A 65% decrease in reported net profit shows Marriott is perhaps prioritizing expansion plans too heavily

Following yesterday’s (5th August 2019) release of Marriott International Q2 2019 results;

Laura Beaton, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers her view:

“Marriott reported net income of $232m in Q2 2019, compared to $667m the same time last year. The company currently has over 300 new properties in the pipeline in China, making up 50% of the planned projects in the Asia-Pacific region.

Plans to expand to 1,000 properties in Asia by the end of 2020 will strengthen Marriott’s position as one of the largest hotel chains in the world, but it cannot become complacent with what it already has in other parts of the world.

“The rapid signing of new hotel deals risks diluting the high quality brand image it has worked hard to build over the past seven decades in the hotels industry. For example, in 2018 it was revealed that 500 million guests’ data had been breached from the Starwood Hotels reservation system.

This oversight will reportedly cost Marriott $123m in fines and may damage the brand as a whole, no matter how successful expansion is. While it is important to keep growing, it is not sustainable to do this at the expense of existing business.”

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