Marriott Inc. Valuation Report
Financial modeling and valuation
Carey Business School
Yunqi(Erica) Zhou
April 28th 2016
Business Description
Marriott Internal, Inc. (NASDAQ: MAR) is a global lodging
company with more than 4.400 properties in 87 countries. The
company is headquartered in Bethesda, Maryland, USA with a
history of nearly 90 years. The company earns revenue through
operating and franchising hotels and licensing vacation
ownership resorts under 19 brands. Marriott also features the
awarding-winning guest loyalty program, Marriott Rewards and
Ritz-Carlton Rewards program with surpass 50 million
members.
Industry Overview & Competitive Positioning
The global hotel industry is broadly segmented into branded and
non-branded hotels. Marriott operates in the branded hotel
market, which account for nearly 53% of the total hotel market.
Five leading brands (IHG, Accor, Hilton, Marriott and Starwood)
take a proportion of approximately 30% of the total branded
market, and nearly 65% of the develop pipeline (hotels under
construction).
Demand Drivers
The demand is driven by global economic growth and the
increasing trend for both domestic travel and international travel.
In the long run, the growth of lodging industry is in line with GDP
growth. Other drivers include Traveler Demographics, Social,
Technology and Competitors.
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Competitive Position
The lodging industry is highly competitive. Competitors include
hotel chains in national wide venues and individual companies
in regional markets. Companies that offer alternative lodging
solutions and travel intermediaries that provide search options
also become new competitors. Marriott keeps competitive
advantages by providing high quality products and services.
However, operating income could contract if Marriott fails to
keep outstanding brand reputation.
Conclusion
In conclusion, Marriot has competitive advantage as market
leader, but it has to struggle to keep the leader position in a
highly competitive market environment. Economic and
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Inter Continental Hotels Group, <Industry and market trends>, Updated 05 March 2015
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Figure1: Accommodation
and food services GDP
Source: U.S. Department of Commerce
Source: Euromonitor International
Travel and Tourism: Online Travel
Intermediaries
Figure 2:
Online Travel Intermediaries
Source: self-computation using Excel
demographic growth provide new opportunities, and the
innovation culture instills energy into the enterprise.
Financial Analysis
Favorable performance due to innovation
The management and franchise business model continues to
allow rapid unit growth while generating positive returns to
shareholders. Marriott realizes stable growth on sales, and its
Figure 6: Stock Price & Dividends
Source: Marrio 2014 Annual Report