Qualitative Analysis
Risks and Catalysts
Marriott Corporation was performing well during the year 2015 as its earnings growth had increased by 3% during the fourth quarter. But in the year 2016, the CEO of the Marriott Corporation Anne Sorenson had identified some threats and risks which could harm its earnings and also may well damage the reputation. The risks which may hurt its earnings are given below:
• Slow Economic growth of U.S
• Terrorism and political disputes
• Highly Competitive Industry
One of the biggest threats and risks which may cause the earnings of the Marriott Corporation to decline is the slowing economic growth in the US. The overall properties of Marriott Corporation in the U.S arearound 4,500 and have nearly 800,000 rooms. Most of the guests of Marriott Corporation are the north Americans. The economic growth increased by 1.2% in the second quarter of 2016, started to impact on the Marriott Corporation. If the economic growth goes on a decline or keeps at a slow pace, then the business travel would fall and would lead to a declinein the customers of Marriott Corporation. Most of the guestswhowerestaying in the Marriott hotels were travelers and came for business purpose in the U.S. If the economy of the U.S declines than this would impact the performance of all the businesses and will reduce the traveling of those travelers which would further impact on the Marriot Corporation earnings and performance.
Marriott International Inc Harvard Case Solution & Analysis
Another of the risks for the Marriott Corporation is the terrorism and political disputes. Most of the travelers before visiting a country would evaluate the safety andsecurity conditions. Most of the Marriott Corporation hotels are established in many regions such as inEurope, Asia, and others. The violence in France and Turkey had caused negative impacts on Marriott corporation’s earnings. The recent elections in U.S had also caused a various number of political disputes in the country leading to less traveling of people in the U.S. If the terrorism and political disputes keep on increasing, then this will lead to negative impact on traveling and would hurt Marriot’sinternational growth.
The. Hotel industry is a highly competitive market in which many new establishments are able to enter the market easily. There are several factors which cause the hotels to show differentiation to the customers and be on top of the industry, such as the loyalty of the customers, improvement on technology for customer’s ease and providing quality, value and efficiency on the lodging services. Marriott Corporation holds a strong position in the market due to the customer loyalty and its investments in technology. There is a high risk that its competitors such as Accor, Intercontinental could capture the market and will cause the earnings, operations margin and market share to decrease.
Situation and Industry Analysis
The industry analysis and situation of the Hotel market is significantly booming in the year 2017 despite the slow economic growth and political uncertainties in the U.S. The travelers and guests of the Hotels are looking for hotels which provide unique experience and services, as well as hoteliers are diversifying their portfolios by investing in improving the technology of the hotels, launching of loyalty programs and creating attractive venues to bring in more customers. The supply and demand in the hotel industry are booming since the year 2010 whereas the demand is outpacing supply. The hoteliers are also expanding their businesses by opening their hotels abroad especially in places where there is high traveling of people. The hoteliers have also started to use social media such as Facebook, TripAdvisor and Twitter to promote their hotels and are developing apps for providing the guest for booking and offering GPS maps for offering them a unique experience...................
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