Marriott International Inc - Travel and Tourism - World

Euromonitor International : Global Company Profile January 2009

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List of Contents and Tables

Strategic Evaluation................................................................................................................................................ 1 SWOT analysis.......................................................................................................................................................... 1 12 Month Highlights ............................................................................................................................................... 2 2007-2008 ................................................................................................................................................................. 2 Prospects .................................................................................................................................................................. 3 Core Businesses ........................................................................................................................................................ 3 Growth Opportunities ............................................................................................................................................... 3 Limited Potential....................................................................................................................................................... 5 Table 1 Marriott International Inc: World Sector Sales Performance 2007.................................... 5 Table 2 Marriott International Inc: Hotels Regional Sales Performance 2007 ............................... 5 Company Strategy .................................................................................................................................................. 5 Strategic Objectives and Challenges......................................................................................................................... 6 Ownership Events ..................................................................................................................................................... 6 Table 3 Marriott International Inc: World Shares & Rankings in Travel & Tourism by Sector 2006-2007.......................................................................................................... 6 Table 4 Marriott International Inc: World & Regional Shares in Travel & Tourism by Sector 2007........................................................................................................................ 6 Company Structure ................................................................................................................................................ 7 Marriott International Inc......................................................................................................................................... 7 Summary 1 Marriott International Inc: Travel & Tourism Key Facts................................................... 7 Production and Distribution ..................................................................................................................................... 7 Brand Assessment ................................................................................................................................................... 7 Brand Strategy .......................................................................................................................................................... 7 Marriott Hotels & Resorts ........................................................................................................................................ 8 Courtyard.................................................................................................................................................................. 8 Residence Inn............................................................................................................................................................ 9 Renaissance Hotels & Resorts .................................................................................................................................. 9 Ritz-carlton ............................................................................................................................................................... 9 Appendices............................................................................................................................................................... 9 Financial Summary................................................................................................................................................. 10 Table 5 Marriott International Inc: Financial Summary 2003-2007 ............................................. 10 Company Background............................................................................................................................................. 10 Summary 2 Marriott International Inc: Historical Development ........................................................ 10 Summary 3 Marriott International Inc: Subsidiaries 2007 .................................................................. 15 Summary 4 Marriott International Inc: Travel & Tourism Brands 2007............................................. 15 Summary 5 Marriott International Inc: Company Locations .............................................................. 15 Summary 6 Marriott International Inc: Websites................................................................................ 15

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MARRIOTT INTERNATIONAL INC

STRATEGIC EVALUATION
SWOT analysis
Strengths Global leader Marriott International Inc is the leader in the global hotels market, with a near 5% value share in 2007 and a large geographic presence. Unhampered by hotel ownership the company owns less than 1% of its hotel portfolio and is thus less vulnerable to real estate price fluctuations than rivals. Moreover, its emphasis on franchising facilitates the rapid expansion of its portfolio. Focused pipeline development Marriott International is pursuing a growth strategy to further consolidate its presence in foreign markets and capitalise on the booming travel and tourism industries of emerging markets, which should continue to serve its business well in terms of revenue over the forecast period. Unfortunately, the global economic downturn is hindering expansion plans, particularly as consumer confidence softens and demand for travel accommodation falls. Strong internet presence Marriott International's website guarantees the best rates available, enticing price-conscious consumers away from third party websites. IT solutions Marriott International is upgrading its properties with technology that responds to the needs of business and leisure travellers. In the latter part of the review period, for example, it has transformed its public areas to encourage guests to work and socialise through the adoption of the latest design, technology, food and beverage offerings.

Weaknesses Domestic market focus despite international expansion, Marriott International remains heavily reliant on the US, making it sensitive to the changing fortunes of its domestic market. Luxury brands mid-scale and upscale hotel brands leave Marriott International vulnerable to any potential global economic downturns, particularly given that economy travel accommodation is gaining increased penetration in major destination markets. Courtyard brand the Courtyard brand is maturing and losing its core business customers. Industry experts believe the revitalisation process may not be enough to lure customers back mainly due to a fierce competitive environment, packed with exclusive offers and increasingly modern accommodation, particularly at a time when business travellers want to cut costs. Lack of a low-cost lifestyle brand Marriott International does not have a low-cost lifestyle brand in its product portfolio, like aloft from Starwood and Hotel Indigo from IHG. Uncertainty around the launch of "Edition" the launch of "Edition" by Marriott, a new genre of a lifestyle brand that combines an intimate and unique travel accommodation experience, will come at a turbulent period, characterised by weak demand for luxury hotels in the US.

Opportunities Emerging markets in order to offset the negative impact of such a challenging business environment and to capitalise on the opportunities present in emerging markets a number of hotels have turned to them. Marriott International is no different and Asia-Pacific countries became key target markets. Individuated experience the growing consumer demand for an individuated travelling experience is generating potential for hotel operators to develop distinctive brands, properties and services.

Threats Consumer confidence general economic and business conditions, which adversely impact the income levels of potential travellers, coupled with a rising lack of confidence in strong markets like the US, can

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have a negative impact on Marriott International's operations. This is particularly true given its strong presence in North America, where it is the largest hotel brand in value terms with a strong focus on midscale and luxury brands. A downturn in business travel poor economic conditions are forcing businesses to reduce travel and spend less on travelling. Marriott's brands, especially the luxury brands, are likely to see less travellers. Economy brand development the rapid growth achieved by economy hotel brands in the last three years poses a potential threat for mid-scale, limited-service brands such as the SpringHill Suites. Credit crunch there is a fear that the global travel and tourism industry will see a corresponding slowdown in revenue as consumers spend and travel less in the short term. Marriott International is dependent on the availability of consumers willing to enter into credit agreements, and, therefore, a general spending reduction will result in a drop in revenue. This also applies to potential investment from prospective hotel owners and franchisees looking to fund construction, renovations and investments.

12 MONTH HIGHLIGHTS
2007-2008
Marriott International Inc remained the absolute global leader in travel accommodation, with total sales of US$18 billion in 2007. Such a performance is the result of a business strategy that is focused on the continuous development of strong brands and business competencies. The unstable economic environment as well as the non-stop consolidation within travel accommodation observed in the latter part of the review period, however, is likely to continue impacting Marriott International's operations in the short term. In an attempt to offset the negative impact of a challenging business environment, Marriott International has aggressively expanded its international presence. Its hotel pipeline development includes numerous properties set to open through 2011 in India, China, Vietnam, Thailand, Norway, Sweden, Saudi Arabia, Latin America, the Caribbean and even in the US. The global economic downturn, however, is hindering expansion plans, particularly as consumer confidence softens and demand for travel accommodation falls. In line with its international expansion strategy, Marriott International launched a Global Language Learning programme, with 30 new language offerings for employees to learn how to speak different languages. Aside from investing heavily on new properties, Marriott International has also enhanced the benefits of its Marriott Rewards programme to compete head-to-head with Hilton and IHG, boost overall brand loyalty and increasingly attract new customers. Therefore, in 2008, it announced the introduction of no blackout dates in January 2009, named Aeromexico as its new airline partner, and started offering members the possibility to redeem points for trips on 17 cruise lines. In August 2008, Marriott International also relaunched its MegaBonus promotion, whereby members could earn up to 25,000 bonus points when using a Visa card to pay for travel accommodation. In 2008, Marriott International upgraded its Spanish language website by adding a new functionality which allows Spanish-speaking Marriott customers to compare hotel accommodations in their language. The new function allows customers to search for travel accommodation based on their preference of hotel category, or amenity. In October 2007, the company announced plans to open 59 hotels in nine Asian markets, including multiple openings in China, India and Thailand, by the end of 2010. Marriott's extended-stay Residence Inn brand launched a distinctive new advertising campaign in 2007 to showcase its new Innfusion dcor. In July 2007, the company's Courtyard, Residence Inn, Fairfield Inn, TownePlace Suites and SpringHill Suites brands eliminated Wi-Fi charges for guests in lobbies and other public areas in order to target on-thego customers and boost efforts to develop multi-functional public interiors. In 2007, Marriott deepened its commitment to attracting Generation X families by entering into an agreement with Nickelodeon for the creation of a chain of upscale water park resorts. The plan includes the launch of 20 parks by 2020, targeted directly at children and parents.

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PROSPECTS
Core Businesses
Marriott International Inc is engaged in the operation and franchising of hotels, the development and operation of holiday ownership resorts, the operation of Marriott Executive Apartments, the provision of furnished corporate housing through its Marriott ExecuStay division and the operation of conference centres. Between 2006 and 2007, its global value share remained unchanged as a result of the unstable economic environment. Facing maturity and intense competition in key markets, most notably the US, Marriott International is looking to diversify its consumer base beyond the business travellers and attract a wider range of travellers, including Generation X families.

Geographic scope As of October 2008, Marriott International had a diverse portfolio of over 3,000 travel accommodation outlets representing 19 brands in 67 countries and territories. North America remained at the core of Marriott International's operations in 2007. It is worth noting, however, that the company is a top ranked player in nearly all regions due to its strong presence in key destination countries. In early 2008, for example, it operated six hotels in India the JW Marriott Hotel Mumbai, the Goa Marriott Resort Panjim, the Hyderabad Marriott, the Renaissance Mumbai Hotel & Convention Center, the Mumbai Lakeside Chalet Marriott Executive Apartments and the Courtyard by Marriott Chennai ; two hotels in Vietnam the Renaissance Riverside Saigon and the New World Hotel Saigon; and seven hotels in Thailand the JW Marriott Hotel Bangkok, the Bangkok Marriott Resort & Spa, the Courtyard by Marriott Bangkok, The Mayfair, Bangkok Marriott Executive Apartments, the JW Marriott Phuket Resort & Spa, the Hua Hin Marriott Resort & Spa and the Pattaya Marriott Resort & Spa.

Marketing appeal Through 2007 and into 2008, Marriott International launched advertising campaigns for its Marriott brand. Focused on business travellers, the advertisements aimed at making a rational and emotional connection with guests. The advertisements addressed Marriott's ability to adjust to distinct cultures while still providing a synchronised performance across its brands. The advertisements were featured at airports, targeted television stations such as CNN and select airlines. In the same period, Marriott International launched a campaign featuring its Residence Inn brand, which focuses on extended stay guests. Also through artistic talent (trapeze artists, fire-eaters, etc.), the advertisements represented the guest's ability to manage an extended stay through Residence Inn's amenities, all of which are suitable and specific to this audience. It also featured the brand's Innfusion dcor, featuring different zones in the room for extended stay travellers: sleeping, eating, working, relaxing.

Growth Opportunities
Travel accommodation sales are expected to maintain an upward trend but develop at a slower pace compared to the review period, growing at a compound annual growth rate (CAGR) of 5%, to reach US$684 billion in 2012. In general, international expansion is a way for large US-based chains like Marriott International to combat a downturn in travel in the US, which has been hard hit by a decline in the economy, and cultivate loyalty among travellers. As a result, the company is expected to continue to develop its international pipeline aggressively.

Emerging markets In order to offset the negative impact of such a challenging business environment and to capitalise on the opportunities present in emerging markets, Marriott International has developed a strong pipeline

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development strategy for the next three years. According to industry sources, more than 60% of its fullservice pipeline is outside the US. In 2007/2008, the company announced the following pipeline developments: INDIA: 18 new properties and one expansion with a total of more than 4,500 rooms in Bangalore, Chennai, Pune, Kolkata, Chandigarh, Ahmedabad, Amritsar, Gurgaon, Hyderabad, Kolkata New Town, Noida, and the Mumbai International Airport scheduled to open through 2011. CHINA: 18 new properties in Shenzhen, Beijing, Hangzhou, Macao, Hong Kong and Guangzhou scheduled to open through 2012. VIETNAM: The luxury JW Marriott brand is set to be introduced in Danang by 2011. THAILAND: 10 new properties in Bangkok, Phuket and Hua Hin scheduled to open through 2010. MIDDLE EAST: 39 new properties are scheduled to open through 2011. Marriott International is also expected to manage nine new properties in the Kingdom of Saudi Arabia starting in 2010. The new properties will be located in Riyadh, Jeddah, Dammam and Jubail and represent The Ritz-Carlton Hotels, The Ritz-Carlton Residences, Marriott Hotels & Resorts, Marriott Executive Apartments and Courtyard by Marriott brands. LATIN AMERICA and CARIBBEAN: Marriott International has announced plans to open hotels in Ecuador, Honduras, Peru, Suriname and Trinidad & Tobago by 2010. MEXICO: In July 2008, Marriott International announced plans to add 29 hotels to its Mexican portfolio in the next five years. It is important to note, however, that the global economic downturn is hindering expansion plans, particularly as consumer confidence softens and demand for travel accommodation falls. Asia-Pacific is forecast to be the fastest growing regional hotels market over the 2007-2012 period, with a CAGR of 8%. Its dynamic performance is set to be driven by major emerging markets, most notably China and India, which are seeing economic expansion, developing travel infrastructures, growing middle classes and an increase in foreign tourism generate demand for hotels. Along with Thailand, these are key target markets in the company's plans to expand its hotels network in the region by the end of 2010. Marriott International is in a strong position to exploit rapid development in Asia-Pacific because it has already established a significant foothold in the region. According to Ed Fuller, president and managing director of international lodging for Marriott International, the company's capacity to have such a strong pipeline development in the region is founded in part on the success that its existing portfolio is enjoying. He states that, "When developers consider a hotel management company for their asset, they know Marriott will deliver".

Developed markets Marriott International also continues to expand its presence in developed markets. In October 2007, for example, the company announced plans to expand its presence significantly in Scandinavia through a multiple franchise agreement with Scandinavian Hospitality Group. The agreement is expected to result in the opening of 15 hotels under the Marriott, Renaissance, Courtyard and Marriott Executive Apartments brands in Sweden, Norway and Finland by the end of 2013. Marriott International's first hotel in Scandinavia, the Copenhagen Marriott, opened in 2001.

Unique experience In core developed markets, the shift in consumer demand towards lodging that provides an individuated experience with an emotional aspect is set to provide growth opportunities during the forecast period. It is worth noting, however, that leading industry players such as Marriott International are already considering these opportunities and developing products such as "Edition", a new genre of lifestyle brand that combines an intimate and unique travel accommodation experience. Each distinct property for the Edition brand is expected to emphasise design, quality, originality, authenticity and character, while delivering impeccable personalised service. "Edition" luxury hotels are planned for Paris, Madrid, Costa Rica, Miami, Washington, Chicago, Scottsdale (Arizona) and Los Angeles. The first properties are scheduled to open by 2010.

Loyalty programme With over 28 million members worldwide, the Marriott Rewards programme is the world's longest continuously running hotel rewards programme. Members of Marriott Rewards account for approximately

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51% of total room nights, and the programme is an effective way for Marriott to market leisure stays, new hotels and business and social events. Besides earning free nights and free flights, membership in Marriott Rewards offers priority check-in, room guarantees and a newsletter, including member-only special offers. Frequent travellers also enjoy elite benefits such as upgrades, special bonuses and gifts. According to research conducted in June 2007, the Marriott Rewards programme allows guests to enjoy the benefits 30% faster than other leading hotel loyalty programmes. Results were based on seven nights at Starwood, Hilton, InterContinental Hotels Group and Hyatt hotels of similar quality and points earned on dollars spent and assumed standard award offerings for base level members.

Limited Potential
The mature Western European market is expected to post the slowest regional growth in hotels over the forecast period, with a projected CAGR of only 1%. What growth there is, is expected to be driven by an increase in the number of short breaks spurred by the growth in low-cost airlines and a rising number of visitors from America and Asia. A weakening travel spending scenario in Europe is of concern to Marriott International. The weak summer revPars in 2008 confirm that not only leisure travellers are cutting back on spending, but also that corporate travel is also feeling the pressures of the economic slowdown and forced to reduce travel costs. After Western Europe, Australasia and North America are expected to develop at a CAGR of 4% over the 2007-2012 period. Such slow growth is set to derive from general economic and business conditions which adversely impact the income levels of potential travellers and a rising lack of confidence in strong markets like the US. This is likely to limit future operations, particularly given Marriott International's strong presence in North America.
Marriott International Inc: World Sector Sales Performance 2007

Table 1 US$ million

Market size Hotels

Source: Note:

Market % CAGR 2002-2007 8.3

Market % CAGR 2007-2012 4.7

% of company sales 100.0

Company share 2007 4.6

Global ranking 2007 1

392,199.9

Euromonitor International Percentage of company sales in each sector is calculated from rsp sales within this market in 2007. This figure may be slightly distorted by double-counting products which appear in more than one sector

Table 2 US$ million

Marriott International Inc: Hotels Regional Sales Performance 2007

Market size Western Europe Eastern Europe North America Latin America Asia-Pacific Australasia Middle East and Africa WORLD
Source: Note:

Market % CAGR 2002-2007 6.7 16.0 7.3 10.4 10.0 12.6 8.1 8.3

Market % CAGR 2007-2012 1.4 5.7 4.4 6.9 8.3 4.4 4.5 4.7

% of company sales 4.4 1.1 89.1 1.2 2.9 0.7 0.7 100.0

Company share 2007 0.6 1.3 15.1 0.6 0.6 3.6 0.5 4.6

Regional ranking 2007 10 2 1 6 7 8 9 1

121,778.7 14,683.3 106,016.5 36,968.7 86,578.0 3,303.8 22,870.9 392,199.9

Euromonitor International Percentage of company sales in each region is calculated from rsp sales within this market in 2007

COMPANY STRATEGY

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Strategic Objectives and Challenges

Marriott International relies on its scale and "Global Reach. Personal Service." strategy, gaining members through its loyalty programme and continuously expanding its hotel network. Marriott International is also focusing on more individuated properties, targeted at an emerging class of travellers who are seeking distinctive travelling experiences. The partnership with Nickelodeon to build upscale resorts featuring state-of-the-art spas, pools, water parks and live entertainement with Nick characters as well as the launch of "Edition" are great examples of this.

Lack of infrastructure and higher costs hinder international expansion Marriott International is expected to face many challenges when building abroad, which could limit expansion or force companies to partner with local companies. For example, corruption continues to hamper the business environment in Asia-Pacific, being widespread in many countries in the region including Indonesia, the Philippines, Vietnam and China. This imposes additional expense on businesses and raises the cost of doing business. Consumers are also affected by corruption since higher costs translate into higher prices. The lack of adequate infrastructure is another major obstacle to business and economic development in the Asia-Pacific region. Apart from markets such as Hong Kong, Singapore, Japan, Taiwan and South Korea, the rest face infrastructure problems. Growing urbanisation, increasing consumption and expanding economic activities have put strains on existing infrastructure in these countries. The rising cost of real estate in dynamic markets like China, Vietnam, India and Russia has made it harder to find good property for less expensive brands. In an attempt to overcome this, Marriott International must consider strategic partnerships with local real estate companies and/or even consider moving into second tier cities.

Ownership Events
Marriott International has continued to manage the hotels when Delek Real Estate, an Israeli property company, and its partners agreed to buy 47 Marriott operated hotels from Royal Bank of Scotland for around US$2.1 billion in 2007. In 2006, Marriott International sold its interest in the 50/50 joint venture with Whitbread Plc, which comprised 46 hotels consisting of more than 8,000 rooms, for US$164 million. The company continued to manage the hotels under the Marriott Hotels & Resorts and Renaissance Hotels & Resorts brands, and continued to do so when Whitbread sold the hotels to Royal Bank of Scotland later in the year for 951.4 million (US$1.7 billion).
Marriott International Inc: World Shares & Rankings in Travel & Tourism by Sector 20062007

Table 3

% retail value rsp Share 2006 Hotels

Source: Euromonitor International

Ranking 2006 1

Share 2007 4.6

Ranking 2007 1

Sector growth 2006/2007 4.9

Company growth 2006/2007 5.5

4.6

Table 4 % retail value rsp

Marriott International Inc: World & Regional Shares in Travel & Tourism by Sector 2007

WE Hotels 0.6 Af/ME

EE 1.3 WO

NA 15.1

LA 0.6

As 0.6

Au 3.6

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Hotels
Source: Note: Key:

0.5

4.6

Euromonitor International Signifies no presence or negligible share WE=Western Europe; EE=Eastern Europe; NA=North America; LA=Latin America; As=Asia-Pacific; Au=Australasia; Af/ME=Africa/The Middle East; WO=World

COMPANY STRUCTURE
Marriott International Inc
Based in the US, Marriott International is a global operator and franchiser of hotels and related facilities, with a network of over 3,000 travel accommodation outlets representing 19 brands in 67 countries and territories. Its operations are grouped into six business segments: North American Full-Service Lodging, North American Limited-Service Lodging, International Lodging, Luxury Lodging and Timeshare. As of December 2007, Marriott International's brand protfolio included 520 Marriott Hotels & Resorts, Marriott Conference Centers or JW Marriott Hotels & Resorts properties; 68 Ritz-Carlton hotels; 141 Renaissance hotels; 767 Courtyard hotels; 537 Fairfield Inn properties; 177 SpringHill Suites properties, 546 Residence Inn hotels; 141 TownPlace Suites properties; two Bulgari Hotel & Resorts properties, 61 timeshare properties; and 39 corporate housing and residential units. Marriott International earns base, incentive and franchise fees upon the terms of its management and franchise agreements. It also generates revenue through its timeshare operations by selling timeshare interval, fractional and whole ownership properties, operating resorts and financing customer purchases of timesharing intervals. In addition, the company earns revenues from the limited number of hotels it owns and leases, as well as generating revenues and tax credits from its synthetic fuel operations.
Marriott International Inc: Travel & Tourism Key Facts Marriott International Inc USA Travel Accommodation North America, Western Europe, Eastern Europe, Latin America, Asia-Pacific, Australasia, Middle East and Africa

Summary 1

Company name & status: Headquarters: Sector involvement (2007): Region involvement (2007):

Source:

Euromonitor International from company reports

Production and Distribution

The adoption of new technologies and the continued focus on global branding are creating a larger commitment to the internet, with Marriott International continuously enhancing its online presence to boost overall distribution. In 2008, Marriott International upgraded its Spanish language website by adding a new functionality which allows Spanish-speaking Marriott customers to compare hotel accommodation in their language. The new function allows customers to search for travel accommodation based on their preference of hotel category, or amenity.

BRAND ASSESSMENT
Brand Strategy
Marriott International aims to develop its brands through a focus on global presence and quality, the delivery of superior customer service with an emphasis on guest satisfaction, its Marriott Rewards loyalty programme, an information-rich and easy-to-use website, a multi-channel reservation system and the provision of a variety of amenities, including meeting and banquet facilities, fitness centres, spas, restaurants and high-speed and wireless internet access.

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Along with hotel owners and franchisees, the company continues to invest in its brands through new and renovated properties, and new room and public area designs, as well as enhanced amenities and technology offerings. In order to adapt its brands to the changing conditions of the modern hotels market, Marriott International 's marketing activity is looking to break through to customers through new media. It has developed special interactive websites that allow visitors to experience redesigned guest rooms and posts news and brand innovation on YouTube to reach a broader and younger customer base. Moreover, 2007 saw the company's CEO, JW Marriott, launch a blog covering topics including immigration reform and the reduction of global warming.

Marriott Hotels & Resorts

With 520 hotels worldwide, including around 380 in the US, Marriott Hotels & Resorts is the flagship brand of Marriott International Inc. In 2007, it held a global value share of almost 2%. The brand is targeted to what Marriot calls "Achievement Guests", people who are driven to perform whether it is for business or leisure purposes, offering medium- to high-price accommodation. Through 2007 and into 2008, Marriott International launched adverising campaigns for its Marriott brand. Focused on business travellers, the advertisements aimed at making a rational and emotional connection with guests. The advertisements addressed Marriott International's ability to adjust to distinct cultures while still providing a synchronised performance across its brands. Advertisements were featured at airports, targeted television stations such as CNN and select airlines. This full-service brand is currently transforming its public areas to encourage guests to work and socialise through the adoption of the latest design, technology, food and beverage offerings. According to company sources, the new public areas are more open and bright, offer a casual ambiance and a welcoming environment for guests. Marriott Hotels & Resorts brand is set to manage three hotels in Pune, India, which are scheduled to open over the next three years. The hotels, representing 833 new luxury, deluxe and upper-moderate quality guest rooms, underline the brand's key role in Marriott's expansion in major emerging markets. In 2008, the brand opened its 11th hotel in Beijing under a management agreement with Beijing Huhua Real Estate Development Co, Ltd. Also in China, the brand is expected to open an enormous, 968-room hotel as part of the Macao Studio City complex, which is taking shape with entertainment, retail, gaming and studios in Macao.

Courtyard
Courtyard is the second largest Marriott International brand in terms of value sales. With 767 properties, with 693 located in the US and 74 abroad, it is mainly targeted at businesses travellers and operates in the mid-scale, full-service segment. Most recently, however, industry experts believe the brand is maturing and finding it hard to lure customers back.This is explained by a fierce competitive environment, packed with exclusive offers and increasingly modern accommodation, particularly at a time when business travellers want to cut costs. After lauching renovated guest rooms with new bedding and pillows, high-speed internet access and ergonomic desks in the latter part of the review period, Courtyard enhanced the guest experience in its lobbies, looking to offer more technology, food options and social opportunities. Coutyard is rapidly developing outside the US, entering new markets such as the Czech Republic, El Salvador, Japan and Thailand. In Asia-Pacific, Marriott International added the Courtyard brand to its developing presence in Thailand and Hong Kong in 2008. The 318-room Courtyard by Marriott Hotel Bangkok was Marriott's ninth property in Thailand and fourth in Bangkok. The 245-room Courtyard by Marriott Hotel Hong Kong opened under a management agreement with Tsinlien Realty Ltd and was its fourth hotel in Hong Kong. This is a major move made by Marriott International to revitilise the Courtyard brand and benefit from the booming travel and tourism industry in the region. The brand is also expanding in Latin America to capitalise on the region's growing travel accommodation industry. In 2007, it opened the 133-room Courtyard by Marriott San Salvador Hotel in El Salvador. The hotel was the first Courtyard-branded hotel to open in El Salvador and the third to open in Central America,

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after the Courtyard by Marriott San Jose in Costa Rica and the Courtyard by Marriott Hotel Punta Pacifica in Panama.

Residence Inn
A pioneer in the so-called "extended stay" market, the Residence Inn by Marriott is targeted at business travellers seeking mid-priced, apartment-style accommodation for longer stays. Early in 2008, it had a total of 546 properties. Between 2007 and 2008, Marriott International launched a campaign featuring its Residence Inn brand. Through artistic talent (trapeze artists, fire-eaters, etc.), the advertisements represented the guest's ability to manage an extended stay through Residence Inn's amenities, all of which are suitable and specific to this audience. It also featured the brand's Innfusion dcor, featuring different zones in the room for extended stay travellers: sleeping, eating, working, relaxing. In 2008, Marriott International added the Residence Inn brand to its developing presence in the Caribbean. The 100-room Residence Inn by Marriott Port of Spain, Trinidad, set to be managed under an agreement reached with CAL Hospitality Investments Ltd, is expected to open in 2010.Hopefully, by then, the Caribbean travel and tourism industry will be fully recovered from the economic downturn and natural disasters that affected overall demand in 2007- 2008.

Renaissance Hotels & Resorts

The Renaissance Hotels & Resorts brand has 141 hotels in 28 countries, split roughly evenly between its North American and international networks. Additionally, UAL Corporation is investing in premium services to capitalise on higher profit margins and it is targeted mainly at business travellers, who search for unique mid-priced accommodation. Aside from offering features such as swimming pools, business library and centre, fitness centres, and conference and banquet facilities, Renaissance aims to differentiate itself from rivals through its boutique ambience, interior design and "street" restaurants. Moreover, the brand is looking to enrich its environment by forming partnerships with local artists and art institutions in order to provide a wide range of local, modern and classical art in its hotels. Its portfolio also includes the related Renaissance ClubSport brand, which is a lifestyle concept combining the boutique-style ambience of Renaissance Hotels & Resorts with upscale, full-service fitness clubs. The fitness club is complimentary for guests and offers memberships to local communities.

Ritz-carlton
The Ritz-Carlton is a luxury travel accommodation brand that offers exclusive service and amenities to its customers. Early in 2008, it had a total of 68 properties. Nevetheless, this figure is set to increase as Marriott International plans to double its Ritz-Carlton portfolio over the next eight years. In an attempt to capitalise on the ever-growing eco-tourism trend, Ritz-Carlton is making special efforts to include eco-tours in its offerings, including visits to farms and natural reserves. Between 2007 and 2008, Ritz-Carlton launched a marketing campaign along with American Express to reinforce its luxury brand positioning. The new campaign featured three sleek and provocative short films that showed Ritz-Carlton was at "the top of the game" in both service and luxury, and comprised an ambitious integrated media with online videos. Whether traditional Ritz-Carlton guests liked it is yet to be determined. Nevertheless, industry experts stated that the Ritz-Carlton promotional efforts were not strong enough, asking the question of whether a lot of people were exposed to the campaign and actually saw the films. In 2007, it accelerated its pipeline development strategy with hotel openings in Beijing, Dallas, Dublin, Vail, Moscow and Tokyo. Ritz-Carlton also saw some technological improvement with the addition of plasma TVs, wireless internet etc, as Marriott deepened its commitment to attracting Generation X families.

APPENDICES

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Financial Summary
Table 5 US$ million 2003 Net sales % growth net sales Operating profit % growth operating profit Net profit % growth net profit Operating margin (%) Net margin (%) Shareholders' equity Long-term debt Long-term debt/equity ratio (%) Earnings per share (US$) Number of employees Net sales per employee
Source: Note:

Marriott International Inc: Financial Summary 2003-2007

2004 10,099 12.0 477 26.5 596 18.7 4.7 18.7 4,081 836 1.31 133,000 0.08

2005 11,550 14.3 555 16.3 669 12.5 4.8 12.5 3,252 1,681 1.55 1.45 143,000 0.08

2006 12,160 5.3 1,011 82.2 608 -9.1 8.3 5.0 2,618 1,818 1.50 1.41 151,000 0.08

2007 696 14.4 1,429 2,790 1.75 300,000 -

9,014 7.1 377 17.4 502 81.2 4.2 81.2 3,838 1,391 128,000 0.07

Euromonitor International from company reports Year end December

Company Background
Summary 2 Year 2008 2008 Marriott International Inc: Historical Development Topic Loyalty Programme Hotel Development Description Marriott Rewards introduces no blackout dates. Marriott International set to introduce a luxury JW Marriott brand at Danang, Vietnam. Grand Residences by Marriott starts offering holiday home options in South Lake Tahoe, (California), Panama City Beach (Florida), Lihue (Kauai) and London. Marriott International announces plans to open hotels in Ecuador, Honduras, Peru, Suriname and Trinidad & Tobago by 2010. Marriott International announces plans to open three more Courtyard by Marriott hotels in France over the next three years. Marriott Rewards names Aeromexico as its new airline partner, which allows members to earn Aeromexico Club Premier miles when they stay at Marriott International hotels in 65 countries. Marriott International enhances the search capability of its Spanish Language website, www.latinoamerica.marriott.com,

2008

Vacation Ownership

2008

Hotel Development

2008

Hotel Development

2008

Loyalty Programme

2008

IT Development

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by adding a new functionality, which allows Spanish-speaking Marriott customers to compare hotel accommodations in their language. The new function allows customers to search for travel accommodations based on their preference of hotel category, or amenity. 2008 Loyalty Programme Marriott International relaunches its MegaBonus promotion in August, whereby members could earn up to 25,000 bonus points when using a Visa card to pay for travel accommodation. Marriott International set to open the seventh luxurious JW Marriott hotel in India by 2009. Marriott International announces plans to add 29 hotels to its Mexican portfolio in the next five years. Marriott International launches the Global Language Learning programme, with 30 new language offerings to employees. Marriott International announces plans to expand its China portfolio with 18 new hotels through 2012. Marriott Rewards starts offering members the possibility to redeem points for trips on 17 cruise lines. Marriott International is expected to manage nine new properties in the Kingdom of Saudi Arabia beginning in 2010. Marriott International announces plans to expand its portfolio in the Middle East from 26 to 65 hotels through 2011. Marriott International opens Courtyard by Marriott Hong Kong. Marriott International set to expand its presence in India with the addition of three new hotels in Kolkata, Chandigarh and Hyderabad by 2011. Marriott International announces plans to expand its presence in Norway and Sweden with the addition of six new hotels by 2010. Marriott International set to introduce family-friendly, budget savvy hotels at Phuket and Hua Hin. Marriott International set to introduce its deluxe Marriott brand in Thailand with a resort in Phuket.

2008

Hotel Development

2008

Hotel Development

2008

Other

2008

Hotel Development

2008

Loyalty Program

2008

Strategic Agreement

2008

Hotel Development

2008 2008

Hotel Development Hotel Development

2008

Hotel Development

2008

Hotel Development

2008

Hotel Development

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2007

Hotel Development

Marriott International announces plans to open 59 hotels in nine Asian markets, including multiple openings in China, India and Thailand, by the end of 2010. Courtyard, Residence Inn, Fairfield Inn, TownePlace Suites and SpringHill Suites brands eliminate Wi-Fi charges for guests in lobbies and other public areas in order to target on-the-go customers and boost efforts to develop multifunctional public interiors. Marriott International's extendedstay Residence Inn brand launches a distinctive new advertising campaign to showcase its new Innfusion dcor. Marriott International announces it is to withdraw its common stock from listing on the Pacific Exchange, Inc., now known as NYSE Arca, Inc., and the Philadelphia Stock Exchange, Inc. Marriott sells four hotels totalling 109 rooms in continental Europe to the Whitehall Street Global Real Estate Limited Partnership. In addition, the Whitehall company agrees to purchase the 150-room Courtyard by Marriott Colombes (France) under construction. Marriott International announces the sale of its interest in the 50/50 joint venture with Whitbread, which has 46 hotels consisting of more than 8,000 rooms. The Royal Bank of Scotland acquires the joint venture in a transaction with a joint venture enterprise. Sale of a portfolio of land underlying 75 Courtyard by Marriott hotels for US$246 million in cash to CBM Land Joint Venture limited partnership. Ramada International opens 200th hotel in Amsterdam. Sells Ramada International brand to Cendant. Marriott Rewards welcomes its 20,000,000th member. Completes sale of Senior Living Service Communities and Marriott Distribution Services. Courtyard opens 500th hotel in Minneapolis, USA. SpringHill Suites opens 100th hotel in Texas, USA.

2007

Other

2007

Advertising

2006

Listings

2006

Hotel Divestment

2006

Hotel Divestment

2005

Hotel Divestments

2004 2004 2004 2003

Hotel Development Brand Divestment Loyalty Programme Business Divestment

2003 2003

Hotel Development Hotel Development

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2002 2002

Hotel Development Business Divestment

2,500th hotel opens. Announces sale/spin-off of its Senior Living Services Communities and Marriott Distribution Services. Opens 500th extended-stay hotel, representing a total of 400 Residence Inns and 100 TownePlace Suites. Launches Marriott Grand Residence Club. Fairfield Inn opens 500th hotel in Rogers, Arkansas, USA. 2,000th Marriott property opens. Forms joint venture with Hyatt and Club Corporation to create the largest and most comprehensive electronic procurement network. Marriott International acquires ExecuStay corporate housing company, which subsequently acquires Executive Living Inc of Ohio, USA. Marriott Vacation Club International launches moderately priced resorts Horizons by Marriott Vacation Club and luxury resorts The Ritz-Carlton Club. 1,500th hotel opens. Sodexho Alliance acquires Marriott International's foodservice and facilities-management businesses. Launches SpringHill Suites brand. Acquires the Renaissance Hotel Group and introduces TownePlace Suites, Fairfield Suites and Marriott Executive Residences brands. Marriott acquires Ritz-Carlton Hotel Company, LLC. Company splits into Marriott International and Host Marriott Corporation. Pathways to Independence, Marriott's Welfare to Work programme, established. 500th hotel opens in Warsaw, Poland. Marriott Foundation for People with Disabilities established. Acquires Residence Inn Company and enters low-mid-price lodging with Fairfield Inn. Opens Marriott Distribution Center in Savage, Maryland, USA.

2002

Hotel Development

2002 2002 2000 2000

Hotel Development Hotel Development Hotel Development Joint venture

1999

Strategic Acquisition

1999

Hotel Development

1998 1998

Hotel Development Other

1998 1997

Hotel Development Strategic Acquisition

1995 1993

Strategic Acquisition Other

1990

Other

1989 1989 1987

Hotel Development Other Strategic Acquisition

1985

Other

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1984 1983 1982 1982 1981 1979 1976

New Product Development Hotel Development Strategic Acquisition Strategic Acquisition Hotel Development New Headquarters Theme Parks Established

Enters holiday timeshare and senior-living accommodation sales. First Courtyard hotel opens. Acquires Host International Inc. Acquires Gino's, which it converts to Roy Rogers. Opens 100th hotel in Hawaii. Builds new corporate headquarters in Bethesda, Maryland. Opens two Great America theme parks in Santa Clara, California, and Gurnee, Illinois, USA. Opens first European hotel in Amsterdam, Netherlands. Company obtains first hotel management contracts. Marriott's first international hotel opens in Acapulco, Mexico. Corporate name changed from Hot Shoppes Inc to Marriott Corporation. Marriott opens Fairfield Farm Kitchens, a food production and purchasing facility in Beaver Heights, Maryland, USA. Acquires Camelback Inn, its first resort property. Buys Bob's Big Boy Restaurants. Marriott Foundation established. Marriott opens first hotel, 365-room Twin Bridges Motor Hotel in Arlington, Virginia. Marriott Food Service gains first institutional and school feeding contracts at Children's Hospital and American University. Marriott stock becomes public and sells out in two hours. Hot Shoppes opens first cafeteria and gains government foodservice contract. In-Flite gains first airport terminal foodservice contract at Miami International Airport. Marriott gains foodservice management contract with US Treasury. Hot Shoppes opens In-Flite Catering division to offer airline foodservice to Capital, Eastern and American Airlines. Hot Shoppes expands to Baltimore, USA.

1975 1973 1969 1967

Hotel Development Hotel Development Hotel Development Corporate Name Change

1967

Company Expansion

1967 1967 1965 1957

Other Strategic Acquisition Marriott Foundation First Hotel Established

1955

Other

1953 1945

Other Food Service Contract

1945

Other

1939

Other

1937

Catering Services

1934

Other

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1929

Other

Hot Shoppes Inc officially incorporated and introduces curb service. J Willard Marriott and his wife Alice open a root beer and hot Mexican food stand The Hot Shoppe in Washington, USA.

1927

Foundation

Source:

Euromonitor International

Summary 3 Company

Marriott International Inc: Subsidiaries 2007 Country Singapore USA

Ritz-Carlton Hotel Co LLC, The Marriott Vacation Club International

Source: Euromonitor International

Summary 4 Brand Name Courtyard Fairfield Inn Marriott Renaissance Residence Inn Ritz-Carlton SpringHill Suites
Source:

Marriott International Inc: Travel & Tourism Brands 2007 Sector and subsector(s) Travel accommodation (Hotels) Travel accommodation (Hotels) Travel accommodation (Hotels) Travel accommodation (Hotels) Travel accommodation (Hotels) Travel accommodation (Hotels) Travel accommodation (Hotels)
Euromonitor International

Summary 5 Location North America Western Europe Asia-Pacific Latin America

Source:

Marriott International Inc: Company Locations Country USA France, Germany, UK China, Japan, South Korea Argentina, Brazil, Chile, Venezuela, Peru Activity Travel Accommodation Travel Accommodation Travel Accommodation Travel Accommodation

Euromonitor International

Summary 6 Name

Marriott International Inc: Websites Country USA USA USA USA France China Website address ExperienceMarriott.com marriott.com www.joyweddingsbymarriott.com www.execustay.com marriott.fr marriott.com.cn

Interactive website Main corporate website Joy-Your Dream Wedding Marriott ExecuStay Marriott International Marriott International

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Marriott International Marriott International Marriott International Marriott International Marriott International Marriott International Marriott International Marriott International Marriott International Marriott International Marriott International Marriott International Marriott Vacation Club The Ritz-Carlton The Ritz-Carlton Club
Source: Euromonitor International

Japan South Korea Germany United Kingdom Argentina Brazil Chile Costa Rica Dominican Republic Mexico Peru Venezuela USA USA USA

marriott.co.jp marriott.co.kr marriott.de marriott.co.uk marriott.com.ar marriott.com.br marriott.cl marriott.co.cr marriott.com.do marriott.com.mx marriott.com.pe marriott.co.ve www.vacationclub.com www.ritzcarlton.com www.ritzcarltonclub.com

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