Hospitality Business : Marriott International Inc.

Dan Cohrs, the vice president of project finance at Marriott Corporation, is preparing his annual recommendations for the hurdle rates for each of Marriott’s three divisions: lodging, contract services, and restaurants. However, this is a complicated process because finding beta, cost of debt, and cost of equity in order to find weighted average cost of capital, or WACC, must be calculated using proxy firms and divisional data.

Marriott International was founded on May 15, 1927 by J. Willard Marriott in Washington D.C. It started out as a root beer stand which grew into a chain of restaurants and hotels (Marriott International Inc., 2013). Now Marriott International has around 3,150 properties for lodging in the United States and 67 in other countries (Marriott International Inc, 2012). The Executive Chairman is Bill Marriott and the President and CEO is Arne Sorenson. Marriott International was also ranked 217 in the Fortune 500 in 2012 but ranked number one in the fortune 500 for its industry (hotels, casinos, resorts) (Cable News Network, 2012).

Before Marriott International became the largest hotel company in the world, it began as root beer stand in Washington D.C. in 1927. Young newlyweds, J. Willard and Alice Marriott, found instant success by offering good food at good prices. Soon, they added hot food items to their menu and restaurant, "Hot Shoppes", was born (Marriott, p. 2). From there, they ventured into airline catering, and in 1957, made history by opening the first hotel in Arlington, Virginia (Marriott, pp. 2-3). By 1982, Marriott became a global phenomenon and revolutionized the hospitality industry through its creativity and constant innovation. Today, the company is known for its work environment and excellent business operations, which are based on five core values: “put people first, pursue excellence, embrace change, act with integrity, and serve our world” (Marriott, p. 5). As of 2015, the company had 20 brands running 4,175 hotels in 80 countries and occupies 15% of the hospitality market share (Matthews, 2016 , p. 1).

The hospitality industry in the United States is one of the fastest growing branches of the market economy. The high growth rates of the hotel industry are caused not only by the growth of internal and external economic ties between countries, but also by the growth of foreign tourism. The modern hotel business in the US is a powerful industry, in the full sense of the word. The entire American hotel industry, in the first place, is designed for the domestic tourism market. For example, in Chicago for a year there are 33 million tourists, and only 2 million of them are foreigners.

Marriott is renowned for its elegant and comfortable hotels and resorts. The company caters to a targeted customer base, ranging from the frequent corporate business traveler to the family enjoying their occasional weekend get-away. Marriott has continued its rise in the lodging, contract services, and restaurant industries. The company continuously strives to meet the needs and wants of its customers while strategically maneuvering the rigors of today’s competitive and ever-evolving market of glamorous destinations and convenient services. In order to remain relevant in a highly-competitive environment, Marriott must strike that successful balance of minimizing costs, and gaining and effectively

The idea of repurchasing shares was no stranger to Bill Marriott by January 1980. Almost five million shares of common stock had been repurchased on the open market by Marriott Corporation during 1979 at a total cost of $74 million and an average price of $15.16 in the belief that they were undervalued—a belief that still was not fully reflected in the market price. At $19 5/8, the stock was selling at only six times cash flow per share; and its price/earnings ratio of nine was a far cry from historical multiples as high as fifty times as recently as 1973. Its low price seemed to offer once again an obvious opportunity to benefit shareholders. However,

The purpose of this report is to evaluate and analyse the Marriott Hotel chains sustainable tourism development. The hotel has a well-established history of being known as one of the most prestigious hotels. The company operates successfully on a global basis. Marriott has “more than 6,000 properties in 122 countries and territories” (Marriott, 2017a). This Business report will cover the internal and external challenges & issues of implementing sustainable tourism policies, the companies approach to sustainability and the impact of the company’s policies and activities in fostering sustainable tourism in the wider global industry. The Social, economic, and environmental aspects, also known as the triple bottom line will help

Since its foundation in 1927 Marriott Corporation grew into one of the leading lodging and food services in the US. With three major business lines: lodging, contract services and related business, Marriott has the intention to remain a premier growth company. To achieve this goal the corporation’s strategy is to develop aggressively appropriate opportunities within their business lines. Marriott would like to be the preferred employer, the preferred provider and the most profitable company in each of the operating areas. The financial strategy includes four key elements:

Marriott is recognized as an American diversified hospitality company. According to Marriott website’s, it was founded by J. Willard Marriott and his wife Alice Marriott. Around the world, Marriott has more than 4,400 properties in 87 countries and territories. Internationally, Marriott operates 19 brands such as The Ritz Carlton, JW Marriott, Delta Hotels and Resorts, Bvlgari Hotels & Resorts etc. In 1957 John and Alice Marriot opened their first hotel in Arlington, Virginia. In 1993, Marriott International was formed when Marriott Corporation divided into two companies, Marriott International and Marriott Corporation. Marriott was the first hotel that offered for the guest to book reservation online via Marriott 's Automatic Reservation System for Hotel Accommodations in 1995. In 2015, Marriott International reported revenues of nearly $14 billion. By building more hotels and expanding business around the world, Marriott has hired more than 200.000 employees in 2013. At Marriott, employees never stop searching for inventive ways to serve their customers, provide opportunities for their associates, and grow the business. The Marriott that began as a nine-seat A&W root beer stand is recognized today as a top employer and for its superior business operations, which it conducts based on five core values: put people first, pursue excellence, embrace change, act with integrity, and serve their world.

Marriott International, Inc. is one of the world's leading lodging and contract services companies. The company has its roots in the restaurant industry, beginning with a chain of 'Hot Shoppes' begun by J. Willard (Bill) and Alice S. Marriott in 1927. In 1957, "another business segment made its debut when Marriott's first hotel, the Twin Bridges Marriott Motor Hotel, opened in Arlington, Virginia" (History of Marriott International, 2012, Funding Universe). After its restructuring during the 1980s, "Marriott's three core businesses became lodging; food and services management; and food, beverage, and merchandise operations at airports and on turnpikes" (History of Marriott International, 2012, Funding Universe). Today, Marriott is heavily diversified within the hospitality industry: "Marriott International has two operating groups: Marriott Lodging, which generates about 60 percent of company revenue, and the Marriott Service Group, its contract services operation" which operates contract services such as food and facilities management and senior living facilities (History of Marriott International, 2012, Funding Universe).

Marriott International envisions itself to be the world’s lodging leader. Its mission is to provide the best possible lodging services experience to customers who vary in backgrounds, language, tradition, religion and cultures all around the world. Marriot is committed to environmental preservation through using environment-friendly technology and engages in social responsibility and community engagement.  We value our shareholder’s so we will only take steps that will ensure our growth. Most importantly, through our “spirit to serve”, we emphasize the importance of Marriott’s people and recognize the value they bring to the organization’s growth and success. It aims to increase revenues by 9% every year, to increase

Sage Hospitality is a hotel management company. They are recognized as one of the most innovative groups in this industry and specialize in managing and devloping independent as well as premium brand hotels. Sage Hospitality was founded in 1984. They have partnership with many international brands such as Marriott International, Starwood Hotel and Resorts, IHG, Hyatt and Hilton Hotels and Resorts. Apart from having partnership, this company is also coming up with their own branded hotels.

Within the luxury tier, many of the players do not actually own the hotels themselves, but instead manage the operation of the business, similar to that of FSH. In the luxury segment, competition for acquiring new management agreements becomes very high as hotel owners make their choices based on the quality and value of a company's management service and most importantly, its brand name. Moreover, guests who choose to stay in luxury hotels are commonly not very price sensitive, and thus it is essential that a hotel distinguish itself amongst its competition by providing value added services as well as maintaining an untarnished, reputable brand name and image.

Having just analyzed the general environment surrounding the upscale and luxury hotel industry, the next step in determining whether such an industry is attractive or not is to conduct an in depth external analysis of the threats and opportunities facing the industry. Thanks to the help of Michael Porter and his Five Forces Model, this analysis is not nearly as difficult or as time consuming as it may seem. According to Porter, there are five forces which determine the competitive intensity and therefore attractiveness of a market. These forces include the threat of entry, the threat of rivalry, the threat of substitutes, the threat of buyers,

Marriott is a multi brand company with a Global Portfolio that providing lodging that fit within many market segments. This report will discuss briefly Marriott’s Portfolio of hotels, what they do, briefly examine a number of their key marketing strategies and examine how they are implemented, measured and ask the question does this make them market leaders?