eloping long relationships with employees. The company considers recruiting and employee development as a major challenge for the near future.
Rivalry: The hotel market is very segmented. In 2003 Marriott, for all thousands of locations, boasted only an 8% market share in the U.S (Timeline). The industry added only 60,000 rooms in 2003 (Annual Report). There are also signs that the demand for hotel rooms is increasing from an upswing in the world economy and increased international travel. With customers easily comparing prices on the Internet and hotel building continuing to be an expensive venture, the competition in this industry is fierce.
Threat of Substitutes: Business travelers consider a hotel room a necessity. When they travel they must have someplace to stay. Information technology is decreasing this need, but only slightly. Leisure travelers, however, have many other options. They can take day trips, stay with friends, camp, or simply not travel at all.
Buyer Power: Though individual buyers have little influence on the price of hotel rooms, the quest for customer loyalty has increased the power of the customers substantially. Marriott has 20 million people in its rewards program (Timeline). They provide a full line of hotel options and a wonderful website in the hope that customers will not wish to stay anywhere else.
Suppler Power: Marriott tends to produce much of what it requires. This stems from their role as a franchise management company. When they do buy from an outside source, their order is so large that they have tremendous leverage. For their smaller competitors, however, the supply of everything from marketing to soap can become quite expensive.
Barriers to Entry: There are very large barriers to entry for most hotels. It requires a great deal of
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