Introduction
Marriott is one of the world’s most successful and established hotel chains, maintaining a reputation for excellence over the years. However, the problems associated with COVID-19, which have affected the entire global economy, have also affected Marriott’s revenue (Pandemic’s impact, 2023). In addition, with the development of alternatives to the hotel business, Marriott is forced to strengthen its competitiveness while coping with the economic problems resulting in a significant drop in hotel demand. Given all the past crises that have impacted Marriott and have taken an average of 4 years to recover from, the business hopes to recover sooner (Pandemic’s impact, 2023). To assess these opportunities, Marriott needs to understand how COVID-19 has impacted its financial performance. Therefore, it is necessary to study Marriott’s economic changes under the influence of the epidemic and make appropriate recommendations.
Liquidity
The current liquidity ratio measures a company’s ability to service its debt. Marriott’s current percentage has been slowly increasing from 2019 to 2021, showing that the business is improving its position (Marriott Net Profit, n.d.). Despite the pandemic announced in 2020, the business was able to maintain and increase its debt capacity, making a significant breakthrough in 2021 while still being more than 50% behind the industry average.
Asset Management
The coefficient is used to assess the effectiveness of the organization’s use of working capital and to analyze the company’s business activity. As one can see from the table, in 2020, Marriot experienced a significant decline in revenue generation, but in 2021, the company used its assets to produce better income(Marriott International Inc., n.d.). The company reacts quickly to a crisis and does not hesitate to sell; therefore, it tends to recover soon, exceeding even the average value of the industry, which is still recovering from the crisis.
Debt Management
The higher the debt-to-equity ratio, the more likely funding comes from debt accumulation. While this is sometimes good, it indicates a higher financial risk. As can be seen from the table, from 2019 to 2020, the company was close to the risk, but in 2021, it successfully reduced it, although it was still higher than the industry average.
Profitability Management
Marriott’s net profit margin decreased between 2019 and 2020 (Marriott International Inc., n.d.). A negative reading in 2020 indicates that the business’s operating performance was heavily affected by the pandemic, hurting profits. However, the company managed to return to a positive figure in 2021 and to the previous figure again, with a slight increase approaching the industry average.
Market Value
Market value allows one to assess the size of a business; the higher the value, the more significant and stable the company. As is seen from the table, Marriott is a reasonably large business. It can be seen that in 2020, as a result of the pandemic, the company’s value decreased, but already in 2021, the company was able not only to restore its position but also improve its performance from previous years.
Recommendations
The Marriott hotel chain has a stable business that can cope with crises. Although the company is recovering well from the COVID-19 pandemic, the business can accelerate this process by offering innovative new services. Through practical market analysis and sustainability, Marriott can improve its services with innovation. Thus, a company should rely on consumer feedback and use this information to enhance existing services or create new ones.
References
Marriott International Inc (MAR) stock price, trades & news. (n.d.). Web.
Marriott Net Profit Margin 2010-2023 (N.d.). Web.
Pandemic’s impact on Marriott International: A financial statement analysis case. (2023).