Marriott International: Financial Report and Performance Evaluation

This report provides a detailed overview of Marriott International's business, focusing on its financial performance, business strategies, and market position. The report begins with an introduction outlining the importance of presenting organizational values to business partners and the purpose of preparing an approval document for Marriott International's owner. It then provides a company profile, detailing Marriott's history, business segments, and competitors. The report assesses Marriott's competency level, highlighting its focus on long-term goals, customer service, and strategic responses to economic challenges. It also examines the historical performance, including the acquisition of Starwood and its impact on room numbers and revenue. The report concludes by summarizing the financial performance and brand value of Marriott International, comparing it to competitors. Appendices include data on management experience, corporate operating strategy, current financial performance, and brand value, supported by financial data from 2016. The report also includes a list of properties managed by Marriott International and their financial results. Overall, the report provides a comprehensive analysis of Marriott International's operations and financial standing.

Running head: MARRIOTT INTERNATIONAL
Writing up a Proposal to the Business Owner
[Marriott International]
Name of the student:
Name of the university:
Author note:

1MARRIOTT INTERNATIONAL
Table of Contents
Introduction:....................................................................................................................................2
Company profile:.............................................................................................................................2
Competency level:...........................................................................................................................2
Historical performance:...................................................................................................................3
Conclusion:......................................................................................................................................3
References:......................................................................................................................................5
Appendices:.....................................................................................................................................7
1) Management experience (Turnover):......................................................................................7
2) Corporate operating strategy Projected factors:......................................................................7
-Proposed management contract provisions and conditions....................................................7
-Current financial performance................................................................................................7
-Brand value.............................................................................................................................9
-Provide a list of properties managed by Marriott International and include financial results
achieved at similar properties under management.................................................................10

2MARRIOTT INTERNATIONAL
Introduction:
Presenting the organizational values to the business partners is very necessary to keep
their trust with the company. Such presentation needs to be very good and informative as well. In
this regard, it is important that the senior executive must have the presentation approval signed
and verified by the company's owner as this will ensure a maximum input of the organizational
values. The main purpose of this assignment is to prepare one of the kinds of an approval and get
that signed by the owner of the Marriott International hotel. The approval will include all the
necessary elements that are covered in the report body.
Company profile:
Marriott International was found in the year 1997 as a lodging company. Since then, it
minted huge success and as of the December 2016, it has franchised or licensed 6,080 properties
across the world (Editorial, 2018). The number of rooms is 1, 190, and 604 (Editorial, 2018). The
company operates mainly in three business segments like International, North American Full-
Service and North American Limited-Service (Editorial, 2018). They offer service in three
quality formats like Select, Luxury, and Premium (Editorial, 2018). Its competitors are
Intercontinental Hotels Group, Choice, Carlson, Accor, La Quinta, Best Western and Hilton
(Editorial, 2018).
Competency level:
The competency level at the Marriott International has been maintained by focusing on
long-term goals. They have been successful through an effective use of the business model that
gives utmost value to customer service (Al-Zoubi & Alomari, 2017). Nevertheless, the company
could have escaped from the effect of the global recession by focusing much on the marketing

3MARRIOTT INTERNATIONAL
activities and the customer service. The recession was also responded with a strategic approach
that had resulted in cutting the total costs. Moreover, the move had ensured a stable cash flow
even during the global recession (Al-Zoubi & Alomari, 2017). The competency was also
maintained with an extensive focus on nurturing the employee and the associated groups. Unlike
many hotel companies, Marriott has used technology to a good cause to retain its
competitiveness (Al-Zoubi & Alomari, 2017).
Historical performance:
There have been several moments when the Marriott International hotel has achieved the
historical feats. One of the historical feats was achieved in the year 2016 when the company has
successfully increased its room numbers. The company had opened up a record 55,000 rooms in
the same year (Marriott News Center, 2018). The figure excludes a mammoth total of 381,000
rooms that the company was able to open up after it had acquired the Starwood (Marriott News
Center, 2018). The combined company had agreed on signing a deal that included 880 new
hotels (Marriott News Center, 2018). The company is well positioned to capitalize on the success
that it had attained in the year 2016. The company will be able to earn much more success in
long-term. Moreover, the company has been absolutely good for the development partners as
they have been able to get the expected returns on investment (Marriott News Center, 2018).
Conclusion:
To conclude, an effective and a progressive financial performance has indeed become a
much necessary thing in the hospitality industry. The fact has also been observed through this
assignment as Marriott International is doing very hard to get to the top position, which is
currently being dominated by the Hilton International. The acquisition of Starwood Hotels &

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Resorts has so far produced good results by supporting a growth in the net revenues. However,
the revenue is still quite lesser than the net revenues of Hilton International. The revenue is
indeed expected to go up and affect the position of Hilton by helping Marriott International get to
the top position.

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References:
Al-Zoubi, A. F., & Alomari, M. (2017). The Role of Internal Customer in Improving the Quality
of Hotel Services in Jordan: A Case Study of the Marriott International Hotel in
Amman. International Journal of Marketing Studies, 9(6), 87-92.
bighospitality.co.uk. (2018). bighospitality.co.uk. Retrieved 25 January 2018, from
https://www.bighospitality.co.uk/Article/2016/04/28/Hilton-named-world-s-most-
valuable-hotel-brand
Editorial, R. (2018). Company Profile for ${Instrument_CompanyName}. IN. Retrieved 25
January 2018, from https://in.reuters.com/finance/stocks/company-profile/MAR.O
Marriott International, Inc. (2018). Marriott International, Inc.. Marriott International, Inc..
Retrieved 26 January 2018, from
http://files.shareholder.com/downloads/MAR/0x0x936409/834E45D9-8979-4190-AE47-
702FBFF54755/Marriott_2016_Annual_Report.pdf
Marriott News Center. (2018). Marriott News Center. Retrieved 25 January 2018, from
http://news.marriott.com/2017/01/marriott-international-caps-2016-historic-global-
expansion/
Marriott News Center. (2018). Marriott News Center. Retrieved 26 January 2018, from
http://news.marriott.com/2016/11/9766/
NASDAQ.com.(2018). NASDAQ.com. [online] Available at:
http://www.nasdaq.com/symbol/mar/financials [Accessed 28 Jan. 2018].

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Serafini, G. O., & Szamosi, L. T. (2015). Five star hotels of a Multinational Enterprise in
countries of the transitional periphery: A case study in human resources
management. International Business Review, 24(6), 972-983.
Stock Analysis on Net. (2018). Stock Analysis on Net. Retrieved 25 January 2018, from
https://www.stock-analysis-on.net/NASDAQ/Company/Marriott-International-Inc/Long-
Term-Trends/Total-Asset-Turnover

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Appendices:
1) Management experience (Turnover):
The Total Asset Turnover as of December 2016 is 0.71. The revenue is USD $17,072
and the total assets are 24,140 by the end of December (Stock Analysis on Net, 2018).
2) Corporate operating strategy Projected factors:
-Proposed management contract provisions and conditions
Management contract at the Marriott International contains some important terms and
conditions that are as listed below (Serafini & Szamosi, 2015):
 Term
 Operator guarantees
 Operating Fees
 Owner approval
 Performance measures
 Dispute resolution
 Capital expenditure
 Termination that also includes Early Termination
The management contract is generally a mix up of both the legal and the commercial terms.
Interestingly, some of these terms have a quick and sustaining effect on the cash flow. These
terms do also influence the performance of the operator (Serafini & Szamosi, 2015).
-Current financial performance

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Based on pro forma, if the acquisition of Starwood is considered, Marriott International
has anticipated an approximate earning more than $2.8 billion in the fiscal year 2016 (Marriott
News Center, 2018). The earning has considered the Starwood acquisition and the timeshare
business sold by the Starwood (Marriott News Center, 2018). The business has been the
successful and more such success has been aimed for the coming years. The efforts have been
given to generate an earning more than $1.5 billion in the coming two years. The earning will be
attained through the asset sales (Marriott News Center, 2018). Long-term operating agreements
have been planned to retain during the same period of time (Marriott News Center, 2018). The
purchase of Starwood is not the end of acquisition history for Marriott International. This will
rather include some more purchasing in future. The plan is for a sustainable and a continued
strong cash flow, which will also enable the repurchasing of some shares in the fourth quarter of
2016 (Marriott News Center, 2018).
The mentioned facts do show that Marriott International will be benefitted from the
acquisition of Starwood Hotels & Resorts. The takeover process as stated earlier is still under
process. The company is expected to be at the leading position once the takeover process is
completed. This will not only improve the financial performance but will also help the company
in moving to the top position in terms of net revenue earning. The position is at the moment,
dominated by the Hilton International.
Income
Statement
Balance Sheet Cash Flow
Gross Revenue
Profit
$2,626,000 Total Current
Assets
$3,371,000 Net Income $780,000
Operating Income $1,368,000 Total Assets $24,140,000 Net Income $811,000

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Adjustments
Net Income $780,000 Total Current
Liabilities
$5,147,000 Net Cash Flow-
Operating
$1,582,000
Net Income
Applicable to
Common
Shareholders
$780,000 Total Liabilities $18,783,000 Net Cash
Flows-
Investing
($2,409,000)
Total Equity $5,357,000 Net Cash
Flows-
Financing
$1,589,000
Total Liabilities
& Equity
$24,140,000 Net Cash Flow $762,000
Table 1: Financial Data 2016 of Marriott International
(Source: NASDAQ.com, 2018)
-Brand value
Despite the plans to construct the world’s largest hotel company, Marriott lags behind to
Hilton in terms of brand value (bighospitality.co.uk, 2018). The company had plans to open up
the biggest hotel company, which is why it had acquired the Starwood Hotels & Resorts.
However, things did not happen the same way and the overall brand value of Marriott
International is more than $2bn lesser than the brand value of Hilton International
(bighospitality.co.uk, 2018). However, the acquisition process is still in progress. The moment,
by which the takeover process will be completed, Marriott International will be at the leadership
position in terms of hotel brand owners (bighospitality.co.uk, 2018).

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-Provide a list of properties managed by Marriott International and include financial
results achieved at similar properties under management
The Marriott International has divided the properties into two sections like the company-
owned properties and the licensed, franchised & joint venture properties. The expansion of
properties through the mentioned ways has helped the company maintain incrementing revenues.
As per the report of 2016 financial results, the total expense including the leased, owned and
other-direct expenses is $900 million (Marriott International, Inc., 2018). On the other hand, the
total revenue including the revenues from leased, owned and other properties is $1,307 million
(Marriott International, Inc., 2018). This is far much better than the revenues for the year 2015
(Marriott International, Inc., 2018). The net revenue in 2015 was $253 million; however, it was
$407 million in 2016 (Marriott International, Inc., 2018).