Background
Marriott International have, from their founding in 1927, grown from a small local food and beverage company to become an increasingly successful, world-leading, hospitality company.
Marriot International Incorporated was formalised in 1993 and, at this time, Marriott Corporation split into two separate companies.
The new corporate structure established Marriott International to franchise and manage properties. This provided income from relationships within the operational hospitality sector.
The other company was Host Marriott Corporation, latterly known as Host Hotels and Resorts, and became responsible for the ownership of properties.
Business Development
The years following the corporate restructuring in 1993 were extremely active and successful years for the newly established Marriott group.
Group revenue in 1993 of just over $8 billion had increased to over $22 billion by 2022.
This growth was represented by acquisitions associated with other hospitality companies, e.g. The Ritz-Carlton Hotel Company, Renaissance Hotels and Ramada Hotels.
Concurrent with this dynamic corporate activity, Marriott International formed worldwide agreements to manage hotels on behalf of owners of hotel properties. The agreement between Marriott and the Lim Company was a typical example of such an agreement.
Reputation
Such successful management agreements contributed extensively to the increasing revenues of the Marriott group.
Marriott International became a byword for quality and sophistication amongst the hospitality sector.
Management agreements with owners of hotel properties were extensive and worldwide.
Marriott consistently displayed the ability to take such management agreements and create world renowned, distinctive destinations.
At the same time Marriott strived to maintain a first-class operational reputation. They were able to ensure their locations were rated, reviewed and acknowledged at a world-renowned level.
Partners
With a sophisticated range of management agreements, top quality reviews and an enviable reputation, hospitality industry leaders like Marriott must pay close attention to some essential areas of their operations.
Their management agreements need to ensure that trust, integrity and good practice are a constant, recurring feature of such partnerships.
To be able to operate any hospitality facility successfully, requires the operator to form agreements, liaisons and partnerships with an extensive range of suppliers, sub-contractors, specialists, partners and franchisees.
To ensure any location is recognized for the world class reputation associated with Marriott, a substantial number of differing partners must work alongside Marriott to achieve this.
Such agreements have to work creatively and, more importantly, successfully.
They are often long-term relationships and the key to the success of any of any relationship in the hospitality sector is trust and integrity.
For an extensive period, Marriott achieved great success in their international and local relationships, and this was reflected the success of the group and its increasing revenue.
Challenges
Despite the successes and achievements of Marriott International, issues such as the Marriott criminal investigation are potentially very problematic for the company.
Being able to develop the financial and operational success of Marriott, will undoubtedly be affected by the fact that Marriott are implicated alongside unfair or unreasonable business methods.
The initial disagreement between Marriott and Lim has progressed to include matters of financial impropriety, financial record keeping, breaches of information and breaches of contractual agreements.
The necessity to continue to form and make agreements with partners, particularly in the hospitality sector is reliant on the good standing and reputation of Marriott International.
Facing the reality that the reputation of Marriott is being viewed negatively, business practices are being viewed with suspicion is of great concern to the company and especially its partners.
That matters have even reached government level of attention in Poland only exacerbates this concern.
Effects
A market leading company such as Marriott is heavily reliant on its relationship with its partners.
The ability to extend and develop existing partnerships is intrinsic to the success of Marriott International. Any negative issues, especially legal matters, will certainly make it much more difficult for Marriott to maintain relationships with their operational partners.
Equally, in developing new locations and styles, new partners will always be necessary.
The ability to forge these vital, new relationships will also be affected by implication of unreasonableness and poor corporate financial practice.
Any new or existing partner cannot help but be influenced by these accusations. It will reflect a lack of confidence in becoming an operational partner of Marriott.
Summary
Corporate reputation, improved financial returns and results, clients, quality and glowing reviews are all essential markers of success for a hospitality company.
Notwithstanding that, the requirement to successfully build partnerships that ensure operational standards are maintained at the highest level will always be the foundation that success in the hospitality sector is built on.
For that success to be jeopardized by recent conflicts and disagreements is a major concern for partners of Marriott International.
Any lack of confidence, concern regarding financial integrity and malpractice must therefore also be a significant concern for Marriott International.
