Marriott International Inc. Case

Marriott International Inc. (MAR)

Executive Summary

With more than 2,700 operated or franchised properties in more than 65 countries, Marriott International Inc. is a leading worldwide hospitality company. Marriott’s hotels include full-service brands such as Renaissance Hotels and Resorts, extended-stay brands, and it owns the Ritz-Carlton luxury hotel chain and several time-share properties.

The company headquarters is located in Washington D.C., with approximately 143,000 employees and growing at a 7.5% annual employee growth rate. In the fiscal year of 2005, revenues from continuing operations reached $11.55 billion. For the year 2005, Marriott’s sales growth topped out at 14.4% with a net income of $669 million. Marriott International, Inc. ranks in standard industry listings such as number 203 in FORTUNE 500

The extremely competitive lodging industry impacts Marriott’s ability to compete successfully with other hotel and time share properties. Marriott operates in markets that contain numerous competitors. There are approximately 675 lodging management companies in the United States, including several that operate more than 100 properties. Its major competitors include Hilton Resorts Worldwide, Inc, and the Four Seasons Hotel, Inc. Marriott’s ability to remain competitive and attract and retain travelers depends on the success in distinguishing the quality, value and efficiency of lodging products and services from those offered by competitors.

Marriott is subject to the range of operating risks common to the hotel, timeshare and corporate apartment industries. The profitability of hotels, vacation timeshare resorts and corporate apartments that we operate or franchise may be adversely affected by a number of factors. Changes in privacy law have had an adverse affect on Marriott’s ability to market their products effectively. The timeshare business, and to a lesser extent, lodging segments, rely on a variety of direct marketing techniques, including telemarketing and mass mailings. Recent initiatives, such as the National Do Not Call Registry and various state laws regarding marketing and solicitation, have created some concern about the continuing effectiveness of telemarketing and mass mailing techniques and could force further changes in Marriott’s marketing strategy.

Management Problem Statement

These privacy regulations have had a negative impact on the success of traditional marketing techniques. Management is now faced with analyzing the possible setbacks caused by such regulations and must find alternate ways to market their products to consumers.

Marketing Research Questions

o Why are people requesting not to receive these calls?

o What