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Background Information

 

Marriott
International is the world’s largest hotel company with 90 years of leadership,
6,400 properties and over 1.2 million rooms across 126 countries worldwide. Marriott
offers the largest and most extensive brand portfolio that caters to the different
travel needs and generations (Fig.1).

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Fig. 1: Marriott’s 30 Distinct Brands

 

Strengths of Company

 

·     
Strong
Brand Presence

We adopt an asset-light business model by
placing high emphasis on management contracts and franchising, as we believe in
minimising our capital investments, risks and maximising our returns.

Currently, we have a large percentage of managed and franchised hotels and only
2 percent of owned ones (Fig. 2).

Fig. 2: Business Model

 

This approach has provided significant growth
and successfully created a strong brand presence worldwide (Fig. 3). We are
targeting to achieve our three-year growth plan of opening one hotel every 14
hours. This would not be possible without good partnership with our owners and
franchisees who have benefitted greatly and achieved their business objectives.

 

Fig. 3: Brand Presence

 

 

 

·     
Wide
Distribution Channels

With our
recent acquisition with Starwood Hotels and Resorts, it gave us a competitive
advantage and a vast global distribution network. It creates opportunities for integrated revenue generation and cost
efficiencies (Fig.4). The extensive network creates ease of access for our
customers when booking their stay. The merger allows shared resources, services
and best practices; bringing about the best in every area in pursuit of operational
excellence. We strive to effectively utilize our size and wide distribution.

Also, we want to stay ahead in competition by continually investing in our
brands using innovative technology, enhancing designs and amenities.

Fig. 4: Marriott’s Powerful Network of
Channels

·     
Linked
Customer Loyalty Programs

Marriott’s
loyalty program is the combination of Marriott Rewards, Starwood Preferred
Guest and Ritz-Carlton Rewards. It has more than 100 million members with
approximately one million new members each month coming onboard the program.

 

Our valued
guests amount half of our total rooms sold, with them returning, they would
stay more and spend more in the hotels. The strong market positioning opens the
window for greater profitability which forecast an increase in growth across
all our properties, especially in underpenetrated markets. We anticipate at
least $250 million of cost savings by mid-2018.

 

·     
Responsible
Business

Marriott upholds one of its core value “We
Serve Our World” and commits to support the local communities and its
environment wherever we do business. We established “serve360” following
closely to our 2025 Sustainability and Social Impact Goals (Appendix A), and
the UN Sustainable Development Goals.

 

Financial Information

 

Based on our financial reports, all five
areas of our revenue-generating segments increased, showing an upwards trend
across the years. In year 2016, we hit our history-making record of $17,072
million total revenue (Appendix B). Despite the acquisition with Starwood, we
managed to control our expenses tightly. They are attributed by the improved
productivity, reduced utility costs, favorable legal settlement and foreign
exchange advantages.

 

Marriott uses
largely Revenue Per Available Room Rate (RevPAR) to track performance,
alongside with other metrics like Average Daily Rate (ADR) and Occupancy Rate. The increase in demand and occupancy rate led to RevPAR growth. RevPAR for comparable
worldwide comparable systemwide for 2016 has increased by 1.8% (to $113.50),
driven by a 1.0% rise in ADR (to $156.53) and 0.6% (to 72.5%) growth in
occupancy, as compared to 2015 (Appendix C).

 

We are excited on what lies ahead as we have
plans to boost our growth by expanding up to 300,000 rooms by 2019; assuming RevPAR
will grow 1 to 3 percent and EPS by 17 to 21 percent. Grow together with Marriott
today!

 

 

References

 

Marriott International Maps Future Growth at Investor Day. (2017, March
21). Retrieved January 25, 2018, from http://news.marriott.com/2017/03/marriott-international-maps-future-growth-investor-day/

 

GROW WITH THE WORLD’S FAVORITE TRAVEL COMPANY. (n.d.). Retrieved January
25, 2018, from https://hotel-development.marriott.com/

 

SERVE 360 DOING GOOD IN EVERY DIRECTION. (n.d.). Retrieved January 25,
2018, from http://serve360.marriott.com/

 

MAR Income Statement. (n.d.). Retrieved January 25, 2018, from
http://www.nasdaq.com/symbol/mar/financials?query=income-statement

 

Revenue, EPS, & Dividend – Marriott International (MAR). (n.d.).

Retrieved January 25, 2018, from http://www.nasdaq.com/symbol/mar/revenue-eps

 

Financial Information. (n.d.). Retrieved January 25, 2018, from http://investor.shareholder.com/mar/marriottAR16/10k-index.html

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