Ramjas Consulting Society
Probation
Task 4
Guidelines
The deadline for the submission of your solution is 2nd
December, 2024, 11:59 PM.
All submissions are to be submitted via Google Form.
Only one member from each team is supposed to fill
the form. Solution received post the deadline will not be
considered for evaluation.
Teams must prepare a presentation, not exceeding 5
slides, excluding the Introduction and Appendix. For
team details refer to sheet.
The document should include team name, name and
RCS emails of each member.
The solution should be submitted in a PDF format. The
naming convention should strictly be as follows
<TeamName_ProbationTask4>. (ex, A_ProbationTask4)
The case solutions will be judged on the basis of
creativity, research, feasibility, rationale, depth and
clarity of the problem.
Co-ordination among the team members throughout the
task will be assessed strictly.
Plagiarism will put you out of consideration for the
probation task.
Overview
In 2016, Marriott International completed its acquisition of
Starwood Hotels & Resorts for $13.6 billion, creating the
world’s largest hotel company. The merger brought
together 30 leading hospitality brands, expanding Marriott’s
portfolio across a wide spectrum of market segments, from
economy to ultra-luxury. This strategic move was designed
to enhance Marriott’s global presence, leverage operational
efficiencies, and tap into growing hospitality markets.
Scenario (pre acquisition- 2016)
Marriott
Marriott International, founded in 1927, was a global leader
in the hospitality industry by 2016, known for its diverse
portfolio of brands ranging from economy to luxury
segments. Headquartered in Bethesda, Maryland, Marriott
operated more than 4,400 properties in 87 countries and
territories. The company’s strengths lay in its asset-light
business model, industry-leading loyalty program (Marriott
Rewards), and consistent financial performance. Before the
Starwood acquisition, Marriott was recognized for its
dominance in North America and its growing international
presence.
Starwood
Starwood Hotels & Resorts, established in 1980, was a
pioneer in the hospitality industry, recognized for its
innovative and distinctive brands such as Sheraton, Westin,
W Hotels, and St. Regis. Operating nearly 1,300 properties
across 100 countries, Starwood was known for its strong
presence in luxury and upscale segments. The company also
gained immense loyalty through its Starwood Preferred
Guest (SPG) program, which was widely regarded as a gold
standard in hotel rewards. However, by 2016, Starwood
faced operational challenges and slower growth in North
America, making the merger with Marriott a strategic
opportunity.
Scenario (post acquisition- 2016)
Portfolio Expansion
Scale
The merger created the world’s largest hotel company,
with over 5,700 properties and 1.1 million rooms spread
across 110+ countries.
Post-acquisition, Marriott’s development pipeline
expanded significantly, including ongoing projects in
high-growth regions.
Global Reach
Asia-Pacific and the Middle East/Africa: Marriott’s
footprint in these regions doubled, fueled by Starwood’s
established presence, particularly in luxury and premium
segments.
Europe: Starwood’s stronghold added depth to
Marriott’s portfolio, increasing its competitiveness in
European markets.
Marriott gained exposure to emerging markets,
particularly in China, India, and Southeast Asia, where
hospitality demand was on the rise.
A global map showing the spread of Marriott International, highlighting its extensive
presence worldwide. The United States leads with approximately 5,500 hotels,
followed by China with 500 hotels, Canada with 260, and India with around 150 hotels.
Brand Diversity
Starwood’s iconic brands—Sheraton, Westin, W Hotels,
St. Regis, and The Luxury Collection—brought a focus on
luxury and lifestyle offerings, elevating Marriott’s
standing in these segments.
Complementing Marriott's brands, such as Courtyard,
The Ritz-Carlton, and Marriott Hotels, Starwood’s
portfolio provided access to new customer bases and
niche markets, including millennial-focused lifestyle and
boutique experiences.
Current Scenario (2024)
As of 2024, Marriott International, despite its strong global
position, faces several challenges that impact its operations
and growth trajectory. The company operates more than
9,000 properties across 140+ countries and territories,
offering over 1.7 million rooms.
Although the Starwood acquisition in 2016 provided
significant growth in brand portfolio and global reach, the
integration of Starwood’s brands into Marriott’s operations
has presented ongoing challenges. These include:
Brand differentiation: Ensuring each of the 30+ brands
under Marriott’s umbrella maintains its unique appeal
while aligning with Marriott’s overarching strategy.
Marriott has had to focus on differentiating brands not
only in terms of consumer appeal but also in terms of
pricing, guest experience, and service standards.
Cultural integration: Integrating Starwood's
operational structures, leadership teams, and internal
communication processes into Marriott’s more
centralized approach was a time-consuming process that
required careful attention to leadership styles,
employee engagement, and decision-making practices.
Technology and Loyalty Program Integration: One of
the most critical and complex elements of the merger
was the integration of Marriott Rewards and Starwood
Preferred Guest (SPG), two of the most prominent
loyalty programs in the hospitality industry.
Brand Performance and Portfolio Management
While some luxury brands have seen strong
performance, other midscale and economy brands have
faced slower growth due to intense competition and
changing market demands.
Refer to the exhibit given ahead.
Rising Labor and Operational Costs
Marriott, like many hospitality companies, faces
challenges related to rising labor costs and inflationary
pressures.
Keeping this in mind, Marriott International informed
employees this week about a widespread restructuring.
The company had recently said it had about 5,000
workers associated with the HQ, which would imply a
16% workforce reduction.
Additionally they also informed the Maryland
Department of Labor, a govt. agency in the US, about a
mass layoff of 833 employees by the Q1, 2025.
Management said that it was targeting $80 to $90
million a year in cost savings as part of a restructuring
initiative involving one-time costs focused on achieving
enterprise-wide effectiveness to support future growth.
Exhibit - A comparison of some selected Marriott and Starwood brands in 2016 and 2024-
*RevPAR (Revenue per available room): Revenue generated by each available room on your property.
*ADR (Average Daily Rate): Average rental revenue earned for an occupied room per day.
Problem Statement
Now that Marriott International has doubled in size
over a decade, it saw an opportunity to rethink its
organization and restructure for efficiency. You
have been hired as a consultant to give
recommendations to Marriott on the following
problems:
Brand re-positioning strategy - mapping use
cases, segmentation, and marketing for each of
the 30 brands - so that Marriott leverages its
global footprint to ensure stability by FY 2026.
Corporate development strategy - ensuring
diversification and dealing with the merged
entity's non-performing assets.
Human capital transformation - to make each
of the brand's hotels profitable at a unit
economics level and sustainable given the
RevPAR & ADR.
All the best!
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