Marriott Presentation

Alfonso | Cardenas | Cua | Intal | Madelar | Lubaton | Veracruz

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Vision-Mission Vision : To become the leading provider and facilitator of value-based luxury, leisure and business experiences across the globe Mission : To create an environment conducive and helpful to both our employees and customers, thereby encouraging our employees to work at their maximum capacity in being of service to our customers whilst providing our customers with

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To provide “ Good Food & Good Service at a Fair Price”

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Marriot International North American full-service lodging North American limited-service lodging International lodging Luxury Timeshare Synthetic Fuel

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Marriott Facts 2,832 Lodging Properties 2,046 furnished corporate housing rental units 75% of Marriott’s 1,048 company-operated properties and 93 % of the 1,784 franchised properties are in the United States. Marriott has strong international presence in countries like Canada, Mexico, China, UK and Germany Cruise Lines, Food Service companies, restaurants, turnpike units, and retirement communities.

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SWOT - Analysis 7

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Strengths Large Expanse of Brands Geographic Presence Global leader in hotels market More franchise means bigger OI -- they have more control that it seem Website and Social Network

Excellent Strategies to attract and retain employees Marriott culture retention balancing against the identities of the brands Eco-friendly Customer Hospitality / Centric Brand Equity

Focused divestiture Efforts especially with in’t companies

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Weaknesses Focus on US instead of international establishments (over-reliance on US market) Over dependence on luxury brands lack of low-cost brands Marriott being targeted by fundamentalists or extremists

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Opportunities Threats Timeshare not popular anymore Emerging Asian Travel and Tourism Markets Trend fro low-cost goods Distinction amongst hotel service offered

Economic Recession = lower consumer spending

Boom of Economy Hotel Brands Political instability

Environmentally and Family Oriented

Increase of Real Estate in Asia

Decrease of cost of real estate in the US

Epidemics (H1N1)

Eco-tourism

Terrorism

Tight US Borders

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Strengths-Opportunities Action Points Acquire or establish hotels in Asia Initiate Budget and Economic Brands Divest in limited-service brands with the economy brands of other companies Differentiation of a particular brand in certain locations Apply eco-friendly efforts, and eco-tourism across the chain Acquire US properties to reduce debt/cost of new establishments Strategically Build hotels/resorts that would most preserve the environment

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Weakness-Opportunities Action Points Expand in Asia Build high-end inns Joint ventures in other high risk countries and use the local’s name Build economy brands over cheap US land where the savings in the land are directly passed onto the consumers/ customers

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Strength-Threat

Action Points

Company wide restructuring to reduce cost and increase efficiency Expand today to maintain lead and reap the rewards later on especially in Asia Provide financial assistance to franchisees to start or expand operations (preferably international) Slowly depart from time-share hotels Hire local employees by collaborating with local government units Hire, train and support the localities where Marriott operates in to win the hearts and minds

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Weaknesses-Threat Action Points Work towards expansions overseas due to economic meltdown Use relationship with employees to temporarily reduce salary to be more competitive Joint Ventures with other companies especially in new “low cost” businesses Build economy brands now

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Financial Analysis 15

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Their current ratio goes beyond the industry standard but their quick ratio is less than industry standard

Liquidity Ratios

2008

2007

2006

2005

Current Ratio

1.33

1.24

1.31

1.59

Quick Ratio

0.55

0.7

0.84

1.04

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Show’s Marriott’s Acquisition culture, where they use the shareholder’s investments when venturing to other avenues. Leverage Ratios

2008

2007

2006

2005

Debt to Total Asset Ratio

0.84

0.84

0.7

0.62

Debt to Equity Ratio

5.45

5.25

2.28

1.62

Long Term Debt to Equity Ratio

2.16

1.95

0.69

0.52

Times Interest Earned

5.37

7.17

12.15

3.69

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Marriott is the leader in total revenue in the lodging industry but has low Net Profit Margin and Profitability Ratios due to high costs (labor) and acquisitions Profitability Ratios

2008

2007

2006

2005

Operating Profit Margin

0.07

0.1

0.08

0.5

Net Profit Margin

0.03

0.05

0.05

0.06

Return on Total Assets

0.04

0.08

0.07

0.08

Return on Stockholder’s Equity

0.26

0.49

0.23

0.21

Earnings per Share

$0.99

$1.75

$1.41

$1.45

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Due to the economic recession that hit the United States during the mid to late 2008 and with Marriott’s strong presence in the US, sales and profit declined significantly

Growth Ratios

2008

2007

2006

2005

Sales

-0.85%

8.30%

5.28%

14.37%

Net Income

-47.99%

14.47%

9.12%

12.25%

Earnings Per Share

-43.43%

24.11%

-2.76%

16.94%

Dividends per Share

17.39%

19.79%

20.00%

21.21%

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Strategies and Objectives

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Profitability Strategies Managing Properties opposed to owning properties Invest in projects that increase shareholder value Optimize the use of debt in the corporation’s capital structure

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Human Capital Strategies The right person for the right job Staying just beyond the paycheck A great and caring work environment Promoting associates from within Building Brand Equity

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Customer Strategies Sales for strategy (Sales force One) accommodating all customer needs in a one-stop-fashion

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Internet Strategies “Look no Further Best Rate Guaranteed” Hassle Free Navigation, and access And transparency in prices Partnerships with 3rd party websites

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Space Matrix

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Marriott International

Internal Strategic Position

Average Points

Financial Strength (FS)

4.28

Competitive Advantage (CA)

-1.5

External Strategic Position

Average Points

Environmental Stability (ES)

-4.1667 (y axis - .12)

Industry Strength (IS)

4 (x axis - 2.5)

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Marriott International !

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Local Settings Shangri-la Hotel & Resorts dominates Ayala Land Groups is the franchisee of Marriott in the Philippines Megaworld is developing new hotels and resorts to be opened in late 2010 There are 4,800 accommodation establishments in the Philippines mostly small to medium enterprises

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Primary Competitors Shangri-la Hotels and Resorts Manila Mandarin Waterfront Philippines Inc. Global Hyatt Corp. SM Investment Corp. (Paramount Hotels/ Hamilo Resrt/ Regent Hotels/Micro Inn) Ayala Land Group (Marriott/Intercontinental)

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Hotel/Resort

Revenues

Makati Shangri-la

P 3,383,500,000

Shangri-la Mactan Island

P 2,141,170,000

Peninsula Manila

P 1,530,700,00

Hyatt Hotel

P 1,450,000,000

EDSA Shangri-la Manila

P 1,424,800,000

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Philippines’ Top Hotels

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Answers to Questions 32

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Is Marrio) relying too heavily upon the domes6c market  for  expansion  instead  on  the  faster  growing  economies  overseas? Currently, More than 75% of the proper6es and income of  Marrio) comes from the United States market. Also, even though the numbers of rooms overseas is  considerably higher compared to the United States, the North  American Lodging revenues pushes Marrio) to expand in the  United States. 

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Proposed Acquisi.ons Acquisi6on  of  Beijing  Bed  ‘n  Breakfast  Inn  Chain  and  establish a chain of Inns along the Yantze River from the  Tibet Foot‐lands to Shanghai as High‐end Inn Ports Partner  with  the  Mactan  Interna6onal  Airport  and  create a super conven6on center right beside the Airport  to cater to the businessmen in Greater Asia.  Underwater HOTEL !!!!!

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Proposed Org‐Chart 

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