Business Analysis Part 1 Marriott International, Incorporated is a leader in the global hospitality industry with more than 3,500 properties and the broadest portfolio of brands in the industry. Since the beginning of its existence, “Marriott has firmly established a culture and a tradition of innovation, service and leading performance” (Marriott Website). I chose to conduct a business analysis of this company because one of my interests is managing a prestigious international hotel and resort. After conducting a research about Marriott, I learned the strengths, weaknesses, opportunities, and threats (SWOT) analysis about the company. Their strengths are on technical innovations, higher brand recognition and recall, and global presence, and strong brand portfolio.
The current locations are great to make this move as they reside by the airport and will target the business travellers. GR already utilizes Central and On-line bookings which again will target business travellers as they tend to use this service the most. Business travellers are moving towards staying at up-scale hotels and this move will definitely increase occupancy rates of
Marriott Cost of Capital Case Study Company Profile The Marriott Corporation is a global real estate conglomerate with more than 3,400 properties in 70 countries and territories. It successfully manages three major business divisions: lodging, restaurants, and contract services. The overall objective of the company is to remain the leading provider in the hospitality industry by having a competitive advantage over its competitors through innovation and state of the art customer service. To successfully achieve its business objectives and reach significant financial growth, the company’s corporate initiative focuses on four components of its financial strategy: (1) manage rather than own assets, (2) invest in projects that increase shareholder value, (3) optimize the use of debt in the capital structure, and (4) repurchase undervalued shares. Cost of Capital The objective of this case study is to demonstrate the use of the economic theory of asset pricing (CAPM) and the cost of financial capital (WACC) to determine how it can be used in the firm to estimate the required return for real investments based off of company specific data.
The following is a case study discussing the pros and cons of Rosewood hotels moving from individual brands to a corporate brand. Concepts included will be the customer lifetime value calculator, as well as a variety of elements such as differentiation, operational issues and brand management. Furthermore, included is an exploration of how one assumption may affect results in regards to lifetime value calculation. Relationship Marketing Rosewood Hotel Management Company has found themselves in a unique situation that many companies often find themselves in after years of success in the industry. Although they have brands that carry their own weight, they also now have a decision to make regarding consolidating dynamic individual well-established brands into an umbrella that is essentially a corporate brand.
Feasibility of the project was also supported by an upturn in residential property market. The entrepreneurial endeavors in this case were deeper than the financial incentives, Ross was quoted that this was perhaps the last site that have “grand potential....., building’s that would define New York City.” With a 2.1 million sf. Of buildable FAR, the center would have more usable space than the Empire State Building. SRD relied heavily on its Joint Venture with Apollo Real Estate Advisors. Apollo would provide inflows of $255M in equity.
Marriott Corporation What is the cost of capital for the lodging and restaurant divisions of Marriott? What risk-free rate and risk premium did you use to calculate the cost of equity for each division? How did you measure the cost of debt for each division? …the beta for each division? Approach Before we calculate the cost of capital for the lodging and restaurant divisions of Marriott, we will first determine the cost of debt by using the weighted average cost equation the cost of equity using the cost of capital model (CAPM), and beta by implementing the Hamada equation for each division.
It is important to distinguish the target customer for both ByRequest members and nonmembers. Wyndham’s overall customer targets were, “business and leisure travelers in the upscale and high-upscale segments of the market” (Pg. 1) The ByRequest target customer was the business traveler who, “on average, takes 12-14 trips a year” (Pg. 13). Therefore, while Wyndham and ByRequest both targeted the upscale business traveler, ByRequest specifically included only those business travelers with high frequency of travel.
Present recommendations for hurdle rates of Marriott's different divisions to select by discounting appropriate cash flows by the appropriate hurdle rate for each division Recommendation: Given the policies and strategies related with hurdle rates and cost of capital, Marriot Corporation should follow their target debt/value structure because it will minimize their weighted average cost of capital. Analysis: Marriot Corporation is a 1927 US-based company specialized in the hotel management industry. Its operations and product line have expanded substantially in the last few decades and the management team intend to remain a premier growth company. As a consequence, - (to keep on growing it will need to invest in new projects with positive NPVs) Company Background Marriott Corporation, one of the largest US corporations in hotel management and other support services (restaurants, contracts) has an objective to remain a premier growth company. In fact, their business goals consist of keeping a significant growth pace by setting consistent business strategies and developing appropriate investment opportunities in their different business divisions.
Two European Hotel Groups: Equity Analysis Table of Contents Introduction ........................................................................................................................................... 3 Business Description ......................................................................................................................... 4 Industry Analysis ................................................................................................................................. 5 Current State of the Hospitality Industry ....................................................................... 5 Future of the Hospitality Industry ..................................................................................... 5 Financial Results in 2005 ................................................................................................................. 6 International Financial Reporting Standards ............................................................... 6 Accord ............................................................................................................................................ 7 NH Hotels ..................................................................................................................................... 8 Financial Analysis & Valuation ................................................................................................... 10 Price Earnings & Market to Book Ratios ....................................................................... 10 Return on Equity
The Bentley was built in 1985 by a consortium of local investors. It was sold in 1996 to a partnership of government and union pension funds which owns several hotels in major cities. The owners contracted with HHH Associates, a large hotel management company, to provide key management services for their hotels. HHH provides some human resource, marketing, and accounting services, and centralized purchasing for high-volume items. In addition, Hotel Manager Antonia Posada and Director of Rooms (the second-ranking executive) Cash LaPoudre are HHH employees.