October 7, 2010 Marriott International and AC Hotels (based in Spain) announce a new joint venture that will thrive on the strengths of both companies and offer an urban, 4-star line of hotel accommodations in Europe and Latin America. The new JV will be called AC by Marriott. This new JV will focus on market leadership in Europe and Latin America. TO begin, more than 90 current AC Hotel locations will be re-branded and will enter into long-term management or franchise contracts wiht AC by Marriott.
The new AC by Marriott branded hotels are expected to launch in 2011, assuming the Joint Venture is approved and all documents closed byu the end of the 20-10 calendar year.
For more information, visit Marriott's Investor Relations ling below:
AC by Marriot Joint Venture
Thursday, October 14, 2010
Tuesday, October 12, 2010
3rd Quarter 2010 Results
October 6, 2010 - Marriott International presented its' 3rd Quarter Financial results to investors and the public.
In early July, Company officials had predicted an increase in EPS from 3rd Quarter 2009 to $0.18-$0.22 per share. The prediction was verified as Marriott reported a diluted EPS for the third quarter of $0.22 per share which was a 47% increase over the same period in 2009.
As improtant as this increase in EPS is to shareholders, of maybe more importance to the hopspitality industry as a whole is the $83 million net income reported for the third quarter 2010, compared to $466 million net loss reported at the end of the 3rd Quarter 2009. Does this signify an economic turnaround? Time will tell, but for the hospitality industry in general, it does signify that world-wide people are now traveling again, which is the life blood of Marriott and the entire hospitality industry.
Follow the link below to see the entire 3rd Quarter report:
Marriott Interntional 3rd Quarter 2010 Results
In early July, Company officials had predicted an increase in EPS from 3rd Quarter 2009 to $0.18-$0.22 per share. The prediction was verified as Marriott reported a diluted EPS for the third quarter of $0.22 per share which was a 47% increase over the same period in 2009.
As improtant as this increase in EPS is to shareholders, of maybe more importance to the hopspitality industry as a whole is the $83 million net income reported for the third quarter 2010, compared to $466 million net loss reported at the end of the 3rd Quarter 2009. Does this signify an economic turnaround? Time will tell, but for the hospitality industry in general, it does signify that world-wide people are now traveling again, which is the life blood of Marriott and the entire hospitality industry.
Follow the link below to see the entire 3rd Quarter report:
Marriott Interntional 3rd Quarter 2010 Results
Outsourcing
During 2005, Marriott International began outsourcing all Human Resource functions to Hewitt Associates. With this outsourcing venture, Marriott transferred responsibilities for all benefits administration, compensation, recruiting services and employee training and development for more than 130,000 employees.
In addition to outsourcing the HR function to Hewitt, Marriott has also outsourced the support of its PeopleSoft financial software system to Accenture. Such moves have been made, per Marriott Internationals, so they can focus their attention on guests.
In addition to outsourcing the HR function to Hewitt, Marriott has also outsourced the support of its PeopleSoft financial software system to Accenture. Such moves have been made, per Marriott Internationals, so they can focus their attention on guests.
Marriott's Competitive Strategy
Marriott quickly recognized that one hotel brand would not cater to every guests needs. Therefore, Marriott utilizes a Broad Differentiation strategy in that there are multiple hotel brands all catering to a different type of traveler or consumer in the hospitality market. From upscale offerings like Ritz Carlton and JW Marriott Resorts and Spas for the consumer desiring high-end and luxurious accommodations to the Courtyard by Marriott that provides the business traveler in-room offices space, to the Fairfield Inn which provides Marriott quality for travelers on a budget, Marriott International has lodging brand that will meet about any consumer desires.
The aforementioned Ritz Carlton, JW Marriott and Marriott Hotels and Resorts are marketed toward a consumer that desires a more upscale lodging experience and is willing to pay a higher cost for the extra luxurious amenities. Courtyard by Marriott provides business travelers space to have a remote office set-up in room and affords the ability to be productive after hours on business trips. Springhill Suites is a moderate hotel offering a single traveler or a family a living area to unwind before a good nights rest. Residence Inn and Townplace Suites offers extended stay accommodations for travelers that are looking for a place a little more like home. These accommodations offer full size kitchens and living areas with the sleeping quarters completely separated. Finally, the Fairfield Inn as mentioned above is for the budget traveler that desires Marriott quality accommodations.
All-in-all, there is a Marriott for all sorts of occasions and Marriott's many offerings in accommodations, all providing exceptional Marriott service and quality, assist Marriott in their mission of building customer loyalty.
The aforementioned Ritz Carlton, JW Marriott and Marriott Hotels and Resorts are marketed toward a consumer that desires a more upscale lodging experience and is willing to pay a higher cost for the extra luxurious amenities. Courtyard by Marriott provides business travelers space to have a remote office set-up in room and affords the ability to be productive after hours on business trips. Springhill Suites is a moderate hotel offering a single traveler or a family a living area to unwind before a good nights rest. Residence Inn and Townplace Suites offers extended stay accommodations for travelers that are looking for a place a little more like home. These accommodations offer full size kitchens and living areas with the sleeping quarters completely separated. Finally, the Fairfield Inn as mentioned above is for the budget traveler that desires Marriott quality accommodations.
All-in-all, there is a Marriott for all sorts of occasions and Marriott's many offerings in accommodations, all providing exceptional Marriott service and quality, assist Marriott in their mission of building customer loyalty.
Marriott Weaknesses
Marriott suffered from downgrading of its debt ratings by S&P in 2009. The downgrade to BBB- was a result of the overall effect felt on the travel and hospitality industry from the economic decline which resulted in corporate executives making fewer business trips and opting for meetings through electronic media and reductions in family travel.
This downgrade in debt rating increases the overall cost of capital and makes it more difficult and expensive for Marriott to access credit. Fortunately, on October 1, 2010 as the economy has begun to rebound slightly and travel has since increased, S&P has increased Marriott's overall debt rating to BBB and Marriott's reducing the cost of capital and increasing Marriott's access to lower interest rate credit.
This downgrade in debt rating increases the overall cost of capital and makes it more difficult and expensive for Marriott to access credit. Fortunately, on October 1, 2010 as the economy has begun to rebound slightly and travel has since increased, S&P has increased Marriott's overall debt rating to BBB and Marriott's reducing the cost of capital and increasing Marriott's access to lower interest rate credit.
Friday, October 1, 2010
Marriott's Muscle
Marriott's main strength is it expertise in hotel development and management. From a customer's perspective (speaking from my own experience anyway) the Marriott hotel brands are managed consistently across all brands. I've never left a Marriott (whether a Fairfied Inn or a JW Marriott) and wish I had stayed elsewhere. This image sets the Marriott brand apart fro other hotels which has more impact on the lower and mid-scale brands like Fairfield, Courtyard, Townplace, etc. When I'm looking for a lower or midscale place to stay, I never even consider the competition if there is a Marriott brand nearby. On the other hand, I frequently leave other hotels with the thought "this town needs a Marriott."
One great internal strength is the corporate governance structure of Marriott. Having a CEO and board chair thinking on the same page is always beneficial for a company. Thus, having the CEO be the chairman of the board strengthens Marriott in investors eyes. Shareholders can be confident that management WILL be focused on what is best for the shareholders, which is increasing the shareholder's value of their investment. Market Leadership and having a "world" branded name, increases the overall value of Marriott ebables successful ventures in the international market. Management's ability to adapt to changes in personal preferences and create lodging ventues that provide what cutomers need and want has enabled Marriott to continue as a maket leader in the hospitality industry.
One great internal strength is the corporate governance structure of Marriott. Having a CEO and board chair thinking on the same page is always beneficial for a company. Thus, having the CEO be the chairman of the board strengthens Marriott in investors eyes. Shareholders can be confident that management WILL be focused on what is best for the shareholders, which is increasing the shareholder's value of their investment. Market Leadership and having a "world" branded name, increases the overall value of Marriott ebables successful ventures in the international market. Management's ability to adapt to changes in personal preferences and create lodging ventues that provide what cutomers need and want has enabled Marriott to continue as a maket leader in the hospitality industry.
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