Hotel Brand Segments Market Segment Marriott International Hilton Worldwide InterContinental Hotel Group Luxury JW Marriott Conrad Intercontinental Hotels Upscale Marriott Hotel Hilton Hotel Crown Plaza Upper Moderate Courtyard Hotel Hilton Garden Inn Holiday Inn Moderate Fairfield Inn & Suites Hampton Inn Holiday Inn Express Economic The economy is another environmental variable that can affect Marriott’s sales. There are varieties of economic reports put out by government and non-government organizations (NGO) that measure the economy’s performance. Three of the economic measures put out by the U.S. government are Gross Domestic Product, Disposable Income, and Unemployment Rate. In addition, the University of Michigan also put out a Consumer Sentiment Index to measure the economy by polling consumers. The U.S. Government defines Gross Domestic Product (GDP) as the market value of final goods and services produced in the United States. During the U.S. Financial Crisis of and resulting Great Recession of 2009, the U.S. GDP declined to a low of -2.08% in 2009. In the same year (2009), Marriott’s net income fell to -$346 million. The chart below shows a correlation of .93 between these two events. This indicated there is a statically significant correlation between the GDP and Marriott’s net income. 2008
Government legislations such as tax laws can also present challenges to hotels operating within the environment. In Lagos, Nigeria, a state where Marriott operates a number of its brands, The Hotel Occupancy and Restaurant Consumption Law 2009 which imposes a 5% tax on consumption of goods and services in hotels, hotel facilities, event centers and restaurants within the state, was passed into law . This law passed by the Nigerian Supreme Court in July 2013 - after about 4 years of litigation (The Supreme Court Judgment on Hotel Licensing and Regulation, 2013). The impact of this judgment however was that since the law had been gazette since 2009, hotels and other stakeholders, had to remit consumption tax whether charged or not charged to the tax authority from as far back as 2009. This development will have a telling effect on the bottom line of the hotels accounts especially for hotels that didn’t charge customers the consumption tax in the period under review. Economic Trends Marriott hotel is affected by the Global economy as well as the individual economies of countries in which it operates. Economic downturn in Europe, weak economic conditions in Africa and other parts of the world as well as economic disruptions in the US due to government actions affect the demand for the company’s services. The Marriott Annual Report (2013) cites the negative effect of the U.S. federal spending cuts and limitations on its business. This is due to US governmental travel being a significant part of the Marriott’s business. Employment levels and income also affect demand for hotel business. Walls and Freitag (2012), stated that upper priced hotels, such as Marriott, Hilton etc are more reliant on corporate bookings and are therefore more closely linked to movement in corporate incomes and profits than lower priced hotel brands which are more reliant in populations with high levels of employment and income.