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Marriott International Inc - Travel andTourism - World

Euromonitor International : Global Company Profile

January 2009


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Marriott International Inc - Travel and Tourism World

Euromonitor International Page i

List of Contents and Tables

Strategic Evaluation................................................................................................................................................1SWOT analysis..........................................................................................................................................................1

12 Month Highlights .................... ...................... ..................... ..................... ..................... ...................... ................22007-2008 ..................... ..................... ..................... ..................... ...................... ..................... ..................... .............2

Prospects....... ...................... ..................... ..................... ...................... ..................... ..................... ..................... ......3Core Businesses ................... ..................... ..................... ..................... ...................... ..................... ..................... ......3Growth Opportunities .................... ...................... ..................... ..................... ..................... ...................... ................3Limited Potential........... ..................... ..................... ..................... ...................... ..................... ..................... .............5

Table 1 Marriott International Inc: World Sector Sales Performance 2007.................................... 5Table 2 Marriott International Inc: Hotels Regional Sales Performance 2007 ...................... ......... 5

Company Strategy ..................................................................................................................................................5Strategic Objectives and Challenges.........................................................................................................................6Ownership Events ................... ..................... ...................... ..................... ..................... ...................... ..................... ..6

Table 3 Marriott International Inc: World Shares & Rankings in Travel & Tourismby Sector 2006-2007.......................................................................................................... 6

Table 4 Marriott International Inc: World & Regional Shares in Travel & Tourism bySector 2007........................................................................................................................ 6

Company Structure ................................................................................................................................................7Marriott International Inc........... ..................... ..................... ...................... ..................... ..................... ....................7

Summary 1 Marriott International Inc: Travel & Tourism Key Facts................................................... 7Production and Distribution ..................... ..................... ..................... ...................... ..................... ..................... ......7

Brand Assessment..................... ..................... ..................... ...................... ..................... ..................... ....................7

Brand Strategy ..................... ..................... ..................... ..................... ...................... ..................... ..................... ......7Marriott Hotels & Resorts .................................. ...................... ..................... ..................... ...................... ................8Courtyard.................................................................................................................................................................. 8Residence Inn................... ..................... ...................... ..................... ..................... ..................... ...................... .........9Renaissance Hotels & Resorts ..................... ...................... ..................... ..................... ..................... ...................... ..9Ritz-carlton .................. ...................... ..................... ..................... ...................... ..................... ..................... .............9

Appendices............................................................................................................................................................... 9Financial Summary.................................................................................................................................................10

Table 5 Marriott International Inc: Financial Summary 2003-2007 .................... ..................... .... 10Company Background.............................................................................................................................................10

Summary 2 Marriott International Inc: Historical Development .................... ...................... .............. 10

Summary 3 Marriott International Inc: Subsidiaries 2007 .................... ..................... ..................... .... 15Summary 4 Marriott International Inc: Travel & Tourism Brands 2007............................................. 15Summary 5 Marriott International Inc: Company Locations ................... ..................... ...................... 15Summary 6 Marriott International Inc: Websites................................................................................ 15


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Euromonitor International Page 1

MARRIOTT INTERNATIONAL INC

STRATEGIC EVALUATION

SWOT analysis

Strengths

Global leader Marriott International Inc is the leader in the global hotels market, with a near 5% valueshare in 2007 and a large geographic presence.

Unhampered by hotel ownership the company owns less than 1% of its hotel portfolio and is thus lessvulnerable to real estate price fluctuations than rivals. Moreover, its emphasis on franchising facilitates therapid expansion of its portfolio.

Focused pipeline development Marriott International is pursuing a growth strategy to further consolidateits presence in foreign markets and capitalise on the booming travel and tourism industries of emerging

markets, which should continue to serve its business well in terms of revenue over the forecast period.Unfortunately, the global economic downturn is hindering expansion plans, particularly as consumerconfidence softens and demand for travel accommodation falls.

Strong internet presence Marriott International's website guarantees the best rates available, enticingprice-conscious consumers away from third party websites.

IT solutions Marriott International is upgrading its properties with technology that responds to the needsof business and leisure travellers. In the latter part of the review period, for example, it has transformed itspublic areas to encourage guests to work and socialise through the adoption of the latest design, technology,food and beverage offerings.

Weaknesses

Domestic market focus despite international expansion, Marriott International remains heavily reliant onthe US, making it sensitive to the changing fortunes of its domestic market.

Luxury brands mid-scale and upscale hotel brands leave Marriott International vulnerable to any potentialglobal economic downturns, particularly given that economy travel accommodation is gaining increasedpenetration in major destination markets.

Courtyard brand the Courtyard brand is maturing and losing its core business customers. Industry expertsbelieve the revitalisation process may not be enough to lure customers back mainly due to a fiercecompetitive environment, packed with exclusive offers and increasingly modern accommodation,particularly at a time when business travellers want to cut costs.

Lack of a low-cost lifestyle brand Marriott International does not have a low-cost lifestyle brand in itsproduct portfolio, like aloft from Starwood and Hotel Indigo from IHG.

Uncertainty around the launch of "Edition" the launch of "Edition" by Marriott, a new genre of a lifestylebrand that combines an intimate and unique travel accommodation experience, will come at a turbulentperiod, characterised by weak demand for luxury hotels in the US.

Opportunities

Emerging markets in order to offset the negative impact of such a challenging business environment andto capitalise on the opportunities present in emerging markets a number of hotels have turned to them.Marriott International is no different and Asia-Pacific countries became key target markets.

Individuated experience the growing consumer demand for an individuated travelling experience isgenerating potential for hotel operators to develop distinctive brands, properties and services.

Threats

Consumer confidence general economic and business conditions, which adversely impact the incomelevels of potential travellers, coupled with a rising lack of confidence in strong markets like the US, can


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have a negative impact on Marriott International's operations. This is particularly true given its strongpresence in North America, where it is the largest hotel brand in value terms with a strong focus on mid-scale and luxury brands. A downturn in business travel poor economic conditions are forcing businessesto reduce travel and spend less on travelling. Marriott's brands, especially the luxury brands, are likely tosee less travellers.

Economy brand development the rapid growth achieved by economy hotel brands in the last three yearsposes a potential threat for mid-scale, limited-service brands such as the SpringHill Suites.

Credit crunch there is a fear that the global travel and tourism industry will see a corresponding slowdownin revenue as consumers spend and travel less in the short term. Marriott International is dependent on theavailability of consumers willing to enter into credit agreements, and, therefore, a general spendingreduction will result in a drop in revenue. This also applies to potential investment from prospective hotelowners and franchisees looking to fund construction, renovations and investments.

12 MONTH HIGHLIGHTS

2007-2008

Marriott International Inc remained the absolute global leader in travel accommodation, with total sales ofUS$18 billion in 2007. Such a performance is the result of a business strategy that is focused on thecontinuous development of strong brands and business competencies. The unstable economic environmentas well as the non-stop consolidation within travel accommodation observed in the latter part of the reviewperiod, however, is likely to continue impacting Marriott International's operations in the short term.

In an attempt to offset the negative impact of a challenging business environment, Marriott International hasaggressively expanded its international presence. Its hotel pipeline development includes numerousproperties set to open through 2011 in India, China, Vietnam, Thailand, Norway, Sweden, Saudi Arabia,Latin America, the Caribbean and even in the US. The global economic downturn, however, is hinderingexpansion plans, particularly as consumer confidence softens and demand for travel accommodation falls.

In line with its international expansion strategy, Marriott International launched a Global Language

Learning programme, with 30 new language offerings for employees to learn how to speak differentlanguages.

Aside from investing heavily on new properties, Marriott International has also enhanced the benefits of itsMarriott Rewards programme to compete head-to-head with Hilton and IHG, boost overall brand loyaltyand increasingly attract new customers. Therefore, in 2008, it announced the introduction of no blackoutdates in January 2009, named Aeromexico as its new airline partner, and started offering members thepossibility to redeem points for trips on 17 cruise lines.

In August 2008, Marriott International also relaunched its MegaBonus promotion, whereby members couldearn up to 25,000 bonus points when using a Visa card to pay for travel accommodation.

In 2008, Marriott International upgraded its Spanish language website by adding a new functionality whichallows Spanish-speaking Marriott customers to compare hotel accommodations in their language. The new

function allows customers to search for travel accommodation based on their preference of hotel category,or amenity.

In October 2007, the company announced plans to open 59 hotels in nine Asian markets, including multipleopenings in China, India and Thailand, by the end of 2010.

Marriott's extended-stay Residence Inn brand launched a distinctive new advertising campaign in 2007 toshowcase its new Innfusion dcor.

In July 2007, the company's Courtyard, Residence Inn, Fairfield Inn, TownePlace Suites and SpringHillSuites brands eliminated Wi-Fi charges for guests in lobbies and other public areas in order to target on-the-go customers and boost efforts to develop multi-functional public interiors.

In 2007, Marriott deepened its commitment to attracting Generation X families by entering into anagreement with Nickelodeon for the creation of a chain of upscale water park resorts. The plan includes thelaunch of 20 parks by 2020, targeted directly at children and parents.


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PROSPECTS

Core Businesses

Marriott International Inc is engaged in the operation and franchising of hotels, the development andoperation of holiday ownership resorts, the operation of Marriott Executive Apartments, the provision offurnished corporate housing through its Marriott ExecuStay division and the operation of conferencecentres.

Between 2006 and 2007, its global value share remained unchanged as a result of the unstable economicenvironment.

Facing maturity and intense competition in key markets, most notably the US, Marriott International islooking to diversify its consumer base beyond the business travellers and attract a wider range of travellers,including Generation X families.

Geographic scope

As of October 2008, Marriott International had a diverse portfolio of over 3,000 travel accommodationoutlets representing 19 brands in 67 countries and territories.

North America remained at the core of Marriott International's operations in 2007. It is worth noting,however, that the company is a top ranked player in nearly all regions due to its strong presence in keydestination countries.

In early 2008, for example, it operated six hotels in India the JW Marriott Hotel Mumbai, the GoaMarriott Resort Panjim, the Hyderabad Marriott, the Renaissance Mumbai Hotel & Convention Center, theMumbai Lakeside Chalet Marriott Executive Apartments and the Courtyard by Marriott Chennai ; twohotels in Vietnam the Renaissance Riverside Saigon and the New World Hotel Saigon; and seven hotelsin Thailand the JW Marriott Hotel Bangkok, the Bangkok Marriott Resort & Spa, the Courtyard byMarriott Bangkok, The Mayfair, Bangkok Marriott Executive Apartments, the JW Marriott Phuket Resort& Spa, the Hua Hin Marriott Resort & Spa and the Pattaya Marriott Resort & Spa.

Marketing appeal

Through 2007 and into 2008, Marriott International launched advertising campaigns for its Marriott brand.Focused on business travellers, the advertisements aimed at making a rational and emotional connectionwith guests. The advertisements addressed Marriott's ability to adjust to distinct cultures while stillproviding a synchronised performance across its brands. The advertisements were featured at airports,targeted television stations such as CNN and select airlines.

In the same period, Marriott International launched a campaign featuring its Residence Inn brand, whichfocuses on extended stay guests. Also through artistic talent (trapeze artists, fire-eaters, etc.), theadvertisements represented the guest's ability to manage an extended stay through Residence Inn'samenities, all of which are suitable and specific to this audience. It also featured the brand's Innfusiondcor, featuring different zones in the room for extended stay travellers: sleeping, eating, working, relaxing.

Growth Opportunities

Travel accommodation sales are expected to maintain an upward trend but develop at a slower pacecompared to the review period, growing at a compound annual growth rate (CAGR) of 5%, to reachUS$684 billion in 2012.

In general, international expansion is a way for large US-based chains like Marriott International to combata downturn in travel in the US, which has been hard hit by a decline in the economy, and cultivate loyaltyamong travellers. As a result, the company is expected to continue to develop its international pipelineaggressively.

Emerging markets

In order to offset the negative impact of such a challenging business environment and to capitalise on theopportunities present in emerging markets, Marriott International has developed a strong pipeline


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development strategy for the next three years. According to industry sources, more than 60% of its full-service pipeline is outside the US.

In 2007/2008, the company announced the following pipeline developments: INDIA: 18 new properties and one expansion with a total of more than 4,500 rooms in Bangalore,

Chennai, Pune, Kolkata, Chandigarh, Ahmedabad, Amritsar, Gurgaon, Hyderabad, Kolkata New

Town, Noida, and the Mumbai International Airport scheduled to open through 2011. CHINA: 18 new properties in Shenzhen, Beijing, Hangzhou, Macao, Hong Kong and Guangzhou

scheduled to open through 2012. VIETNAM: The luxury JW Marriott brand is set to be introduced in Danang by 2011. THAILAND: 10 new properties in Bangkok, Phuket and Hua Hin scheduled to open through 2010. MIDDLE EAST: 39 new properties are scheduled to open through 2011. Marriott International is also

expected to manage nine new properties in the Kingdom of Saudi Arabia starting in 2010. The newproperties will be located in Riyadh, Jeddah, Dammam and Jubail and represent The Ritz-CarltonHotels, The Ritz-Carlton Residences, Marriott Hotels & Resorts, Marriott Executive Apartments andCourtyard by Marriott brands.

LATIN AMERICA and CARIBBEAN: Marriott International has announced plans to open hotels inEcuador, Honduras, Peru, Suriname and Trinidad & Tobago by 2010.

MEXICO: In July 2008, Marriott International announced plans to add 29 hotels to its Mexican

portfolio in the next five years.

It is important to note, however, that the global economic downturn is hindering expansion plans,particularly as consumer confidence softens and demand for travel accommodation falls.

Asia-Pacific is forecast to be the fastest growing regional hotels market over the 2007-2012 period, with aCAGR of 8%. Its dynamic performance is set to be driven by major emerging markets, most notably Chinaand India, which are seeing economic expansion, developing travel infrastructures, growing middle classesand an increase in foreign tourism generate demand for hotels. Along with Thailand, these are key targetmarkets in the company's plans to expand its hotels network in the region by the end of 2010.

Marriott International is in a strong position to exploit rapid development in Asia-Pacific because it hasalready established a significant foothold in the region. According to Ed Fuller, president and managingdirector of international lodging for Marriott International, the company's capacity to have such a strong

pipeline development in the region is founded in part on the success that its existing portfolio is enjoying.He states that, "When developers consider a hotel management company for their asset, they know Marriottwill deliver".

Developed markets

Marriott International also continues to expand its presence in developed markets. In October 2007, forexample, the company announced plans to expand its presence significantly in Scandinavia through amultiple franchise agreement with Scandinavian Hospitality Group. The agreement is expected to result inthe opening of 15 hotels under the Marriott, Renaissance, Courtyard and Marriott Executive Apartmentsbrands in Sweden, Norway and Finland by the end of 2013. Marriott International's first hotel inScandinavia, the Copenhagen Marriott, opened in 2001.

Unique experience In core developed markets, the shift in consumer demand towards lodging that provides an individuated

experience with an emotional aspect is set to provide growth opportunities during the forecast period. It isworth noting, however, that leading industry players such as Marriott International are already consideringthese opportunities and developing products such as "Edition", a new genre of lifestyle brand that combinesan intimate and unique travel accommodation experience.

Each distinct property for the Edition brand is expected to emphasise design, quality, originality,authenticity and character, while delivering impeccable personalised service. "Edition" luxury hotels areplanned for Paris, Madrid, Costa Rica, Miami, Washington, Chicago, Scottsdale (Arizona) and LosAngeles. The first properties are scheduled to open by 2010.

Loyalty programme

With over 28 million members worldwide, the Marriott Rewards programme is the world's longestcontinuously running hotel rewards programme. Members of Marriott Rewards account for approximately


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51% of total room nights, and the programme is an effective way for Marriott to market leisure stays, newhotels and business and social events. Besides earning free nights and free flights, membership in MarriottRewards offers priority check-in, room guarantees and a newsletter, including member-only special offers.Frequent travellers also enjoy elite benefits such as upgrades, special bonuses and gifts.

According to research conducted in June 2007, the Marriott Rewards programme allows guests to enjoy the

benefits 30% faster than other leading hotel loyalty programmes. Results were based on seven nights atStarwood, Hilton, InterContinental Hotels Group and Hyatt hotels of similar quality and points earned ondollars spent and assumed standard award offerings for base level members.

Limited Potential

The mature Western European market is expected to post the slowest regional growth in hotels over theforecast period, with a projected CAGR of only 1%. What growth there is, is expected to be driven by anincrease in the number of short breaks spurred by the growth in low-cost airlines and a rising number ofvisitors from America and Asia.

A weakening travel spending scenario in Europe is of concern to Marriott International. The weak summerrevPars in 2008 confirm that not only leisure travellers are cutting back on spending, but also that corporatetravel is also feeling the pressures of the economic slowdown and forced to reduce travel costs.

After Western Europe, Australasia and North America are expected to develop at a CAGR of 4% over the2007-2012 period. Such slow growth is set to derive from general economic and business conditions whichadversely impact the income levels of potential travellers and a rising lack of confidence in strong marketslike the US. This is likely to limit future operations, particularly given Marriott International's strongpresence in North America.

Table 1 Marriott International Inc: World Sector Sales Performance 2007

US$ millionMarket Market Market % of Company Global

size % CAGR % CAGR company share ranking2002-2007 2007-2012 sales 2007 2007

Hotels 392,199.9 8.3 4.7 100.0 4.6 1Source: Euromonitor InternationalNote: Percentage of company sales in each sector is calculated from rsp sales within this market in 2007. This figure

may be slightly distorted by double-counting products which appear in more than one sector

Table 2 Marriott International Inc: Hotels Regional Sales Performance 2007

US$ millionMarket Market Market % of Company Regional

size % CAGR % CAGR company share ranking2002-2007 2007-2012 sales 2007 2007

Western Europe 121,778.7 6.7 1.4 4.4 0.6 10Eastern Europe 14,683.3 16.0 5.7 1.1 1.3 2North America 106,016.5 7.3 4.4 89.1 15.1 1Latin America 36,968.7 10.4 6.9 1.2 0.6 6Asia-Pacific 86,578.0 10.0 8.3 2.9 0.6 7Australasia 3,303.8 12.6 4.4 0.7 3.6 8Middle East and Africa 22,870.9 8.1 4.5 0.7 0.5 9

WORLD 392,199.9 8.3 4.7 100.0 4.6 1Source: Euromonitor InternationalNote: Percentage of company sales in each region is calculated from rsp sales within this market in 2007

COMPANY STRATEGY


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Strategic Objectives and Challenges

Marriott International relies on its scale and "Global Reach. Personal Service." strategy, gaining membersthrough its loyalty programme and continuously expanding its hotel network.

Marriott International is also focusing on more individuated properties, targeted at an emerging class oftravellers who are seeking distinctive travelling experiences. The partnership with Nickelodeon to buildupscale resorts featuring state-of-the-art spas, pools, water parks and live entertainement with Nickcharacters as well as the launch of "Edition" are great examples of this.

Lack of infrastructure and higher costs hinder international expansion

Marriott International is expected to face many challenges when building abroad, which could limitexpansion or force companies to partner with local companies. For example, corruption continues tohamper the business environment in Asia-Pacific, being widespread in many countries in the regionincluding Indonesia, the Philippines, Vietnam and China. This imposes additional expense on businessesand raises the cost of doing business. Consumers are also affected by corruption since higher costs translateinto higher prices.

The lack of adequate infrastructure is another major obstacle to business and economic development in theAsia-Pacific region. Apart from markets such as Hong Kong, Singapore, Japan, Taiwan and South Korea,the rest face infrastructure problems. Growing urbanisation, increasing consumption and expandingeconomic activities have put strains on existing infrastructure in these countries.

The rising cost of real estate in dynamic markets like China, Vietnam, India and Russia has made it harderto find good property for less expensive brands. In an attempt to overcome this, Marriott International mustconsider strategic partnerships with local real estate companies and/or even consider moving into secondtier cities.

Ownership Events

Marriott International has continued to manage the hotels when Delek Real Estate, an Israeli propertycompany, and its partners agreed to buy 47 Marriott operated hotels from Royal Bank of Scotland foraround US$2.1 billion in 2007.

In 2006, Marriott International sold its interest in the 50/50 joint venture with Whitbread Plc, whichcomprised 46 hotels consisting of more than 8,000 rooms, for US$164 million. The company continued tomanage the hotels under the Marriott Hotels & Resorts and Renaissance Hotels & Resorts brands, andcontinued to do so when Whitbread sold the hotels to Royal Bank of Scotland later in the year for 951.4million (US$1.7 billion).

Table 3 Marriott International Inc: World Shares & Rankings in Travel & Tourism by Sector 2006-2007

% retail value rspShare Ranking Share Ranking Sector Company2006 2006 2007 2007 growth growth

2006/2007 2006/2007

Hotels 4.6 1 4.6 1 4.9 5.5Source: Euromonitor International

Table 4 Marriott International Inc: World & Regional Shares in Travel & Tourism by Sector 2007

% retail value rspWE EE NA LA As Au

Hotels 0.6 1.3 15.1 0.6 0.6 3.6

Af/ME WO


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Hotels 0.5 4.6Source: Euromonitor InternationalNote: Signifies no presence or negligible shareKey: WE=Western Europe; EE=Eastern Europe; NA=North America; LA=Latin America; As=Asia-Pacific;

Au=Australasia; Af/ME=Africa/The Middle East; WO=World

COMPANY STRUCTURE

Marriott International Inc

Based in the US, Marriott International is a global operator and franchiser of hotels and related facilities,with a network of over 3,000 travel accommodation outlets representing 19 brands in 67 countries andterritories. Its operations are grouped into six business segments: North American Full-Service Lodging,North American Limited-Service Lodging, International Lodging, Luxury Lodging and Timeshare.

As of December 2007, Marriott International's brand protfolio included 520 Marriott Hotels & Resorts,Marriott Conference Centers or JW Marriott Hotels & Resorts properties; 68 Ritz-Carlton hotels; 141Renaissance hotels; 767 Courtyard hotels; 537 Fairfield Inn properties; 177 SpringHill Suites properties,546 Residence Inn hotels; 141 TownPlace Suites properties; two Bulgari Hotel & Resorts properties, 61timeshare properties; and 39 corporate housing and residential units.

Marriott International earns base, incentive and franchise fees upon the terms of its management andfranchise agreements. It also generates revenue through its timeshare operations by selling timeshareinterval, fractional and whole ownership properties, operating resorts and financing customer purchases oftimesharing intervals. In addition, the company earns revenues from the limited number of hotels it ownsand leases, as well as generating revenues and tax credits from its synthetic fuel operations.

Summary 1 Marriott International Inc: Travel & Tourism Key Facts

Company name & status: Marriott International Inc

Headquarters: USA

Sector involvement (2007): Travel Accommodation

Region involvement (2007): North America, Western Europe, Eastern Europe,Latin America, Asia-Pacific, Australasia, Middle Eastand Africa

Source: Euromonitor International from company reports

Production and Distribution

The adoption of new technologies and the continued focus on global branding are creating a largercommitment to the internet, with Marriott International continuously enhancing its online presence to boostoverall distribution.

In 2008, Marriott International upgraded its Spanish language website by adding a new functionality whichallows Spanish-speaking Marriott customers to compare hotel accommodation in their language. The newfunction allows customers to search for travel accommodation based on their preference of hotel category,or amenity.

BRAND ASSESSMENT

Brand Strategy

Marriott International aims to develop its brands through a focus on global presence and quality, thedelivery of superior customer service with an emphasis on guest satisfaction, its Marriott Rewards loyalty

programme, an information-rich and easy-to-use website, a multi-channel reservation system and theprovision of a variety of amenities, including meeting and banquet facilities, fitness centres, spas,restaurants and high-speed and wireless internet access.


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Along with hotel owners and franchisees, the company continues to invest in its brands through new andrenovated properties, and new room and public area designs, as well as enhanced amenities and technologyofferings.

In order to adapt its brands to the changing conditions of the modern hotels market, Marriott International 'smarketing activity is looking to break through to customers through new media. It has developed special

interactive websites that allow visitors to experience redesigned guest rooms and posts news and brandinnovation on YouTube to reach a broader and younger customer base. Moreover, 2007 saw the company'sCEO, JW Marriott, launch a blog covering topics including immigration reform and the reduction of globalwarming.

Marriott Hotels & Resorts

With 520 hotels worldwide, including around 380 in the US, Marriott Hotels & Resorts is the flagshipbrand of Marriott International Inc. In 2007, it held a global value share of almost 2%. The brand is targetedto what Marriot calls "Achievement Guests", people who are driven to perform whether it is for business orleisure purposes, offering medium- to high-price accommodation.

Through 2007 and into 2008, Marriott International launched adverising campaigns for its Marriott brand.

Focused on business travellers, the advertisements aimed at making a rational and emotional connectionwith guests. The advertisements addressed Marriott International's ability to adjust to distinct cultures whilestill providing a synchronised performance across its brands. Advertisements were featured at airports,targeted television stations such as CNN and select airlines.

This full-service brand is currently transforming its public areas to encourage guests to work and socialisethrough the adoption of the latest design, technology, food and beverage offerings. According to companysources, the new public areas are more open and bright, offer a casual ambiance and a welcomingenvironment for guests.

Marriott Hotels & Resorts brand is set to manage three hotels in Pune, India, which are scheduled to openover the next three years. The hotels, representing 833 new luxury, deluxe and upper-moderate quality guestrooms, underline the brand's key role in Marriott's expansion in major emerging markets.

In 2008, the brand opened its 11th hotel in Beijing under a management agreement with Beijing HuhuaReal Estate Development Co, Ltd. Also in China, the brand is expected to open an enormous, 968-roomhotel as part of the Macao Studio City complex, which is taking shape with entertainment, retail, gamingand studios in Macao.

Courtyard

Courtyard is the second largest Marriott International brand in terms of value sales. With 767 properties,with 693 located in the US and 74 abroad, it is mainly targeted at businesses travellers and operates in themid-scale, full-service segment. Most recently, however, industry experts believe the brand is maturing andfinding it hard to lure customers back.This is explained by a fierce competitive environment, packed withexclusive offers and increasingly modern accommodation, particularly at a time when business travellerswant to cut costs.

After lauching renovated guest rooms with new bedding and pillows, high-speed internet access andergonomic desks in the latter part of the review period, Courtyard enhanced the guest experience in itslobbies, looking to offer more technology, food options and social opportunities.

Coutyard is rapidly developing outside the US, entering new markets such as the Czech Republic, ElSalvador, Japan and Thailand.

In Asia-Pacific, Marriott International added the Courtyard brand to its developing presence in Thailandand Hong Kong in 2008. The 318-room Courtyard by Marriott Hotel Bangkok was Marriott's ninth propertyin Thailand and fourth in Bangkok. The 245-room Courtyard by Marriott Hotel Hong Kong opened under amanagement agreement with Tsinlien Realty Ltd and was its fourth hotel in Hong Kong. This is a majormove made by Marriott International to revitilise the Courtyard brand and benefit from the booming traveland tourism industry in the region.

The brand is also expanding in Latin America to capitalise on the region's growing travel accommodationindustry. In 2007, it opened the 133-room Courtyard by Marriott San Salvador Hotel in El Salvador. Thehotel was the first Courtyard-branded hotel to open in El Salvador and the third to open in Central America,


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Financial Summary

Table 5 Marriott International Inc: Financial Summary 2003-2007

US$ million

2003 2004 2005 2006 2007

Net sales 9,014 10,099 11,550 12,160 -% growth net sales 7.1 12.0 14.3 5.3 -Operating profit 377 477 555 1,011 -% growth operating profit 17.4 26.5 16.3 82.2 -Net profit 502 596 669 608 696% growth net profit 81.2 18.7 12.5 -9.1 14.4Operating margin (%) 4.2 4.7 4.8 8.3 -Net margin (%) 81.2 18.7 12.5 5.0 -Shareholders' equity 3,838 4,081 3,252 2,618 1,429Long-term debt 1,391 836 1,681 1,818 2,790Long-term debt/equity - 1.31 1.55 1.50 -ratio (%)

Earnings per share (US$) - - 1.45 1.41 1.75Number of employees 128,000 133,000 143,000 151,000 300,000Net sales per employee 0.07 0.08 0.08 0.08 -Source: Euromonitor International from company reportsNote: Year end December

Company Background

Summary 2 Marriott International Inc: Historical Development

Year Topic Description

2008 Loyalty Programme Marriott Rewards introduces noblackout dates.

2008 Hotel Development Marriott International set tointroduce a luxury JW Marriottbrand at Danang, Vietnam.

2008 Vacation Ownership Grand Residences by Marriottstarts offering holiday homeoptions in South Lake Tahoe,(California), Panama City Beach(Florida), Lihue (Kauai) andLondon.

2008 Hotel Development Marriott International announcesplans to open hotels in Ecuador,Honduras, Peru, Suriname and

Trinidad & Tobago by 2010.

2008 Hotel Development Marriott International announcesplans to open three moreCourtyard by Marriott hotels inFrance over the next three years.

2008 Loyalty Programme Marriott Rewards namesAeromexico as its new airlinepartner, which allows members toearn Aeromexico Club Premiermiles when they stay at MarriottInternational hotels in 65 countries.

2008 IT Development Marriott International enhances thesearch capability of its Spanish

Language website,www.latinoamerica.marriott.com,


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by adding a new functionality,which allows Spanish-speakingMarriott customers to comparehotel accommodations in theirlanguage. The new function allowscustomers to search for travel

accommodations based on theirpreference of hotel category, oramenity.

2008 Loyalty Programme Marriott International relaunches itsMegaBonus promotion in August,whereby members could earn up to25,000 bonus points when using aVisa card to pay for travelaccommodation.

2008 Hotel Development Marriott International set to openthe seventh luxurious JW Marriotthotel in India by 2009.

2008 Hotel Development Marriott International announces

plans to add 29 hotels to itsMexican portfolio in the next fiveyears.

2008 Other Marriott International launches theGlobal Language Learningprogramme, with 30 new languageofferings to employees.

2008 Hotel Development Marriott International announcesplans to expand its China portfoliowith 18 new hotels through 2012.

2008 Loyalty Program Marriott Rewards starts offeringmembers the possibility to redeem

points for trips on 17 cruise lines.2008 Strategic Agreement Marriott International is expected to

manage nine new properties in theKingdom of Saudi Arabia beginningin 2010.

2008 Hotel Development Marriott International announcesplans to expand its portfolio in theMiddle East from 26 to 65 hotelsthrough 2011.

2008 Hotel Development Marriott International opensCourtyard by Marriott Hong Kong.

2008 Hotel Development Marriott International set to expand

its presence in India with theaddition of three new hotels inKolkata, Chandigarh andHyderabad by 2011.

2008 Hotel Development Marriott International announcesplans to expand its presence inNorway and Sweden with theaddition of six new hotels by 2010.

2008 Hotel Development Marriott International set tointroduce family-friendly, budgetsavvy hotels at Phuket and HuaHin.

2008 Hotel Development Marriott International set to

introduce its deluxe Marriott brandin Thailand with a resort in Phuket.


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2007 Hotel Development Marriott International announcesplans to open 59 hotels in nineAsian markets, including multipleopenings in China, India andThailand, by the end of 2010.

2007 Other Courtyard, Residence Inn, FairfieldInn, TownePlace Suites andSpringHill Suites brands eliminateWi-Fi charges for guests in lobbiesand other public areas in order totarget on-the-go customers andboost efforts to develop multi-functional public interiors.

2007 Advertising Marriott International's extended-stay Residence Inn brand launchesa distinctive new advertisingcampaign to showcase its newInnfusion dcor.

2006 Listings Marriott International announces itis to withdraw its common stockfrom listing on the PacificExchange, Inc., now known asNYSE Arca, Inc., and thePhiladelphia Stock Exchange, Inc.

2006 Hotel Divestment Marriott sells four hotels totalling109 rooms in continental Europe tothe Whitehall Street Global RealEstate Limited Partnership. Inaddition, the Whitehall companyagrees to purchase the 150-roomCourtyard by Marriott Colombes(France) under construction.

2006 Hotel Divestment Marriott International announcesthe sale of its interest in the 50/50joint venture with Whitbread, whichhas 46 hotels consisting of morethan 8,000 rooms. The Royal Bankof Scotland acquires the jointventure in a transaction with a jointventure enterprise.

2005 Hotel Divestments Sale of a portfolio of landunderlying 75 Courtyard by Marriotthotels for US$246 million in cash toCBM Land Joint Venture limitedpartnership.

2004 Hotel Development Ramada International opens 200thhotel in Amsterdam.

2004 Brand Divestment Sells Ramada International brandto Cendant.

2004 Loyalty Programme Marriott Rewards welcomes its20,000,000th member.

2003 Business Divestment Completes sale of Senior LivingService Communities and MarriottDistribution Services.

2003 Hotel Development Courtyard opens 500th hotel inMinneapolis, USA.

2003 Hotel Development SpringHill Suites opens 100th hotelin Texas, USA.


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2002 Hotel Development 2,500th hotel opens.

2002 Business Divestment Announces sale/spin-off of itsSenior Living ServicesCommunities and MarriottDistribution Services.

2002 Hotel Development Opens 500th extended-stay hotel,representing a total of 400Residence Inns and 100TownePlace Suites.

2002 Hotel Development Launches Marriott GrandResidence Club.

2002 Hotel Development Fairfield Inn opens 500th hotel inRogers, Arkansas, USA.

2000 Hotel Development 2,000th Marriott property opens.

2000 Joint venture Forms joint venture with Hyatt andClub Corporation to create thelargest and most comprehensive

electronic procurement network.

1999 Strategic Acquisition Marriott International acquiresExecuStay corporate housingcompany, which subsequentlyacquires Executive Living Inc ofOhio, USA.

1999 Hotel Development Marriott Vacation Club Internationallaunches moderately priced resortsHorizons by Marriott Vacation Cluband luxury resorts The Ritz-CarltonClub.

1998 Hotel Development 1,500th hotel opens.

1998 Other Sodexho Alliance acquires MarriottInternational's foodservice andfacilities-management businesses.

1998 Hotel Development Launches SpringHill Suites brand.

1997 Strategic Acquisition Acquires the Renaissance HotelGroup and introduces TownePlaceSuites, Fairfield Suites and MarriottExecutive Residences brands.

1995 Strategic Acquisition Marriott acquires Ritz-Carlton HotelCompany, LLC.

1993 Other Company splits into MarriottInternational and Host Marriott

Corporation.

1990 Other Pathways to Independence,Marriott's Welfare to Workprogramme, established.

1989 Hotel Development 500th hotel opens in Warsaw,Poland.

1989 Other Marriott Foundation for People withDisabilities established.

1987 Strategic Acquisition Acquires Residence Inn Companyand enters low-mid-price lodgingwith Fairfield Inn.

1985 Other Opens Marriott Distribution Centerin Savage, Maryland, USA.


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1984 New Product Development Enters holiday timeshare andsenior-living accommodation sales.

1983 Hotel Development First Courtyard hotel opens.

1982 Strategic Acquisition Acquires Host International Inc.

1982 Strategic Acquisition Acquires Gino's, which it convertsto Roy Rogers.

1981 Hotel Development Opens 100th hotel in Hawaii.

1979 New Headquarters Builds new corporate headquartersin Bethesda, Maryland.

1976 Theme Parks Established Opens two Great America themeparks in Santa Clara, California,and Gurnee, Illinois, USA.

1975 Hotel Development Opens first European hotel inAmsterdam, Netherlands.

1973 Hotel Development Company obtains first hotelmanagement contracts.

1969 Hotel Development Marriott's first international hotelopens in Acapulco, Mexico.

1967 Corporate Name Change Corporate name changed from HotShoppes Inc to MarriottCorporation.

1967 Company Expansion Marriott opens Fairfield FarmKitchens, a food production andpurchasing facility in BeaverHeights, Maryland, USA.

1967 Other Acquires Camelback Inn, its firstresort property.

1967 Strategic Acquisition Buys Bob's Big Boy Restaurants.

1965 Marriott Foundation Marriott Foundation established.

1957 First Hotel Established Marriott opens first hotel, 365-roomTwin Bridges Motor Hotel inArlington, Virginia.

1955 Other Marriott Food Service gains firstinstitutional and school feedingcontracts at Children's Hospital andAmerican University.

1953 Other Marriott stock becomes public andsells out in two hours.

1945 Food Service Contract Hot Shoppes opens first cafeteriaand gains government foodservicecontract.

1945 Other In-Flite gains first airport terminalfoodservice contract at MiamiInternational Airport.

1939 Other Marriott gains foodservicemanagement contract with USTreasury.

1937 Catering Services Hot Shoppes opens In-FliteCatering division to offer airlinefoodservice to Capital, Eastern andAmerican Airlines.

1934 Other Hot Shoppes expands to Baltimore,USA.


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1929 Other Hot Shoppes Inc officiallyincorporated and introduces curbservice.

1927 Foundation J Willard Marriott and his wife Aliceopen a root beer and hot Mexican

food stand The Hot Shoppe inWashington, USA.

Source: Euromonitor International

Summary 3 Marriott International Inc: Subsidiaries 2007

Company Country

Ritz-Carlton Hotel Co LLC, The Singapore

Marriott Vacation Club International USA


Summary 4 Marriott International Inc: Travel & Tourism Brands 2007

Brand Name Sector and subsector(s)

Courtyard Travel accommodation (Hotels)

Fairfield Inn Travel accommodation (Hotels)

Marriott Travel accommodation (Hotels)

Renaissance Travel accommodation (Hotels)

Residence Inn Travel accommodation (Hotels)

Ritz-Carlton Travel accommodation (Hotels)

SpringHill Suites Travel accommodation (Hotels)


Summary 5 Marriott International Inc: Company Locations

Location Country Activity

North America USA Travel Accommodation

Western Europe France, Germany, UK Travel Accommodation

Asia-Pacific China, Japan, South Korea Travel Accommodation

Latin America Argentina, Brazil, Chile, Venezuela,Peru

Travel Accommodation


Summary 6 Marriott International Inc: Websites

Name Country Website address

Interactive website USA ExperienceMarriott.com

Main corporate website USA marriott.com

Joy-Your Dream Wedding USA www.joyweddingsbymarriott.com

Marriott ExecuStay USA www.execustay.com

Marriott International France marriott.fr

Marriott International China marriott.com.cn


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Marriott International Japan marriott.co.jp

Marriott International South Korea marriott.co.kr

Marriott International Germany marriott.de

Marriott International United Kingdom marriott.co.uk

Marriott International Argentina marriott.com.ar

Marriott International Brazil marriott.com.br

Marriott International Chile marriott.cl

Marriott International Costa Rica marriott.co.cr

Marriott International Dominican Republic marriott.com.do

Marriott International Mexico marriott.com.mx

Marriott International Peru marriott.com.pe

Marriott International Venezuela marriott.co.ve

Marriott Vacation Club USA www.vacationclub.com

The Ritz-Carlton USA www.ritzcarlton.com

The Ritz-Carlton Club USA www.ritzcarltonclub.com


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