Marriot 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 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 mid-scale 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.

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3 years ago