INTRODUCTION:

Marriott International, Inc. is a worldwide operator and franchisor of a broad portfolio of

hotels and related lodging facilities. Founded by J. Willard Marriott, the company is now led
by son J.W. (Bill) Marriott, Jr. Today, Marriott International has about 3,150 lodging
properties located in the United States and 67 other countries and territories.

History
Marriott was founded by J. Willard Marriott 1927 when he and his wife opened a root beer
stand in Washington D.C. As a missionary in the sweltering, humid summers in Washington,
Marriott was convinced that what the city needed was a such a place to get a cool drink. They
later expanded their enterprises into a chain of restaurants and hotels.
The Key Bridge Marriott in Arlington, Virginia is Marriott International’s longest operating
hotel, and will celebrate its 50th anniversary in 2009. Their son and current Chairman and
Chief Executive Officer, J.W. (Bill) Marriott, Jr. has led the company to spectacular
worldwide growth. Today, Marriott International has about 3,150 lodging properties located
in the United States and 67 other countries and territories.

Marriott International was formed in 1992 when Marriott Corporation split into two
companies, Marriott International and Host Marriott Corporation.

In 2002 Marriott International began a major restructuring by spinning off many Senior
Living Services Communities (which is now part of Sunrise Senior Living) and Marriott
Distribution Services, so that it could focus on hotel ownership and management. The
changes were completed in 2003.

Marriott International headquarters in the Bethesda area of unincorporated Montgomery

County, Maryland, United States

In April 1995, Marriott International acquired a 49% interest in the Ritz-Carlton Hotel
Company LLC. Marriott International believed that it could increase sales and profit margins
at the Ritz, a troubled chain with a significant number of properties either losing money or
barely breaking even. The cost of Marriott's initial investment was estimated to be about
$200 million in cash and assumed debt. The next year, Marriott spent $331 million to take
over the Ritz-Carlton Atlanta and buy a majority interest in two properties owned by William
Johnson, a real estate developer who had purchased the Boston Ritz Carlton in 1983 and
expanded his Ritz holdings over the next twenty years.

The Ritz began expansion into the lucrative timeshare market among other new initiatives
made financially possible by the deep pockets of Marriott, which also lent its own in-house
expertise in certain areas. There were other benefits for Ritz-Carlton flowing from its
relationship with Marriott, such as being able to take advantage of the parent company's
reservation system and buying power. The partnership was solidified in 1998 when Marriott
boosted its interest in Ritz-Carlton to 99 percent. By 1999 revenues from the 35 hotels it
operated around the world totaled about $1.4 billion.

Marriott International owned Ramada International Hotels & Resorts until its sale on
September 15, 2004 to Cendant. It is the first hotel chain to serve food that is completely free
of trans fats at all of its North American properties.

In 2005, Marriott International and Marriott Vacation Club International comprised two of
the 53 entities that contributed the maximum of $250,000 to the second inauguration of
President George W. Bush.

On July 19, 2006, Marriott announced that all lodging buildings they operate in the United
States and Canada would become non-smoking beginning September 2006. "The new policy
includes all guest rooms, restaurants, lounges, meeting rooms, public space and employee
work areas."

Vision :
To become the leading provider and facilitator of value-based luxury, leisure and business
experiences across the globe.
Mission :
“To create an environment conducive and helpful to both our employees and customers,
thereby encouraging our employees to work at their maximum capacity in being of service to
our customers whilst providing our customers with Good Food & Good Service at a Fair
Price”
MARRIOTT BRANDS

Full Service Lodging

• Marriott Hotels & Resorts

• JW Marriott Hotels & Resorts
• Renaissance Hotels & Resorts
• Marriott Conference Centers
• Ritz-Carlton Hotels & Resorts
• BVLGARI Hotels & Resorts
• Edition Hotels & Resorts
• Autograph Collection Hotels & Resots

Select Service Lodging

• Courtyard by Marriott
• Fairfield Inn by Marriott
• SpringHill Suites by Marriott

Extended Stay Lodging

• Residence Inn by Marriott

• TownePlace Suites by Marriott
• Marriott ExecuStay
• Marriott Executive Apartments

Timeshare

• Marriott Vacation Club International (MVCI)

• Marriott Grand Residence Club
• The Ritz-Carlton Club
• The Ritz-Carlton Destination Club
COMPETITORS

Marriott’s competitors include, Hilton Hotels, InterContinental Hotels, The ACCOR Group.
The industry is highly fragmented and no player commands more than 20 percent of the
market share. Marriott enjoys a 9 percent share in the U.S. and 1 percent at the international
level.

Competition in the industry is generally based on the quality of rooms, restaurants, meeting
facilities and services, attractiveness of locations, availability of a global distribution system,
price and other factors.

Although Marriott’s global presence across 68 countries enables it to offer services to a large
number of customers, it lags behind its competitors who are present in 80-100 countries.

The following table compares Marriott’s performance to its competitors in 2006.

Comparison to Competitors

Accor Hilton Marriott Intercontinental

Number of Hotels 4,100 2,935 2,832 3,600

Number of Rooms
720 501 514 538
(Thousands)

Geographical Presence
182 78 68 100
(Countries)

Occupancy
84.2 72.5 74.4 N.A
(Percentage)

Average Daily Rate 191.5 115.4

153.99 N.A
(USD) 6 3

Revenue PAR 136.3

82.46 114.61 N.A
(Revenue Per Available Room in USD) 3

Marriott’s occupancy rate of 74.4 percent (percentage of total rooms occupied) is one of the
highest in the industry, which also indicates that the company is more efficient in selling its
rooms as compared to its competitors. Further, although both Hilton and Marriott have
approximately the same number of hotels and rooms, Marriott charges a higher average daily
rate as compared to Hilton, which enables it to earn higher revenue per room available.
Hilton Hotels Corporation is one of the leading hotel and leisure companies in the world. It is
primarily involved in the management and development of hotels across the globe.

Earlier, Hilton focused on acquiring and owning more real estate. However, it has recently
changed its growth strategy, and it now focuses on spreading its operations through
franchisees. This enables the company to earn revenues in the form of franchisee fee without
incurring any additional costs to purchase real estate and construct hotels.

Increasing the number of franchisees also provides the company with a stable and predictable
stream of revenue, and shields it from any temporary downturn in the industry. The revenue
of a hotel company tends to fluctuate due to several reasons. One of the primary factors is the
number of customers a hotel attracts. Thus, in case the number of travelers coming to a
particular region declines, the revenues from the hotel in that region will also decline.
However, if the company owns the brand (and the hotel is run by a third-party), the company
is ensured a fixed amount (in terms of management and franchisee fee), the number of
customers coming to that hotel notwithstanding.

Intercontinental Hotels Group is the largest hotel company by number of rooms, with
590,361 rooms in over 100 countries around the world.[1] It operates a diverse portfolio of
brands across multiple economic segments, including Intercontinental Hotels and Resorts,
Crowne Plaza Hotels and Resorts, Holiday Inn, and Holiday Inn Express. IHG makes most of
its money by franchising hotels. Out of the nearly 4,000 hotels bearing IHG brands, it owns
[2]
only 18. While this operating structure means that the company makes less revenue per
hotel, it also means that the company has to commit less capital to develop and maintain its
hotels. For instance, Intercontinental Hotels Group is working on a multi-year relaunch of its
powerhouse Holiday Inn and Holiday Inn Express brands, which comprise the vast majority
of its rooms. The company also has an additional 110,000 Holiday Inn rooms in the pipeline.
The relaunch is expected to cost $1 billion dollars in total, but estimates place IHG's share of
the expenses at only $30 million, as most of the cost will be borne by the franchisers.[4]

Accor is a French multinational corporation, part of the CAC 40 index, operating in nearly
100 countries. Headquartered in Courcouronnes, Essonne, France,[3] near Évry,[4] Accor is the
European leader in hotels (Accor Hospitality) and a global leader in corporate services
(Accor Services). Accor Hospitality, the Accor hotels branch, has more than 4,000 hotels
worldwide, ranging from economy to luxury.

Through Accor Services, Accor also runs service vouchers to over 430,000 companies and
institutions and 30 million users in 40 countries: Ticket Restaurant, Luncheon Vouchers,
Ticket Alimentaçao, Clean Way, Ticket Service, Childcare Vouchers, Eyecare Vouchers,
Bien-Etre à la Carte, Worklife Benefits, EAR, Accentiv', Académie du Service, Tesorus,
Ticket Compliments.

Internal assestment

Strengths
Large Expanse of Brands
Geographic Presence
Global leader in hotels market
More franchise means bigger OI -- they have more control that it seem
Website and Social Network
Focused divestiture Efforts especially with in’t companies
Excellent Strategies to attract and retain employees
Marriott culture retention balancing against the identities of the brands
Customer Hospitality / Centric
Brand Equity
Weaknesses
Focus on US instead of international establishments (over-reliance on US market)
Over dependence on luxury brands
Lack of low-cost brands
Marriott being targeted by fundamentalists or extremists.
Financial Analysis
The following table shows Marriott’s past performance relative to the revenue drivers.
 Current ratio 1.33 1.24 1.31 1.59

0.55 0.7 0.84 1.04

Historical Performance
200820072006200 2004 2005 2006 2007
5Number of
Properties 974
2,741 2,832
2,9993,178Numb
er of Rooms
256,471 499,165
513,832 535,093
560,681
Occupancy Rate
72.2% 73.4%
74.4% 72.9%
73.5%Average
Daily Rate
$131.58 $140.26
$153.99 $141.60
$165.19 RevPAR
$94.97 $102.94
$114.61 $103.19
$121.34

Their current
ratio goes
beyond the
industry
standard but
their quick
ratio is less
than industry
standard
Liquidity
Ratios
2008

Show’s
Marriott’s
Acquisition culture, where they use the shareholder’s investments when venturing to other
avenues.
 Leverage ratios 2008 2007 2006 2005

Marriott is
the leader
in total 0.84 0.84 0.7 0.62
revenue in
the lodging
industry
but has low Net Profit Margin and Profitability Ratios due to high costs (labor) and
acquisitions
 Profitability ratios 2008 2007 2006 2005

Due to the
economic 0.07 0.1 0.08 0.5
recession
that hit the
United
States
during the
mid to late
2008 and
with
Marriott’s
strong
presence in
the US,
sales and
profit
 Growth ratios 2008 2007 2006 2005

declined
significantly.

0.85 8.30 5.28 14.37

EXTERNAL ASSESTMENT

Opportunities
Emerging Asian Travel and Tourism Markets
Trend fro low-cost goods
Distinction amongst hotel service offered
Environmentally and Family Oriented
Decrease of cost of real estate in the US
Eco-tourism
Threats
Timeshare not popular anymore
Economic Recession = lower consumer spending
Boom of Economy Hotel Brand
Political instability
Increase of Real Estate in Asia
Terrorism

IFE
EFE Strengths WEIGHT RATING WEIGHTED
SCORE
Opportunities
1. Large Expanse of Brands WEIGTH RATING
0.08 3 WEIGHTED
0.24
2. Geographic Presence 0.05 2.5 SCORE
0.125
3. Global leader 0.1 4 0.4
4. More franchise 0.05 3 0.15
5. Website and Social Network 0.07 3.5 0.245
6. Focused divestiture Efforts 0.04 3 0.12
7. attract and retain employees 0.06 3 0.18
1. Emerging Asian Travel and 0.1 4 0.4
8. culture retention against the 0.03 2 0.06
Tourism Markets
identities of the brands
2. Trend fro low-cost goods 0.07 2 0.14
9. Customer Hospitality 0.09 4 0.36
3. Distinction amongst hotel 0.1 3.5 0.35
10. Brand Equity 0.03 3 0.09
service offered
4. Environmentally and Family WEIGHT
WEAKNESS 0.08 3 RATING 0.24
WEIGHTED
Oriented SCORE
5. Decrease of cost of real estate 0.15 4 0.6
in the ASIA
6. Eco-tourism 0.05 3 0.15

Threats WEIGHT RATING WEIGTHED

1. over-reliance on US market 0.15 4 0.06
SCORE
2. Over dependence on luxury 0.12 3 0.36
brands
3. Lack of low-cost brands 0.08 2 0.16
4. targeted by fundamentalists 0.05 1 0.05
or extremists
1. Timeshare not popular 0.08 3 0.24
TOTAL 1.00 2.6
anymore
2. Economic Recession = lower 0.10 4 0.4
consumer spending
3. Boom of Economy Hotel 0.10 4 0.4
Brand
4. Political instability 0.09 3.5 0.315
5. Terrorism 0.08 3 0.24
Total 1.00 3.48
SWOT MATRIX
 Strength Weaknesses
1. Large Expanse of Brands 1. Over-reliance on US
2. Geographic Presence market
3. Global leader 2. Over dependence on
4. More franchise luxury brands
5. Website and Social Network 3. Lack of low-cost brands
6. Focused divestiture Efforts 4. targeted by
7. attract and retain employees fundamentalists or
8. culture retention against the extremists
identities of the brands
9. Customer Hospitality
10. Brand Equity
Opportunities Strengths-Opportunities Weakness-Opportunities
1. Emerging Asian Travel Acquire or establish hotels in Asia Expand in Asia
and Tourism Markets Initiate Budget and Economic Brands Build high-end inns
2. Trend fro low-cost Divest in limited-service brands with Joint ventures in other high risk
goods the economy brands of other companies countries and use the local’s name
3. Distinction amongst Differentiation of a particular brand in Build economy brands over cheap US
hotel service offered certain locations land where the savings in the land are
4. Environmentally and Apply eco-friendly efforts, and eco- directly passed onto the
Family Oriented tourism across the chain consumers/customers
5. Decrease of cost of real Acquire US properties to reduce
estate in the USA debt/cost of new establishments
6. Eco-tourism Strategically Build hotels/resorts that
would most preserve the environment

Threats Strength-Threat Weaknesses-Threat

1. Timeshare not popular Company wide restructuring to reduce Work towards expansions overseas due
anymore cost and increase efficiency to economic meltdown
2. Economic Recession = Expand today to maintain lead and reap Use relationship with employees to
lower consumer the rewards later on especially in Asia temporarily reduce salary to be more
spending Provide financial assistance to competitive
3. Boom of Economy franchisees to start or expand operations Joint Ventures with other companies
Hotel Brand (preferably international) especially in new “low cost” businesses
4. Political instability Slowly depart from time-share hotels Build economy brands now
5. Terrorism Hire local employees by collaborating
with local government units
Hire, train and support the localities
where Marriott operates in to win the
hearts and minds
BCG MATRIX

HIGH STAR QUESTION MARK

• International

MARKET
GROWTH
CASH COW
• Limited service
• Full service
• Luxury
LOW •

DOG
LOW
• Timesharing
HIGH
•
MARKET SHARE

Space Matrix

Internal Strategic PositionAverage Points

Financial Strength (FS)4.28
Competitive Advantage (CA)-1.5
External Strategic PositionAverage Points
Environmental Stability (ES)-4.1667
Industry Strength (IS)4

Corporate level strategy:

EXPANSION

Marriott International announced plans to significantly expand its presence in the global
marketplace with the addition of more than 30,000 new hotel rooms in countries such as
India and China. The Bethesda-based company will also add tens of thousands of hotel
rooms to it’s U.S. and Canadian portfolio.

Despite the expansion Marriott has no plans to hire additional employees in its corporate
headquarters, said Stephanie Hampton, a spokeswoman for the company.

Marriott made the announcement at a day-long investors conference in Paris, where J.W.
Marriott Jr., chairman and CEO, and other executives outlined the company’s global strategy.

“The lodging industry is a global business and three factors dominate it: global wealth,
demographics and trade,” Marriot said.

The global tourism industry is expected to generate more than $6 billion in revenue this year,
according to figures from the World Travel & Tourism Council, with China expected to lead
the world in tourism growth through 2016. Marriott currently has 30 hotels in China.

Marriott’s global expansion will include a number of its brands, such as Courtyard by
Marriott and the Ritz-Carlton. About 400 of Marriott’s 2,800 hotels are located outside the
U.S. In addition to China and India, Marriott will focus on building out in Asia, as well as in
Africa and the Middle East. For example, the company has plans for a 274-room high-end
JW Marriott in Algeria and several hotels in Qatar.
In the U.S. and Canada, Marriott has plans to buy and convert existing hotels to its own
brands. All told, there will be an additional 85,000 to 100,000 Marriott hotel rooms around
the world by 2009 for a total of 600,000 rooms.

Marriott now has 1,000 hotels with fast Internet

Marriott International is reporting that the more than 1,000 of its hotels worldwide have been
installed with high-speed internet access, representing the largest distribution of high-speed
internet access in the hotel industry. Marriott hotels in major business travel destinations,
including New York, Washington, D.C., San Francisco, Chicago, London, Frankfurt, Tokyo,
Singapore, and Hong Kong now offer high-speed internet access.

The service is available at Marriott, Renaissance, Courtyard, Residence Inn, TownePlace

Suites, Fairfield Inn and SpringHill Suites hotels.

Marriot Strategies

Marriott needs to pursue market development in Asia with new brands that extend its New
World and Ramada presence. Marriott has acquired an operating and development team of
experts with the Renaissance acquisition who are familiar with the market. It should use this
advantage and its superior management abilities to reach its goal of 200 hotels in the area by
the year 2000. Marriott can capitalize on synergies associated with managing New World,
the owner of which has agreed to further expansion, in order to gain more market share in an
area with high growth potential.

A potential implementation problem with this strategy lies in the threat of sour relations
between owners of the hotels and the Marriott (the operator). The owners of the hotels must
worry about financing in terms of generating enough net operating cash flows to provide debt
service and acceptable equity returns while Marriott is more focused on earning management
fees. This could be a potential conflict of interest, but Marriott has enough experience
internationally and with management that this issue should not pose too many problems.
Another implementation issue is associated with the brand names that Marriott has acquired.
New World exists in China and Hong Kong while Marriott holds the Ramada brand overseas
and HFS owns the US rights. The CEO of Ramada would like Marriott to sell the rest of the
rights to HFS (Diamond). I feel that it is in Marriott's best interest to hold onto the Ramada
name because it gives the company many international properties, but to consider changing
the name altogether to associate it more closely with the Marriott name. This would separate
the US operations from the International, and allow Marriott to further capitalize on its brand
equity. The New World name should be kept the same since it is so prevalent and well-
known in the Asian market that Marriott wants to expand into.

Marriott new sales force strategy:

Marriott International has launched a new sales structure ─ Sales Force One ─ a
companywide customer-centric initiative, aimed at simplifying the sales process for
customers and penetrating untapped markets. The structure of Sales Force One allows the
customer to work with one primary point of contact, who represents all brands and
properties, enabling Marriott, theoretically, to accommodate all of the customers’ needs in a
one-stop fashion.

Recognizing the increasing complexity and variety of channels through which customers
book rooms and meetings, Marriott International conducted extensive research to ensure that
current sales strategies resulted in efficiencies and elevated levels of sales performances.

The strategy also encompasses the relocation of sales representatives from individual
properties, in which they were primarily focused on booking business for one specific
property, to these regional sales offices, referred to as home offices, focusing on a select
group of accounts headquartered in a specific area in the market. As opposed to serving only
one property, these representatives have the ability to sell business for their accounts in any
property within their region and, if need be, nationwide. Additionally, to tie compensation to
results, representatives have a clearly-defined set of booking performance goals for their
accounts ─ and for specific properties within the region. Many of the smaller properties, with
little or no meeting space, will no longer have on-site sales associates, while some of larger
properties will continue to have on-site sales associates to handle larger and more complex
group business.

The focus of Sales Force One also revolves around proactively creating new leads and
opportunities through organizing and penetrating untapped markets. Research indicated
individual properties reported that they lacked the man-power and capital to successfully
reach all of their potential markets and clients. Sales Force One is Marriott International’s
solution to this challenge. By organizing untapped accounts into a nationwide database and
structuring the proactive development of relationships with potential customers, Marriott
International strongly believes it can more effectively penetrate the overall market.
By sharing sales resources, clearly defining roles and responsibilities, tying compensation to
results, and aggressively pursuing under-penetrated high-value accounts, Sales Force One is
Marriott International’s initiative to gain a competitive advantage in relationships with
customers ─ along with owners and franchisees ─ allowing for a better alignment between
all of Marriott International’s stakeholders. As Marriott International acknowledges, this
market-driven, new sales strategy and structure may undergo adjustments and modifications
as it is rolled out throughout the country to ensure its success and maximum impact in the
market. The implementation of such a wide-ranging program underscores the importance for
the hotel industry to address the ongoing changes in travel managers’ and meeting planners’
booking strategies.

Function level strategy

Provide best products possible

Customers associate quality with Marriott. They expect it and will pay for it. Managers must
see that customers receive that quality in every area by not compromising on the company's
high standards. Providing the best products possible also means giving customers what they
want. By paying attention to trends and preferences among diners and travelers, you can better
serve your customers. It all starts with basic quality. You can change or enlarge menus, increase
advertising, reduce prices, increase portions, renovate, change uniforms, or even increase
services. But the bottom line is quality. Restaurants, for example, must offer a variety of food
items that are always fresh, tasty, and attractively presented. Regardless of your operation,
maintaining quality will do just as much -- and probably more -- to improve financial results than
any other actions. In many cases, employees are instructed to follow Standard Operating
Procedures, recipe cards and similar guidelines to consistently produce the best product possible.
At other times, managers must rely on an employee's own style and initiative to do the job right.
Whether or not your employees must "follow the book," the attention you pay to their actions is
the true guarantee of a quality product being produced. A manager's job is to deliver an
outstanding product at a fair price and make money doing it. Managers must realize that there are
always operating costs that could be reduced through more effective scheduling of hourly
workers, through more competitive purchasing and through being careful about everything they
spend money on. As one of those managers, you must try to control your expenses and carry
forth the Marriott traditions of giving value to your customer along with attention to detail and
attention to your people. When you do, you will help ensure that the company's other tradition -
that of profitable growth - will always continue.

Keep units clean and attractive

Clean operations start with people who work clean. Whether it's untrained or sloppy
personnel, improper or inadequate equipment, or an unorganized work environment,
managers are always looking for the why behind an unclean situation so they can eliminate
its cause, not just clean up the mess. Exteriors should be maintained as carefully as interiors.
Parking lots, driveways and sidewalks should be cleaned daily or more often if needed. Areas
farthest from main buildings should receive the same attention as areas closest to main buildings.

Hands-on management

The more a manager has a sense for the details which make an operation or department
succeed, the more successful that manager will be. Operation managers learn these details
best from habitually managing "on the floor" - getting out of their offices to directly
supervise employees and interact with customers to learn what they want and how well they
are being served. Staff managers stay in touch with the operations and people they support in
order to understand and meet their needs. You exert a powerful, positive influence or your
people and customers through your willingness to Set The Pace, Be Involved In Details, and
Follow Through. Marriott managers constantly focus on results by continuously reevaluating
and challenging what they and their people are doing.
Concern for employees
Marriott's concern for employees starts with its "Guarantee of Fair Treatment" policy, an internal,
decentralized means for all employees to express problems and have them resolved in a timely
manner. In the early years, founder J. Willard Marriott knew most of his employees by name.
Even today, Marriott's top executives and managers make every effort to communicate through
property visits, memos, rap sessions, and regularly scheduled meetings. Yet, as the company has
become larger and larger, the tradition of top management knowing all employees has become
impossibility. Employees, however; still need to feel that they are important and that somebody
cares. That "somebody" is you, their manager. The time you take - in your own style - to show a
personal interest in your people is an investment that will pay high dividends in building
teamwork and increasing productivity.