Strategic Management

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Strategic Analysis of Marriott International, Inc. Lauren Renner April 28, 2010 MGMT 458-002H Honors Capstone

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Corporate Headquarters 10400 Fernwood Rd. Bethesda, MD 20817 www.marriott.com

Executive Summary Marriott International, Inc. is a leader in the global lodging industry. With more than 3,000 properties in 68 countries and countless achievement awards, they are not only a wellknown but also a well-liked brand. The global financial crisis hit the hotel and lodging industry hard because of a sharp drop in business and leisure travel. Regardless of the steep drop in profitability over recent years, Marriott has plans to launch two new brands in 2010, double presence in Europe by 2015, and focus on driving incremental revenue by cutting costs at the property level. The following document discusses these strategic moves. It also addresses opportunities Marriott has to further capitalize on their strengths by extending their expansion plans into the mid-level hotel segment to take advantage of the industry’s fastest growing population and by utilizing low-cost, high-impact promotions to allow room rates to remain competitive and continuously evaluate market conditions as the world gradually climbs from this economic downturn.

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Company Overview Marriott International, Inc. (NYSE: MAR) is a global hotel chain dedicated to operating and franchising hotels and other lodging facilities. The Marriott family’s first endeavor was a small root beer stand on the streets of Washington, DC in 1927. Marriott’s first hotel was the Key Bridge Marriott close to the DC area which is constantly out of date due to its high demand for occupancy because of its still enviable location. From there Marriott has grown to become the leading hotelier that we know today. On October 8,, 1993, Marriott International was established as a spinoff of the Host Marriott Corporation and took over the role of managing and franchising hotels.1 The headquarters, still in close proximity to the original site in Bethesda, MD, now oversees 16 brands worldwide. (See Appendix I)2 The Marriott Brands The flagship Marriott brand is their Marriott full-service hotels and resorts. There are over 500 locations worldwide and they pride themselves on their Marriott name and quality. The majority of their market share is still in the United States. Marriott has a number of brands that strive to capture the luxury segment of the market. The J.W. Marriott brand operates 37 properties that strive to compete with others in the high-end segment. In 1997 Marriott acquired the Renaissance hotel brand which serves a similar audience. Similarly, Marriott has recently acquired the Ritz-Carlton hotel brand and the Ritz-Carlton

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Marriott International, Inc. (2010). Web. Retrieved March 2010 from http://investor.shareholder.com/MAR/faq.cfm Marriott International, Inc. (2010). 2009 Annual report. Retrieved from http://files.shareholder.com/downloads/MAR/875071027x0x350959/EB876B01-E737-4BBC-9E251A91F4163D99/Final_FY_2009_Form_10-K.pdf

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Destination Club. The company has also announced, in 2009, the introduction of two new luxury brands known as Autograph and Edition which have been designed to capture the luxury segment of the population that are looking for more of a boutique hotel experience, something Marriott has previously not been able to offer. In addition, Marriott operates a number of brands that reach out to the mid-level leisure and business travelers. These include the most popular and widespread Courtyard brand that has over 800 locations. They also feature the Fairfield Inn, Springhill Suites and the Residence Inn, which is specifically designed to have less expensive rates for longer stays. The mid-level brands all highlight amenities such as internet access and complimentary breakfast in the morning that mid-level travelers typically appreciate. Marriott’s TownPlace Suites can also be considered mid-level but is...
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