Marriott International Vs Hilton Worldwide

As an employee of Marriott International, this assignment gives us the opportunity, to compare the company I work for to our competitor Hilton Worldwide. Both companies are the largest ever in the hospitality industry around the world, and both are growing faster than ever.
Company’s history
The Marriott was founded in 1927. All began with an A&W root beer stand a family owned business in Washington, D.C. Founder J.Willard and his wife Alice, got their young business by quenching people’s thirst during Washington DC‘s hot, muggy summers. Then The Marriotts add hot food items to their menu and the name “Hot Shoppes was born (International, 2014). Today, with his headquarter based in Bethesda, Md., Marriott operates more than 4,087 properties in over 80 countries and territories around the world, over 697,000 rooms under 16 brands including Courtyard, Renaissance and Ritz-Carlton; more than 800 new Marriott-operated properties are in the works worldwide. Founded by J. Willard Marriott, the company is now led by President and Chief Executive Officer Arne Sorenson and J. Willard Marriott's son, J. W. Marriott, Jr. is the Executive Chairman.
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1111119 Hilton International began around 1919, when Conrad Hilton bought The Mobley, a hotel in Cisco, Texas. Mr. Hilton had greater ambitions, over the next few years; he added other Texas hotels in his assets. In 1943, with the purchase of the Roosevelt and Plaza hotels in New York City, Hilton became the first coast-to-coast hotel group in the United States (Worlwide, 2014). Hilton International operated as a separate company, with Conrad Hilton as president. Two years later, Conrad Hilton's son Barron succeeds him as president of the domestic Hilton Hotels Corporation. In 1954, Conrad N. Hilton bought Statler Hotel for $111 million dollars, which at that time was the largest real estate deal ever. Today, Hilton brands encompass 4,112 hotels with over 680,117 rooms in 91 countries. Hilton was ranked as the 38th largest private company in the United States by Forbes (The Largest Private Companies"., 2010). On December 12, 2013 Hilton again became a public company in its second IPO to raise an estimated $2.35 billion.

Services /product
As you can see, both companies own, manage or franchise a huge portfolio of brands, and both offer the same service.In order to capture every opportunity in the market, Marriott international and Hilton worldwide operate hotels and other related services in accommodation like restaurant, gambling and entertainment areas. Both corporations (Marriott International and Hilton International) offer mainly accommodation services through their hotels, resorts, apartment hotels etc. Most of the revenue is generated through selling hotel rooms to customers. There are also a range of other services and products that contribute to the level of revenue such as restaurants, bars, gift shops, spa, laundry services, travel desk, business center, banquet service /halls.
Major customers
In this hospitality industry, the major customers include tourists as well as business travelers
For both companies, the major customers are those who stay in the hotel rooms for a specific period of time. So, Housekeeping or rooms divisions are those bring most of the revenues.
Major suppliers and leadership
.For their operation, both companies contract with many suppliers of products and services in this area: Food & Beverage (F&B), Guest Rooms and Public Space, and Property Operations. For food and beverage, Marriott International and Hilton international work with food and beverage manufacturers to provide consumable products such as dairy, bakery, produce, meat, poultry, seafood, grocery, and alcoholic beverages. Also, equipment such as china, glassware, flatware, linen, ovens, and dishwashers. For guest Rooms and Public Spaces, they work with suppliers who provide products and services for everything a property needs, from guest rooms to public spaces, as well as items for ongoing operations. These items include linens, terry, amenities, hair dryers, uniforms, toiletries, and housekeeping supplies.

To keep their operation’s hotels running smoothly, Marriott and Hilton have their Executive Committee with diverse backgrounds to keep each one at the forefront of the hospitality industry. For Marriott International, for longtime J.W. Marriott, Jr.was the Executive Chairman and Chairman of the Board, but today, the company is now led byArne M. Sorenson as President and Chief Executive Officer. Below are other member of the Executive Committee :

Carl T. Berquist, Executive Vice President and Chief Financial Officer
Anthony G. Capuano, Executive Vice President and Global Chief Development Officer

Simon F. Cooper, President and Managing Director, Asia Pacific

David J. Grissen, Group President

Ronald T. ("Ron") Harrison, Global Officer, Architecture and Construction

Bruce Hoffmeister, Global Chief Information Officer

Herve Humler, President and Chief Operations Officer, The Ritz-Carlton Hotel Company, L.L.C.

Alex Kyriakidis, President and Managing Director, Middle East & Africa

Stephanie Linnartz, Executive Vice President and Chief Marketing and Commercial Officer

Kathleen Matthews, Executive Vice President and Chief Communications and
Public Affairs Officer

Amy C. McPherson, President and Managing Director, Europe

David A. Rodriguez, Executive Vice President and Chief Human Resources Officer

Edward A. Ryan, Executive Vice President and General Counsel

For Hilton International, the member of Executive Committee are :
Christopher J. Nassetta as President & Chief Executive Officer
Kathryn Beiser as Executive Vice President, Corporate Communications
Joe Berger as Executive Vice President & President, Americas
Kristin Campbell as Executive Vice President & General Counsel
Ian R. Carter as President, Development, Architecture and Construction
Jeff Diskin as Executive Vice President, Commercial Services
Jim Holthouser as Executive Vice President, Global Brands
Kevin Jacobs as Executive Vice President & Chief Financial Officer
Matt Richardson as Head of Architecture, Design & Construction
Martin Rinck as Executive Vice President & President, Asia Pacific
Matthew W. Schuyler as Executive Vice President & Chief Human Resources Officer
Simon Vincent as Executive Vice President & President, Europe, Middle East & Africa
Mark Wang as Executive Vice President, Global Sales & President, Hilton Grand Vacations

Stock Price For Marriott International Corporation issued stock in 1953 at $10.25 per share.
1. The day of its initial public offering (IPO) $10.25
2. January 1, 2012 MAR $30.00
3. January 1, 2011 MAR $39.5759
4. January 1, 2010 MAR $ 26.0415 For Hilton International
Hilton Worldwide shares began trading on the New York Stock Exchange on Thursday, December 12, 2013 under the ticker symbol "HLT.'' And Hilton Prices Its I.P.O. at $20 a Share. (Merced, By Michael J. de la, 2011)

1. The day of its initial public offering (IPO) $20.00
2. January 1, 2012 MAR $0
3. January 1, 2011 MAR $0
4. January 1, 2010 MAR $0

Dates Marriott Inter Hilton initial public offering (IPO) 10.25 20
January 1, 2010 26.0415
January 1, 2011 39.5759
January 1, 2012 30.00

By tracking the stock price for both companies since January 2014, it seems to me that Marriott International has the greatest stock price growth. For example, as on September 15, 2014 Marriott stock was traded $70.71 whereas Hilton International was $24.65.

News Events

Marriott
For Marriott International, on October 4, 2013, Marriott international acquired a North American Full-Service managed property which we plan to renovate for a total of $115 million in cash and recognized the related property and equipment. Also, in the 2013 Marriott entered into a definitive agreement with Protea Hospitality Holdings ("Protea Hospitality") of Cape Town, South Africa to acquire Protea Hotels' brands and hotel management business for approximately $186 million. As part of the transaction, Protea Hospitality will enter into long-term management and lease agreements with Marriott for these hotels. Marriott is expecting to add over 100 hotels (over 10,000 rooms) across three brands in South Africa and six other Sub- Saharan African countries to their International full-service portfolio.

On January 19, 2010, several former Marriott employees (the "plaintiffs") filed a putative class action complaint against Marriott International (the "defendants"), alleging that certain equity awards of deferred bonus stock granted to the plaintiffs and other current and former employees for fiscal years 1963 through 1989 are subject to vesting requirements under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), that are in certain circumstances more rapid than those set forth in the awards. The plaintiffs seek damages, class attorneys' fees and interest, with no amounts specified. The action is proceeding in the United States District Court for the District of Maryland (Greenbelt Division) and Dennis Walter Bond Sr. and Michael P. Steigman are the current named plaintiffs. The parties completed limited discovery concerning Marriott's defense of statute of limitations with respect to Mr. Bond and Mr. Steigman and completed discovery concerning class certification. Hilton International
In August 2011, Hilton purchased the remaining 50 percent ownership interest in Oakbrook Suites and Garden Inn, LLC (“Oakbrook LLC”), which owned the Hilton Suites Oakbrook and the Hilton Garden Inn Oakbrook Terrace, for a cash payment of $12 million. Also, In January 2011, Hilton completed the sale of their former corporate headquarters office building in Beverly Hills, California for approximately $65 million and recognized a pre-tax gain of $16 million that was included in other gain.

Financial Analysis – Horizontal/Trend
Company 1: Marriott International in millions
Financial Statement Account 2013 2012 Change
($) Change
(%)
Balance Sheet Total current assets 1,903 1,475 428 29.01%
Balance Sheet Total current liabilities 2,675 2,773 (98) (3.53%)
Balance Sheet Property and equipment 1,543 1,539 4 0.26%
Income Statement Total Revenue 12,784 11,814 970 8.21%
Income Statement Net Income 626 571 55 9.63%
Retained Earnings Ending Retained Earnings 3,837 3,509 328 9.34%
Retained Earnings Dividends 195 158 37 23.41%

The two-year condensed balance sheet of Marriott International shows in assets section, an increase on current assets of $428, or 29.1%. In the liabilities section, current liabilities decreased $98 or 3.53%. In the stockholders’ equity section, retained earnings increased
$328 or 9.34%. So, overall, gross profit and net income were up. The Changes suggest that Marriott international expanded its asset and paid his debts.

Company 2: Hilton Worldwide in millions

Financial Statement Account 2013 2012 Change
($) Change
(%)
Balance Sheet Total current assets 2,383 2,827 (444) (15.70%)
Balance Sheet Total current liabilities 2,142 2,349 (207) (8.81%)
Balance Sheet Property and equipment, net 9,058 9,197 (139) (1.51%)
Income Statement Total revenues 9,735 9,276 459 4.95%
Income Statement Net Income 460 359 101 28.13%
Retained Earnings Ending Retained Earnings (5,331) (5,746) (415) (7.22%)
Retained Earnings Dividends 4 4 0 0%

The two-year condensed balance sheet of Hilton International shows in assets section, adecreasee on current assets of $444, or 15%. In the liabilities section, current liabilities decreased $207 or 8.81%. In the stockholders’ equity section, retained earnings decreased $415 or 7.22%. So, overall, net incomes were up.

Financial Analysis – Ratio Analysis
Ratio Company 1 Marriott: Company 2 Hilton : Analysis
Current Ratio
(=current assets / current liabilities) 1,903/2,675=0.711 2,383/2,142=1.11 Inventory Turnover
(= Cost of Goods Sold / average inventory) N/A
Profit Margin
(=net income / net sales) 626/12,784 =0.049 460/9,735=0.047
Debt to Total Assets Ratio
(=total debt / total assets) 8,209/6,794=1.20 6,794/26,562=0.255

The current ratio which gives an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables) shows that Hilton Hotels is better off paying its obligations. Marriott international with a ratio under 1 suggests that the it would be unable to pay off its obligations if they came due at that point.
For every dollar of sales Marriott actually keeps $ 0.049 whereas Hilton keeps $ 0.047 in earning.
I will recommend Marriott international. Although Marriott have a high debt, that not really shows that company is not in good financial health, it does not necessarily mean it will go bankrupt.

Conclusions and Recommendations

Marriott and Hilton are worldwide operator, franchisor, and licensor of hotels and timeshare properties around the world. Marriott 16 brands operate under more than 16 brands, but Hilton has less. This means that Marriott have a large portfolio than Hilton. As we look on their financial statements Marriott International Revenues increased by $970 million (8 percent) to $12,784 million in 2013 , but Hilton international 4.95%.I think Marriott will be the company I consider as the better investment for your any savvy investor .

Question 7: References
International, M. (2014). 2013 Annual Report. Marriott.
Merced, By Michael J. de la. (2011). New York Time.
The Largest Private Companies". (2010). The Largest Private Companies". Forbes.com. 2010. Retrieved 2010-11-11.
Worlwide, H. (2014). 2013 Annual Report. Hilton.