Risk Management

Risk can be defined as combination of the probability of an

event and its consequences. In all types of understanding,
there is the potential for events and consequences that
constitute opportunities for benefit and threats to success. Risk
Management is increasingly recognized as being concerned
with both positive and negative aspects of risk
Effective risk management and internal control is an essential
part of a hotel chain which brings a responsible business for
long term. What risk factors would you expect to see in the
hotels annual report
Risk Factors:
Forward looking statements
Ideally used in managements discussion and analysis of
companies financial conditions and results of operations based
on beliefs and assumptions of company management and
information currently available in the organisation. It includes
possible and assumed future results of operations;
There are various risks factors that a well-established
organisation may have to face due to the regional and
international competitions and economic uncertainty which
could affect the results to show variations (drop)
Owning around 4000 property all around the world, Marriott has
created a space for themselves in the markets where they are
willing to take various financial risks
Operational risks
Pre-mature termination of management or franchise
agreement could hurt financial performance and it caused
due to bankruptcy of hotel owner or franchise
Lodging operations are subject to global, regional and
national conditions. Business activities could be affected
by global and regional economics

 The growing significances of our operations outside the

united states also makes Marriott increasingly susceptible
to the risk of doing business internationally, which could
lower their revenues, increase cost, reduced profits or
even disrupts their business

Complication in expanding the international share

Laws and regulation of target countries such as foreign
ownership and trade restrictions, import and export
control
Competitions laws and currency regulations
Limitations on ability to repatriate non US earning in tax
effective manner
Managing an organisation doing business in many
different countries
Rapid changes in government policies
New programs and new branded products may not be
successful
Risks related to natural or manmade disasters, contagious
disease, tourists activity and war could reduce the
demand for lodging which may adversely affect our
revenues
Dis-agreement with the owners of the hotels that we
manage or franchise may result in litigation or may delay
implementations of product or service initiatives
Our business depends on quality and reputations of our
brands and any deteriorations in the quality or reputation
of these brands could have an adverse impact on our
market share, reputation, business, financial conditions or
results of operations
Development activities as a co investment with the third
party may result in disputes that could increase project
costs, impair project operations, or increase project
completion risks.
Technology, Information Protection and privacy risk

 A failure to keep pace with developments in technology

could impair our operations or competitive positions
An increase in use of third party internet services to
book online hotel reservation could adversely affect our
business
Failure to maintain the integrity of internal or customer
data could result in faulty business decisions, operation
inefficiencies, and damage to our reputations and/or
subject us to costs, fines or lawsuits.
Changes in privacy law could adversely affect our ability
to market our products effectively
Other risks
Changes in tax and other laws and regulations could
reduce our profits or increase our costs
Challenge to attract and retain talented business
associates.
2011 spin-off of our former time share business could
result in significant tax liability to the owners and
shareholders
2011 spin-off also might not produce cash tax benefits
that Marriott anticipated