A GLOBAL

ORGANISATION
An analysis of Marriott International
 MARRIOTT INTERNATIONAL

 A worldwide operator and franchisor of a broad

portfolio of hotels and related lodging facilities.

 Its world-renown "Spirit to Serve" company

culture, employee-centred practices and customer
focus have led the company to greater heights.
 The Marriott Timeline
 1957:  Marriott opens its 1st hotel, the 365-room
Twin Bridges Motor Hotel in Arlington, Virginia.
 1965:  Marriott Foundation established.
 1969:  Marriott's 1st international hotel opens in
Acapulco, Mexico.
 1975:  Marriott opens its 1st European hotel in
Amsterdam, Holland
 1977:  The company celebrates its 50th
anniversary; sales top $1 billion
 The Marriott Timeline
 1981:  100th hotel opens in Hawaii.
 2000:  The 2,000th Marriott property opens in
Tampa, Florida.
 2002: Marriott celebrates its 75th anniversary, with
annual sales of $20 bil
 2005: Marriott announces the sale of Ramada
International hotels
 2007: The 80th anniversary of the founding and the
50th anniversary of entry into the hotel business.
Brands and Service Offering
Full Service Limited service Luxury
Revenue Analysis by Brands

Brands Revpar No of rooms Revenue Percentage

  $ US International $ %

Full service Lodging

segment        

Marriott hotels & resorts

& JW Marriott 109.48 126398 42138 18451321.28 37.50
Renaissance Hotels 109.75 27151 21783 5370506.5 10.91

Limited service Lodging

segment          
Courtyard 84.57 99606 11174 9368664.6 19.04
Residence Inn 92.35 65341 75 6041167.6 12.28
58.01 47671 206 2777344.77 5.64
suits 60.35 14122 0 852262.7 1.73
Springhill suits 73.16 20569 0 1504828.04 3.06

Luxury Lodging segment          

Ritz 223.88 11627 9978 4836927.4 9.83
        49203022.89 100

(Adapted from Marriott’s annual report 2006/07)

 Globalisation & global economy
 What is globalisation
Globalisation - the increasing economic integration of
the world (source: Guardian)

Costs Benefits
•Environmental costs •Lower price for consumers
•Less culture diversity •Great choice of goods
•Bigger export markets for domestic
manufacturers
•Economies of scale through being able to
specialise in certain goods
•Greater competition
Globalisation & global economy

Global trade
 Ratio Analysis - Profitability
Firm Marriott Accor
2008 2007 % 2006 % 2007 2006 %
change change change
08-07 07-06 07-06
ROCE 5.68% 11.40% -50.18 10.02% 13.77 17% 8.8% 95.2
Asset
turnover $2.02 $2.14 -5.61 $1.98 8.08 €1.53 €1.25 22.0
Net profit
margin 2.81% 5.36% -47.57 5.07% 5.72 11.2% 7.0% 60.0

Net profit margin Asset turnover

Significant fall in 2008
$292mil increase in expenses
plus $111mil decrease in
revenues  Fall in profit
ROCE
Small changes (<10%) Decrease for the same
Above benchmark
reason as Net profit
Effective use of capital margin
Capital employed goes up
by $304mil

Comparison with Accor:

Lower ROCE and net profit margin ratios  Marriott is less profitable
Higher asset turnover ratio  Marriot is more efficient in using its capital
Consolidated Income Statements – Financial report 2008
 Ratio Analysis - Liquidity
Firm Marriott Accor
2008 2007 % 2006 % 2007 2006 %
change change change
08-07 07-06 07-06

Current ratio 1.33 1.24 7.26 1.32 -6.06 0.7 1 -5.7

No significant change during the three years analysed

Higher than benchmark (1:1)
Marriott has better management of liquidity than Accor
Acid-test ratio: Should be the same
Ratio Analysis - Finance
Firm Marriott Accor
2008 2007 % 2006 % 2007 2006 %
change change change
08-07 07-06 07-06

Gearing 51.60% 50.73% 1.71 37.29% 36.04 71.4% 70.7 % 1.4%

Interest cover 5.26 7.18 -26.74 6.74 6.53 10.55 8.45 24.9%

Gearing ratio: Interest cover:

 Always less than 100% Decrease by 26.74% between 07 and
 Increase by 36.04% from 06 to 07 08 due to fall in profit
 No significant change between 07 and Negative signal but still Good
08 (Benchmark is 2:1, according to ANZ)
 Lower gearing than Accor Accor has better ability to pay interest
Extracted from consolidated Balance sheet – Financial report 2007
Consolidated Income Statements – Financial report 2008
Share Analysis
Marriott’s EPS from Dec 2003 to Dec 2010

EPS for Accor better than Marriot throughout the analysis except for the year 2005.
This can be predicted as overall Accor performs much better in terms of profitability.
 Comparison of Marriot with Benchmark indices

• Marriot follows the trend of the general market prices as the benchmark (S & P
500) index tumbles down.
• The comparison between Marriot and the travel and leisure index is very similar
as both of them have lost 60 – 70 % of their value during the same time frame.
Marriot and Accor share comparison

The effect of the decline in global share markets reflects on both the
companies compared but Accor performs a bit better then Marriot.
Advice on Dealing with Marriot shares

 A Good buy for long term investors. as it is a

strong company with a strong footing Reuters
(2009).
 long term investors to buy shares at the current
levels.
 Short term Investors are advised not to Buy right
now.
 Accor will be a better buy due to its better it
performance in the financially as compared to
Marriot
Summary
 Revenue
 2008 Compared to 2007
 Revenue decreased by $111m (1percent) to
$12,879 m from $ 12,990
 Accor to €7739m from € 8121m (4.7 percent)
 2007 Compared to 2006
 Revenue increased by $995 m (8 percent) to
$12,990 m from $ 11,995 m
 Accor to €8121m from €7607 (6.75 percent)
Summary
 Development of New properties
 2008 Compare to 2007
Full service 36, Limited service Luxury 4
168
11230 Rooms 19747 Rooms 1195 Rooms

 2007 Compare to 2006

Full service 44, Limited service Luxury 11
156
11230 Rooms 17517 Rooms 2529 Rooms
Summary
 Average daily rate fell 4% to $101.96.

 Revenue per available room down to $49.22, a 16.4%

drop from last January.

 revpar declines were driven by a sharp decrease in

occupancy. (source: Friedman Billings Ramsey
analyst Co. 2009)
Summary
Currently US
hotel
occupancy rate
is 58.5%

Marriott
occupancy for
2008 70.4%

Decreased by
-0.9% in US