Analysis of Financial Performance Between Hilton and Marriott Hotels

This report undertakes a comprehensive financial analysis comparing the performance of Hilton Hotel and Marriott International. The study begins with an acknowledgement and a summary of the financial analysis, highlighting the importance of continuous financial assessment for sustained market growth. The report delves into the competitive landscape of the hotel industry, particularly focusing on Hilton and Marriott, which are global brands with significant presence. It examines the impact of the global liquidity and housing crisis on the sector and addresses the strategies employed by Marriott, including expansion plans and cost reduction measures. The report includes an analysis of the financial statements of both companies from 2017-2019, including income statements, balance sheets, and cash flow statements. The methodology includes a 5 Forces analysis to assess the competitive environment and a value chain analysis of Hilton's primary activities. The literature review covers key accounting principles and concepts like the business entity concept and going concern concept. The report evaluates the business models of both hotels and critically assesses their financial performance, including their current ratios and liabilities. The objective is to analyze the competitive environment, primary activities, business models, and financial performance of Hilton and Marriott from 2017 to 2019.

Accounting & Finance

Acknowledgement
I would like to express my special thanks of gratitude to my teacher “ “for their able
guidance and support in completing my Dissertation.
I would also like to extend my gratitude to the Dean Ma’am/Sir “ ” for providing me with all
the facility that was required.
DATE:

SUMMARY
Financial analysis includes utilising financial data in order to assess the performance of
organisation as well as make recommendations regarding the way it can enhance going forward.
Analysing financial position and performance of company on continuous basis is very necessary
today in order to grow and sustain in market for long term. Hilton Hotel is one of the leading full
service hotel and resort and is a global brand which around 584 hotel and resort properties in 94
Nations and territories across six continents. On the other hand, Marriott International, Inc. is a
pioneer in the global real estate industry. With over 3,000 properties in 68 countries and
countless performance donations, they are renowned and renowned as a brand. The global
liquidity and housing crisis has hit the pub and housing sector hard due to the sharp decline in
business and leisure travel. Despite the volatile decline in productivity over consecutive years,
Marriott plans to launch two new brands in 2010, a dual presence in Europe by 2015, and be able
to generate incremental revenues while reducing building-level costs. The attached report
addresses these critical trends. It also deals with the openings that Marriott and Hilton needs to
make extra profits based on their characteristics by expanding their expansion plans in the mid-
range pub share to take advantage of the busiest development speed and using minimal effort,
high improvements to enable stay rates deteriorate and make a constant assessment of economic
conditions as the world gradually emerges from this financial recession. The findings show that
Hotel has maintained its financial position, but it still requires to work on its current ration; as
liabilities are more compared to current assets.

Contents
Acknowledgement...........................................................................................................................2
SUMMARY.....................................................................................................................................3
Contents...........................................................................................................................................4
Title: “To analyse financial position and performance between Hilton Hotel and Marriot Hotel”.6
Chapter 1: INTRODUCTION..........................................................................................................6
1.1 Research Objective...........................................................................................................7
CHAPTER 2 - LITERATURE REVIEW........................................................................................8
Porter’sFive Forces............................................................................................................11
Competition in the Industry..............................................................................................11
Potential of New Entrants Into an Industry.....................................................................11
Power of Suppliers..............................................................................................................12
Power of Customers...........................................................................................................12
Threat of Substitutes..........................................................................................................12
Value Chain Analysis of primary activities of Hilton Hotel...........................................13
To evaluate the business model of Marriott and Hilton hotel........................................15
CHAPTER 3 - Research Methodology..........................................................................................16
CHAPTER 4 - Analysis................................................................................................................19
Financial performance of Hilton & Marriott 2017 -2019...............................................21
REFERENCES..............................................................................................................................24
APPENDIX....................................................................................................................................26
Hilton Worldwide Holdings Financial Statements 2017 – 2019..........................................26

HILTON WORLDWIDE HOLDINGS INC. CONSOLIDATED STATEMENTS OF
OPERATIONS.....................................................................................................................27
Income Statement of Marriot International, 2017 – 2019....................................................28
MARRIOTT INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF INCOME
Fiscal Years 2019, 2018, and 2017......................................................................................28

Title: “To analyse financial position and performance between Hilton Hotel
and Marriot Hotel”
Chapter 1: INTRODUCTION
Accounting is defined as the method of reporting of financial transactions relating to a company
The mainly includes the review, examination and disclosure to managers, authorities and
taxation entities about company transactions. The reporting financial reports are a succinct
description of the accounting activities, which indicates the expenses, financial status and
working capital of a business. Finance is a word for matters involving money and wealth
management, development and research (Cockcroft, 2018). It may be categorized loosely into
three categories: public affairs, industrial and personal finance. Public financing covers revenue
schemes, government spending, budgeting practices, strategy and tools for stability, debt
problems, among other financial considerations. Corporate financing includes the administration
of a company's properties, obligations, sales and debts. Personal finance describes all adult or
family financial choices and practices involving budgeting, taxes, mortgage plans, investments
and pension preparation.
The main rationale regarding writing this research to better understand the importance of
finance and accounting for large company like “Hilton and Marriot”. This is because proper
accounting helps to record each and every business transaction within accurate books and
financial statement which further support to make best decision for growth and expansion of
business operation. Accounting plays a critical role in operating a company as it lets you monitor

profits and spending, maintain regulatory enforcement, as well as provide creditors, managers,
and government with detailed financial details that can be used when making an investment
decision (Smith, 2018). Hilton and Marriot financial statements represent results of activities and
also the financial status. That is to say, they help user to understand financially what's going on
with the respective company.
About Hilton and Marriot
Hilton Worldwide Holdings Inc. is a US-based massive company which operates and performs a
large range of hotels & restaurants, previously called Hilton Hotels Corporation. The business is
now headed by Christopher, J. Nassetta, and was established by Conrad Hilton in May 1919.It
has 18 labels in different business units, namely Conrad Hotels & Resorts, Hilton Canopy. The
spin-offs for Park resorts and hotels including Hilton Grand Holidays were concluded in January
2017 (Crookes, 2018). As early as 2018 the firm became a completely autonomous, publicly-
traded corporation (as in the pre-buy-out day, much as in the exact days) following the sale of the
black rock as well as the HNA group. In 2019, nearly 97 % of Hilton-based branded bedrooms
were operated by individual firms or operators. While owning Hilton in 2007–13, the Blackstone
Group pursued the strategy of increasing the availability of Hilton primarily by way of
franchising agreements, even when Hilton was actually operating relatively few new houses.
About Marriott:
Marriott International is an American company that runs and handles a strong inventory of hotel
industry and connected accommodation services. Marriott International, Inc. It was developed by
J. The business is now headed by Willard Marriott, its parent, Bill Marriott, CEO, and Arne

Sorenson, Chairman and chief executive officer. The world's biggest hotel chain is Marriott
International. Marriott International was founded in 1993 when the Marriott Group, Marriott and
Host Marriott Company, was split into two entities. In 1995, Marriott became the world's largest
hotel business to give guests the possibility of booking online through MARSHA (Marriott's
automated pricing structure for hotel accommodations) introduction of the product (Carnegie,
2019).
1.1 Research Objective
1. Analyse the competitive environment by undertaking a 5 Forces analysis of Hilton.
2. Analyse the primary activities of Hilton’s Value Chain.
3. Assess Hilton hotels Business model to see if it is fit for purpose.
4. Critically evaluate the financial performance of Hilton & Marriott 2017 -2019.

CHAPTER 2 - LITERATURE REVIEW
According to Accountants all around the world will rely on some fundamental criteria on
which accounting philosophy and practice is centered becoming together including accounting
standards and values. They are known as a wide collection of standards that are intended to
include simple framing functions for financial reports. The value of these ideas and values
consists in the fact that they will be relevant to the whole Financial accounting cycle because
they influence explicitly the manner the financial results are structured (Ng, 2018). Some of the
main concepts are discussed underneath which is implemented by company in their day to day
functioning:
Business Entity Concept: Under this principle, the company is considered to be independent
and entirely different from its owners (including staff, officials, shareholders and those affiliated
with it). According to this principle, it was proposed that corporate relations would not be
combined with the personal activities of individuals or other related staff members. As such, this
definition helps provide an accurate impression of a commercial entity's financial conditions.
The management was provided by the shareholders and borrowers with the requisite funds.
Management’s role was to appropriately utilize both money and financial statements intended to
decide whether the management conducted this management feature more efficiently. Through
this stewardship role the root of this term can be identified (Stewart, 2018).
Going Concern Concept: That definition means that the company entity requires a continuation
or even the existence of respective company will be maintained or expanded forever, that is, the
usual corporate cycle is to maintain the corporation and not to break or liquidate. In other terms,

an organization is used as a tool available added benefit to the goods or facilities used. The
business' performance or loss is calculated by the discrepancy among its production profit (sale /
services) and its operating cost (Gulin, 2019).
As per the viewpoint of Ball, Li and Shivakumar, (2015), Accounting principles include
all facets of the accounting of a company, including properties, liabilities, profits, expenditure
and representation among shareholders. Including income identification, inventory definition,
depreciation permissible methodologies, what is depreciated, lease designations and unpaid stock
estimation, the accounting principle is broad. Accounting requirements for integrity in
government are expected by the body, with the goal of guarantees that institutions are relying
mostly on the central focus of accountability in determining whether to send outsiders
information. This method of public disclosure is especially essential for public bodies, such as
government and private entities. The laws and regulations and requirements that comprise
commonly agreed financial reporting are selected in the context of the company.
According to Robinson, (2020), Policy regulators set out accounting requirements that
must be followed by all businesses. This is also good for the owner or company owner and also
for consumers or partners, as it guards against theft in businesses. It also helps promote openness
across company transactions which will ultimately contribute to improved sector performance.
Accounting guidelines provided by the FASB and the IASB would help protect a corporation or
business costs related to judicial action instituted against Hilton and Marriot as per the law.
Though there are numerous proposals to address the problem, financial statements disclose
issues across regional boundaries that company managers will not neglect the weaknesses like

reciprocity and restitution. Universal accountings principles are used to minimize variability in
accounting, but the substantive gaps are while monitoring companies and public statements.
To a degree, it will be simpler to implement accounting principles comparison of annual
reporting by various firms in the specific areas as well as different businesses of the same Place.
Nonetheless, variations in this region should be noted institutions, customs and legal structures
are developed from one country to other discrepancies of accounting practices in different
regions. IASB provides an overview of the possible consequences of the upcoming IFRS or big
change. The study should also aim to determine the potential impact of the new IFRS on: The
financial results of those submitting IFRSs, the probable enforcement costs for standard setters,
the costs of research for consumers (such as the costs of collecting data, determining whether the
data have been evaluated and modifying data as part).
The primary aim of financial management is to properly manage the annual accounts of
an entity, popularly known as financial documents, over a particular time. The three major
accounting statements are the revenue statement, the balance sheet and the cash flow analysis.
The annual records of the company have many functions beneficial for internal and external
interested stakeholders. They provide the owners and loan borrowers with valuable details,
which will help to increase investor value. The annual statements are used by executives
primarily to monitor both the company's existing affairs and its potential plans.
As per the perspective of Macve, (2015), the purpose of financial reporting has different
advantage for different related parties to the company such as:
● Managers need Financial Statements to handle the businesses' finances by an evaluation
of their financial success and status and significant decisions.

● Shareholders utilize audited financials to evaluate their investment risk / return in the
business, as well as to make judgments on profit will increase on their review.
● Forward-looking creditors use financial results to determine the feasibility of investing
within company. Future dividends dependent on earnings disclosure in the earnings statement
may be expected by creditors. In fact, from the annual report the costs involved with the
transaction will be measured. For e.g., higher risk can be seen in decreasing earnings.
● Consequently, annual statements establish a framework for future investor's investment
choices.
● Bank organizations (e.g. banks) should use Financial Reports of Hilton and Marriot to
determine if a company will obtain a loan or credit. Credit firms assess a firm's financial stability
and decide the risk of a debt obligation. An appropriate fund position and liquidity will
accompany any choice to loan.
● Providers use financial records to measure a company's credit worthiness and to decide
how to offer trust for products. Suppliers will realize if they are going to be reimbursed. Credit
limits are determined on the basis of the key financial appraisal of consumers.
In order to guarantee the consistent delivery of future products, consumers start utilizing
Financial Statements. It is highly relevant when a company depends on a professional product
manufacturer (About Hilton Hotel CRM. 2020).
Porter’sFive Forces
Porter's five-force model gives the strength to 5 distinct market competitions which decide long-
term competitiveness and competitiveness whenever taken together. Porter’s design had a larger