Marriott Corporation Case Analysis

Marriott Corporation was a hospitality company that operated from 1927 until 1993, founded by J. Willard Marriott and Frank Kimball as Hot Shoppes, Inc. in 1957, Marriott Corporation opened its first hotel in Arlington County, Virginia, United States as the Twin Bridges Motor Hotel. Marriott Corporation’s first international property was opened in Acapulco, Mexico in 1969. Hot Shoppes became Marriott Corporation in 1967, which subsequently split into Marriott International, Inc. and Host Marriott Corporation in 1993.

J. Willard Marriott, who had moved away with his business partner Hugh Colton and his wife Alice from Utah to Washington, D.C. in 1927, where he operated a curbside food stand selling A&W Root Beer in the Columbia Heights neighborhood of Washington at 14th Street and Park Road NW. He would later rename the food stand The Hot Shoppe, adding Mexican food items to the menu. Marriott’s business expanded to Baltimore, Maryland, in 1934, shortly after which the company started its food services division. During Second World War, the business expanded to include the management of food services in defense plants and government buildings, such as the U.S. Treasury. Then in the 1950s, Hot Shoppes, Inc. started providing food services to public schools and to Children’s Hospitalin 1955, a contract which they held for 35 years.

The company went public in 1953. In 1957, the firm expanded into the hotel industry by opening the first Marriott hotel, the Twin Bridges Motor Hotel, in Arlington County, Virginia.

In 1964, Hot Shoppes, Inc. was renamed Marriott-Hot Shoppes, Inc. The company later became Marriott Corporation in 1967.

In 1967, Marriott acquired the Big Boy family restaurants chain from Bob Wian.

The following year, Marriott acquired the Fort Wayne-based RoBee’s, a roast beef sandwich fast-food chain, but later discovered that they would not be able to use the RoBee’s name nationally. At the suggestion of the new Marriott board member Bob Wian, cowboy actor Roy Rogers was contacted to lend his name to the roast beef sandwich venture and the Roy Rogers Family Restaurants was formed in a few months later by converting RoBee’s and a few Hot Shoppe locations.

Over the years, Marriott’s company interests expanded. Continuing with food services, Marriott eventually became involved with airline in-flight food service. This segment of their enterprise continues to be a large part of their business, providing food services to many major airlines.

In 1976, Marriott opened two theme parks called Marriott’s Great America in California and Illinois. Another was planned for Maryland or Virginia, but local opposition prevented construction from ever beginning at any of the three proposed sites. The parks had replicas of the first Hot Shoppes. Both parks were sold in the mid-1980s and continue to operate today under their new owners.

In 1982, the company acquired Host International for $120 million and also Gino’s Inc., the owner of Gino’s Hamburgers and Rustler Steak House restaurant chains, for $48.6 million. 108 Rustler Steak House Restaurants plus three other restaurants were sold in the following year to two different firms for undisclosed amounts. Newly formed Tenly Enterprises purchased 94 restaurants while Sizzler Restaurants International purchased the remaining 17.

By 1984, Marriott had formed a vacation time-share division, now called Marriott Vacation Club International, through the purchase of American Resorts Group for an undisclosed amount and also a senior-living division.

In 1985, the company purchased the Howard Johnson’s restaurant chain from the Imperial Group P.L.C. of London for $314 million with plans of converting the acquired restaurants to the Bob’s Big Boy brand and to make Bob’s the largest coffee-shop business in the country.

In 1987, Marriott sold the Big Boy restaurants franchise rights to Elias Brothers for an undisclosed amount while keeping 208 company-owned Bob’s Big Boy restaurants in California and selected locations on the East Coast.

In 1988, Marriott purchased all 91 Wag’s restaurants from Walgreens Corporation, but dissolved the chain in 1991.

The Roy Rogers chain was sold to Hardee’s in 1990 for $365 million in cash.

The last Hot Shoppes restaurant, located in the Marlow Heights Shopping Center, closed on December 2, 1999.