Marriott sells its services and accommodations through their company website along with other 3rd party

re-sellers. A huge trend in the hotel and lodging industry are the increasing popularity of low-cost resellers such as Expedia and Orbitz. While these companies have decreased the amount of rooms that arent occupied on a nightly basis across the hotel industry, there has been some damage to the overall brand that certain hotel franchises have created for themselves. By offering consumers the ability to compare hotel rooms and simply choose the lowest cost offering, a certain amount of brand loyalty has been diminished. Too combat this sort of reduction in consumer loyalty, Marriott uses a consumer reward program as part of their overall corporate strategy. This is an extremely common practice amongst other hotel chains. Prior to 2011, another large business segment under the umbrella of Marriott International was its timeshare and vacation club locations. However, in 2011, Marriott spun-off this timeshare business segment and announced it as a completely separate publicly traded company. CEO J.W. Marriott Jr. described the transaction and the reasoning behind it: The transaction will permit both companies to tailor their business strategies to best address market opportunities in their respective industries. The new timeshare company will be positioned to expand faster over time while Marriott International will further advance its longstanding strategy of separating real estate from management and franchise operations. With two public companies, shareholders will be able to pursue investment goals in either or both companies rather than one combined organization. Their diligent focus on people, both internally and to the customers the serve, is a direct representation of those efforts. Marriott, just as any other business is primarily focused on increasing shareholder value and driving up their bottom line profit numbers. Marriott experienced some tremendously difficult times during the economic downturn of the past few years, and their financial performance bore those results. However, now that the financial market is experiencing a bit of a rebound and disposable income levels are returning to their previous positions, Marriott is in a position to realize the benefits of the lessens they should have learned during those difficult times. Finally, Marriott continues to be a company focused on growing their brand and increasing their scope of operation. Through acquisition and continued development of existing brands in new untapped markets, Marriott is diligent in their pursuit of an aggressive growth strategy. International expansion and an increased global presence are at the heart of Marriotts growth strategy going forward. 8

A SWOT analysis will further clarify the position that Marriott currently finds itself in and provide an opportunity for recommendations for them going forward. One of Marriotts primary strengths is their strong brand portfolio. The companys portfolio of lodging brand is the broadest of any company in the world (Global Data). Another strength that Marriott has realized in recent years is a dramatically improved operational efficiency. Marriott is reporting a strong operational efficiency and a decreased cost structure, which has resulted in a higher operating margin (Global Data). With that said, as was pointed out in the financial analysis of Marriotts two main competitors, there is clearly room for improvement in these areas. With all of that said, Marriott also must recognize and address some of its weaknesses going forward if it wants to improve their position. One of the most glaring weaknesses is their dependence on internet travel intermediaries. These intermediaries offer price comparison among the hotel operators in a bid to offer their customers services at the lowest price points, which may lure away Marriots customers to its low-price competitors. This could decrease the demand for the companys products and services, resulting in lower profitability (Global Data). Another weakness is Marriotts overdependence on the US market which generated over 83% of Marriotts revenue as a whole. In terms of opportunities, there are three primary opportunities Marriott should focus on: Growth Prospects in Europe and Latin America, Growth in Travel and Tourism Industry, and Portfolio Expansion in China and India. Marriott currently operates 174 hotel/lodging facilities in Europe and just recently entered into a joint-venture with Spanish hotel group AC Hotels that is expected to increase Marriotts position in Europe from #10 to #5. Also, Marriott entered into a partnership with PDG Realty for the development of 50 Fairfield hotels across Brazil and Latin America (Global Data). In terms of the travel and tourism industry, this market segment is expected to grow at an average rate of 4.3% through 9

2017 (Global Data). Finally, further expansion into markets in India and China will allow Marriott to capitalize on two steadily increasing international tourist destinations. Marriott also has to be aware of some threats to their business operation. The first of which is the nature of their business. The hospitality industry in which the company operates is highly dependent on a number of external factors for successful operation. Another threat is the notion of environmental risk. Marriott operates in a numerous geographic locations that could potentially be exposed to a number of different environmental hazards (ex. Natural disasters). Lastly, Marriott must continue to be aggressive in their position because of the intense competition that they face in their industry. The hospitality industry is highly competitive. In the US alone, there are over 870 independent lodging management companies (Global Data). Now, clearly, the majority of these companies dont have the capability to challenge Marriotts position alone, but collectively they could pose a threat. Porters Five Forces Evaluation travel sites has reduce brand loyalty and increased the ability of the consumer to control their price point agreement. Also, Marriott requires a certain level of legal standards and CSR with regards to who they select as a supplier of their offered good and/or service. extremely expensive to develop as well as incredibly high land costs in desirable locations industry do not readily exist es to stay outside of the hotel/timeshare

suppliers increased rivalry. Marriott is one of the leading hotel and leisure companies known for its strong brand portfolio in allthe major segments and market.The company operates in most major markets and segments aroundthe world through its luxury brands such as Marriott Hotels & Resorts, JW Marriott Hotels & Resorts,The Ritz-Carlton, Bulgari Hotels & Resorts, Grand Residences and mid-priced brands like Courtyard,and Fairfield Inn. At a corporate level, Marriott has a high brand recall.The company ranked 37 inthe Fortune s 2009 rating of World s Most Admired Companies after ruling the list as the numberone for ten consecutive years.The "Most Admired" list is made up of companies that are ranked byExecutives, Directors, and Analysts in their own industry on eight criteria, including innovation, peoplemanagement, uses of corporate assets, social responsibility, quality of management, financialsoundness, longterm investment, and products/services quality. STRENGHTS 1

Diversified hotel brands portfolio

Marriott has operations in six main hotel and lodging segments: Luxury, Collections, Lifestyle/Boutique, Signature, Select Service, and Extended Stay. 5 By diversifying the lines of business they offer their services in, they are able to reach almost every demographic market. The branding of each of these different business units implements an entirely different strategy, and the flexibility of having hotel accommodations across the entire industry spectrum gives Marriott the ability to cater their product offering accordingly.

2 Effective direct marketing techniques such as telemarketing, email marketing and postal mailings

Technical innovations to improve customer experiences and Constant upgrade of business processes
3. Sense of diversity among associates because of lessened associate turnover from 2007 onwards.

Good employee retention with a total workforce of 150,000

Green and greening operations and eco-friendly establishments.

We recognize the compelling need to run our hotels efficiently, and in 2009 we achieved our goal in the Americas of reducing energy consumption by 5% per available room (on a year-over-year basis after weather normalization).

Going Green Marriott also attracts customers through their Spirit to Preserve environmental strategy which works to green their supply chain by reducing fuel and water consumption on their properties. They also have a number of LEED (Leadership in Energy and Environmental Design) certified buildings and encourage employee initiatives to further contribute to the green movement. The U.S. Travel Association insists that supporting environmentally-conscious companies is still a priority for many travelers, even in an economic downturn. In 2009 Marriott announced that two of their Courtyard hotels, one in Chevy Chase, MD, and one in Portland, OR, were completely LEED certified. The entire industry within the US has only 20 hotels that are certified with this seal and Marriott has 50 of their own in line to achieve this title in the near future. Marriott recognizes the benefit these moves have both for the environment and for business. 5.

Operates a wide hotel reservation centres as of Q2 2009 that handles reservation request through partnership with MARSHA
Marriotts industry-leading distribution system is powered by MARSHA, our proprietary global reservation system. It is fully integrated with our revenue management, eCommerce, customer loyalty and property management systems, as well as the Global Distribution System (GDS) used by travel agents and systems of e-Intermediaries. MARSHA provides low costs per transaction, high contribution to occupancy, and high revenues generated per call. Driving Value to Your Business Efficiently All reservations from call centers, Marriott.com, GDS or other electronic channels come through the same centralized reservation system, providing significant efficiencies. In 2012, Marriotts reservation system: Generated more than 95 million reservations Produced more than US$30 billion in gross room revenue Processed reservations for more than 700,000 roomnights per day Generated US$138 million in cross-sales room revenue among Marriott brands Providing Global Service Excellence and Fluency Marriotts Worldwide Reservations Centers are staffed with more than 2,500 associates trained to serve customers in 12 languages: English, Spanish, German, Italian, French, Arabic, Cantonese, Mandarin, Japanese, Hindi, Dutch/Flemish and Portuguese. Leading Online Bookings Through Marriott.com Marriott continues to expand uses for its eCommerce platform to enrich guest experiences, entice customers to use electronic channels, and drive business to Marriott brands. Marriott.com is the worlds largest lodging web site, generating US$8.5 billion in gross sales in 2012. The site, used by three-quarters of all guests, has 30 million visitors per month and accounted for one in every four roomnights booked in 2012. Marriott.com maintains a consistent ranking in the Top 10 largest consumer retail web sites in the worldcurrently ranked at #9. Customers spend 3 million hours a month on Marriott.com and now book more revenue in a single day online than in our entire first year of operation.

6.

Cost reduction measures result in maintenance of leverage and return targets

Despite these new expansion plans, however, Arne Sorenson, COO of Marriott International, stresses the companys need to shift focus away from high investments in an effort to keep the balance sheet strong. Newly appointed Sorenson encourages a focus on driving

incremental revenue through increased attention on the companys cost cutting techniques and marketing and communication channels. Advantages Cost cutting at the resort level increases marginal profit per property without increasing their room rates. With competition in the industry so heavily focused on price at this point, raising room rates is not an option. Instead, the company has focused on cutting down on employees, restaurant hours, water and fuel consumption, and other utilities on the property level. This way they are able to save some money without sacrificing their competitive pricing.

Strengths 1) Diversified hotel brands portfolio 2) Effective direct marketing techniques such as telemarketing, email marketing and postal mailings 3) Sense of diversity among associates because of lessened associate turnover from 2007 onwards and good employee retention for 150,000 4) Green and greening operations and eco-friendly establishments. 5) Operates a wide hotel reservation centres as of Q2 2009 that handles reservation request through partnership with MARSHA 6) Cost reduction measures result in maintenance of leverage and return targets 7) Better interiors/Well done renovations for Indian and as well as global hospitality sectors are looking at a boom 11) Preferred hotel provider by the customers 9) Well-ranked including Top 10 Hotels and Fortunes 100 Best Companies to Work Force 10) Investments on loans and non-controlling equity investment consistently in 2009 for development spending 8) The company has developed strong position regarding the customers as with attaining the loyalty of those customers.

Weaknesses 1) Domestic market focus (US market) 2) Some segments are no longer profitable like the Timeshare segment 3) Overdependence on luxury brands despite weaker demands for high-end hotels 4) Pricing strategies of the competitors 5) Seasonality fluctuations resulting to lowered RevPAR 6) Downgrade in credit ratings in 2009 may reduce availability of capital and/or increase cost of capital 7) Declining margins due to debts and high operating costs including administrative costs 8) Property development risks due to project cost that are not pursued to completion 9) Vulnerable to global economic downturns including foreign currency exchange fluctuations 10) Inability to maximize capital investments and to recycle such is a resultant of ineffective strategies to recover loans and refinance debts Threats 1) Declining consumer confidence resulting in decreased in RevPAR in North America by 18.5% and 18% worldwide 2) Global financial crisis of 2008 disrupted capital markets from Q4 2008 to date 3) Tight competition w/ approximately 852 lodging management with more than 100 properties in the US 4) Timesharing is no longer trendy 5) Economy brand(s) development strategies of competitors 6) Lodging properties depreciates overtime resulting to declining market value 7) Risks of doing business in/doing business with 8) Geo-political instability including terrorism

Opportunities 1) Ongoing renovative programs enhance earning power of the lodging properties 2) Eco-tourism and environment- and family-friendly concepts in lodging properties 3) New product and categories development such as corporate segment or creation of a niche market like the backpackers segment 4) Improvement in group bookings in Q4 2009 5) Trends for low-cost brand/segment 6) Strong cost control plans offset the 380 pts decrease in profit margins from 2008 to 2009 7) Further penetration of the Asian market such as Singapore with only 2 and Hong Kong with none total number of properties as of year-end 2009 8) Lodging properties generate higher occupancies and RevPAR rate by 10% in the US and 12%, non-US 9) M-commerce and social media marketing 10) Share of non-US total revenues is estimated to increase by 16% in 2010