit analysis of 05, (atri2 Find more academic info. ForBeadership style Find more info for competitiveadvantage Analyse and calculate $nancialpart

<th 'anuary!"#1;

ach of usneed to$nish ourpart bytomorrowmeeting.

1#

"ndmeetingwith theadvisor

(eeting with 'e= ,et the ideawhere to cutthe words downand where toadd moredetails

All We need to do some more$nancial calculation and someedition in some analysis. 5&3 conomie of scale 5ompetitive Advantage 05, (atri2

&WT Analysis Beadership sryle

9th 'anuary!"#1;

ach of usreally needto get everything donebytomorrow. Therefore!

we canrecheck thereport againfor one lasttime.



No Item Details Action Who What When Results11

4th3evision

5ombination andrevision

We need to $nishevery part and gothrough the wholereport once again.

All We cut the words done tolimitations and revise somecontent. We combine every part ofthe report including the cover pagetill appendi2 at the end. We recheckand revise it for one last time.

1#th 'anuary!"#1;

As we could not$nish thecontent andcalculation asplanned! weneed to haveone moremeeting to gothrough thewhole reportaltogetheragain.

1"

Final3evision

Bastrevisionbeforehanding in

,ather every partof the report andorganise the report

5hanunya!3attikanand 8ao

After receiving every part of thereport and revising content someparts because we e2ceeded theword limitation! we need to cut thewords down. -ue to 5hristina@sillness! 5hanunya needs to reviseher part. 3attikan and 8ao recheckFinancial part for one last time. Atthe end! 5hanunya gathers andreorganises the whole report intoone parallel structure. 3attikantakes care of grammar checking forone last time. 8ao is responsible for

$gure and table orders.

1"th 'anuary!"#1;

rint the reportto submit as ahard copy andsend online in-F $le viamy0

Documents

Group 29-Marriott International%2c Inc. (Final)