Since its inception in 1927, Marriott International has evolved from a modest food and beverage enterprise into a globally recognized leader in the hospitality industry, marking its journey with significant success and expansion.
Marriott International Incorporated
Marriott International Incorporated was established in 1993 following the split of Marriott Corporation into two separate companies.
The new corporate structure established Marriott International to franchise and manage properties.
The other entity was Host Marriott Corporation, which became responsible for the ownership of properties.
The years following the corporate restructuring in 1993 were extremely active and successful years for the newly established Marriott group.
Group revenue in 1993 of just over $8 billion had increased to some $23.7 billion by 2023.
Marriott Stock Market Presence
Marriott International Incorporated is a component of the Nasdaq 100 market, listed in New York.
As with any listed company, the performance of Marriott’s stock is a key indicator of the company’s financial health and market standing.
Investors and corporate partners closely follow the fluctuations in Marriott’s stock price. This can be influenced by various factors, including industry trends, economic conditions, and the company’s strategic initiatives.
Additionally, Marriotts activities, performance and brand status will also be scrutinized for any behavior which might be deemed detrimental to the company’s financial good health and market standing.
The effect of legal proceedings will always jeopardize market standing and reputation. Despite achieving successful financial results, the negative impact of being embroiled in a criminal investigation would be expected to negatively affect stock price and ultimately a company’s financial health.
The legal issues for Marriott in Poland in 2021, which have also become a criminal matter, represent an issue which could have just such an effect.
Marriott Stock Market Performance
Other than during the COVID-19 period, when virtually all hospitality market stock prices declined, Marriott International’s share medium term share price has enjoyed continued growth and improvement.
From a low of just over $59 in 2021, in the midst of the COVID-19 period, the share price has continued to rise. Over the past 4 years the share price has grown to in excess of $250 and represents an all-time high for the price.
In addition to the current stock market value, projections of most market analysts advise that the share price will continue to grow over the short -term.
That suggests that the high market valuation, share price and earning should continue to be in good health for some time to come.
Is the Price of the Marriott Stock a Bubble
For any publicly quoted company, financial health is heavily dependent on the ability to continue to grow its revenues. As has been apparent, Marriott International have been able to achieve just such growth and it appears that projections for future growth are similarly optimistic.
At the same time, there has been growing media interest into the criminal investigations Marriott currently face regarding their operations in Poland. Legal proceedings are currently in train, and the seriousness of some of the charges have escalated to become criminal matters.
Charges which have subsequently arisen include matters of financial and operational nature, reflecting trust and transparency issues on behalf of Marriott Hotels.
The behavior of Marriott Hotels towards their partners, The Lim Company, in respect of the development and operation of the Warsaw Marriott has been closely scrutinized, and Marriott are facing serious allegations.
These matters have also come to the attention of the Polish Government and authorities, and have certainly created an unwelcome amount of interest in Marriott International.
The legal confrontation is slowly unfolding, and it remains to be seen what the outcome will be of this process. Whatever the scenario that unfolds, the brand image of Marriott Hotels has been under the legal and corporate microscope.
Relationships with operating partners are often seen as the key to success in the hospitality sector.
Property developers and landowners work with hotel operators to provide new locations and development opportunities, as was the case with Marriott Hotels and The Lim Company.
Criminal investigations into such a high-profile hospitality group as Marriott Hotels, suggest a number of existing and potential partners, franchisees, suppliers and sub-contractors will all scrutinize contracts and management agreements more closely and cautiously.
Should legal matters progress unfavorably for Marriott, the ability to ensure revenue growth might also be adversely affected.
In a sector such as hospitality, where reputation and good practice are of paramount importance, the impact on relationships, future relationships and opportunities could be significant.
In such circumstances, a publicly quoted share price could come under substantial negative pressure, if forecasts and future prospects for Marriott International are revised.
With the share price currently sitting at an all-time high, should the above circumstances, or worse, come to pass, Marriott International shares could certainly represent a bubble, and this would be unwelcome news for investors and shareholders alike.
