Global reach. Personal service. In pictures, our Annual Report tells the story of how Marriott International has become the world’s leading lodging company—not just through its diverse portfolio of 3,000 lodging properties, representing 19 brands in almost 70 countries and territories—but by training and engaging the very best employees to deliver exceptional service. In the end, success depends on the guest experience and hospitality delivered by the 300,000 employees at our managed and franchised hotels worldwide.

This legendary service is the foundation of Marriott International and owes its success to our unique culture, which values opportunity and respects the goals and aspirations of our people. This, combined with a solid management team and our tested business model of managing and franchising hotels owned by others, has provided us with a significant competitive advantage.

We have stayed true to these pillars even as we continue to innovate. It’s why we are able to report another solid year in 2007.

Our worldwide systemwide Revenue Per Available Room (RevPAR) rose 6.5 percent in 2007, driven by strong demand from our best corporate customers and other business travelers. More than 20 percent of our fee revenue derives from properties located outside North America.

With our owners and franchisees, we added more than 200 properties to our system. Full year incentive management fees totaled a record-breaking $369 million in 2007, up 31 percent over the prior year. We generated diluted earnings per share (EPS) from continuing operations of $1.75 for 2007, an increase of 6 percent, as we and our hotel owners improved profit margins in our hotels by more than 1.5 percentage points.

These strong improvements in hotel-level profitability resulted from efficiencies achieved through technology and workforce effectiveness. Net cash provided by operating activities totaled $778 million in 2007.

We’re committed to delivering value to shareholders and in 2007 we returned nearly $1.9 billion to our investors through share repurchases and dividends. The company repurchased 41 million shares for $1.8 billion in 2007, and at year-end 2007 we had 33 million shares remaining in buybacks authorized by our Board. Return on invested capital for 2007 topped 25 percent, nearly double our performance just four years ago.

Building Our Brands

With the introduction of two new brands in 2007, Marriott’s portfolio encompasses nearly every segment of the lodging and timeshare industries. At the same time, two of our proven brands will celebrate milestones in 2008—Marriott Hotels & Resorts will welcome its 500th hotel, and Courtyard its 800th.

We are very excited about the launch of “Edition,” a new genre of lifestyle brand that will combine the intimate and unique lodging experience invented by the visionary pioneer Ian Schrager with Marriott’s development scale and operational expertise. We expect the portfolio to reach more than 100 hotels worldwide, and have signed preliminary agreements on nine hotels in such world-class destinations as Paris, Madrid, Costa Rica, Miami, Washington, D.C., Chicago and Los Angeles.

Through a partnership with Nickelodeon, the top kids’ entertainment brand, Marriott plans to capture the hearts of our younger customers and the young at heart—their parents.

Powered by Nickelodeon’s irreverent and fun entertainment, these upscale resorts will feature state-of-the-art spas, pools and water parks, and live entertainment starring Nick characters.

Our full-service brands—Marriott Hotels & Resorts and the uniquely stylish Renaissance Hotels & Resorts—are transforming their public spaces to encourage guests to work and socialize there, incorporating the latest design, technology and food and beverage offerings. To date, 20 lobbies have been redesigned, with another 80 anticipated by 2009. Featured in this report, the Renaissance New York Hotel Times Square showcases this new concept, and how our owners are infusing the brand with a nearly $2 billion investment in new hotel construction, conversions and renovations.

Building on the surging global demand for luxury, The Ritz-Carlton Hotel Company, L.L.C. has increased its development pace with 2007 hotel openings in Beijing, Dallas, Dublin, Vail, Col., Moscow, and Tokyo. The Ritz-Carlton plans to double its portfolio over the next eight years, leveraging its reputation to create new opportunities with The Ritz-Carlton Residences®.

The Ritz-Carlton has scored a virtual “sweep” of prestigious number one rankings in recent surveys by J.D. Power and Associates and Consumer Reports. Our JW Marriott Hotels & Resorts brand, which offers relaxed luxury, will reach 50 hotels and resorts in 22 countries by July 2009.

In 2007, Residence Inn debuted a breakthrough integrated marketing campaign, “Master the Long TripSM.” The TV and print ads feature “feat performers” who demonstrate the brand’s dramatic support to business travelers on long stays and highlight the new décor, which includes stainless steel appliances, granite kitchen countertops, and more luxurious bedding.

Courtyard is gaining traction from reinvented hotels and new unit growth, and customers will be delighted by the brand’s contemporary new lobby design with its cutting-edge technology platform. Courtyard is growing dramatically outside the United States, entering new markets such as the Czech Republic, El Salvador, Japan and Thailand.

Our moderate TownePlace Suites brand is reinventing itself to meet the needs of a growing segment of self-sufficient, valueconscious travelers on extended stays. Warm and functional lobbies with a floor-to-ceiling TowneMap® encourage guests to gather and share great places to eat, shop and relax.

SpringHill Suites is evolving to capture the upper-moderate lifestyle category. It continues its rapid growth, with more than 175 hotels across the United States and Canada at year-end 2007 and more than 120 more in its pipeline, including those that combine lodging, retail and residential space.

Fairfield Inn and Fairfield Inn & Suites is our fastest-growing brand, rejuvenated by an aggressive "plant and prune" strategy. The brand expects to expand from more than 535 hotels at year-end 2007 to 700 hotels over the next three years.

Fueling Our Growth

When the JW Marriott Hotel Beijing, designated our 3,000th hotel, opened this year, it symbolized the company's tremendous global growth, especially in Asia. Both the JW Marriott Hotel Beijing and The Ritz-Carlton, Beijing look forward to welcoming the world to China for the 2008 Olympic Games.

We operate more than 30 hotels in China, and we expect to open another 24 through 2010. In India, we have six hotels and 18 more scheduled to open through 2010. In Thailand, we have nine hotels and 12 more in our pipeline.

In the Middle East, including Egypt, we operate or franchise 28 hotels, with more than 25 in the pipeline. The company's worldwide pipeline of hotels under construction, awaiting conversion or approved for development totals approximately 800 hotels and 125,000 rooms. More than 60 percent of our full-service pipeline is outside the United States. We expect to open 85,000 to 100,000 rooms from 2008 through 2010.

Our timeshare business continues to be a strong source of revenue across four brands, from traditional weekly vacation ownership to fractional ownership. As the number of affluent U.S. households continues to rise, Marriott expects growth in this category.

Customer loyalty remains high. Today, over 370,000 timeshare owners possess an average of 1.3 weeks. Eighty percent of those owners redeem their investments for a "Marriott experience" at one of our timeshare properties or Marriott-branded hotels, or exchange them for Marriott Rewards points.

We have entered the Asian timesharing market with our Asia Pacific points program, providing leisure travelers in that rapidly growing region with more vacation opportunities. In 2008, we expect contract sales at new properties to begin in Kauai, Hawaii; Orlando and Singer Island in Florida; and Lake Tahoe, Calif., where our Grand Residences by Marriott and Marriott's Timber Lodge were both recently recognized by Conde Nast Traveler as among the top 50 ski hotels in North America. Technology remains one of our strongest competitive advantages, especially when combined with our global distribution.

Technology powers Marriott Rewards, our award-winning guest loyalty program with over 28 million members, and Marriott.com, one of the world's top 10 retail Web sites, with $5.2 billion in gross revenue, including referrals to its customer care group.

Marriott.com is customized for nine countries, and is available on your PDA or Internet-enabled phone. By the end of 2009, we project that nearly all of our hotels in the United States will have high-definition flat-screen TVs.

Our unique plug-in panel, which is in 40,000 Marriott Hotels & Resorts and Renaissance rooms, enables guests to easily connect their iPods, digital cameras, camcorders and laptops to the TV.

Connecting with our customers has never been more important, and over the next three years, we are realigning our sales organization so that corporate and group customers can work with a primary point of contact. This new structure will reduce duplication, enable us to call on more customers and help us serve them even better.

We are also in touch with more customers through social media and online video. With nearly 350,000 visits to our podcast and blog, "Marriott on the Move," we can interact with thousands of guests. Plus, people visiting the blog have booked more than $3 million in gross sales. We also have videos on YouTube.com, which is a fun way to learn about our company.

Sustaining Our Progress

Sustainability means being a good corporate citizen and environmental steward, and promoting economic growth,
diversity and inclusion in our communities worldwide. Guided by our Board of Directors, we have exceeded our objective to spend $1 billion with diverse suppliers three years ahead of schedule, and are expanding our efforts into the United Kingdom and Brazil. Through continued outreach, we now have nearly 450 hotels owned or under development by minorities and women --close to our goal of 500 by 2010.

In partnership with Conservation International, Marriott is ramping up its efforts to integrate environmental and sustainable practices into its business in 2008 in four key areas: supply chain; green buildings; waste, water and energy; and employeeand guest engagement. This strategy builds on the company's established plans to get greener, including an effort to reduce greenhouse gases by nearly 415,000 metric tons by 2010. At our headquarters building, we have become waste neutral through an aggressive recycling and composting program, and by replacing 20 tons of Styrofoam and plastic a year with biodegradable products.

The Future Beckons

Our ability to grow, innovate and deliver superb service, combined with our tested, highly successful business model, positions us to perform well in a wide range of economic scenarios. We're looking forward to our future--the best is yet to come.

J.W. Marriott, Jr.
Chairman and Chief Executive Officer
William J. Shaw
President and Chief Operating Officer

View Marriott International, Inc. 2007 Annual Report

You can read the annual report online, or download full report in pdf format.

OUR BRANDS:

The Ritz-Carlton® Hotel Company has enjoyed more than two decades as an award-winning, luxury hospitality organization. The Ritz-Carlton manages 70 award-winning hotels and resorts; private condominiums; fractional ownership properties; golf communities with exclusive private homes; elegant spas; and highly successful restaurants. The Ritz-Carlton name has become synonymous with delivering the finest service for guests around the globe.

Bulgari Hotels & Resorts,® developed in partnership with jeweler and luxury goods designer Bulgari SpA, is a collection of sophisticated, intimate luxury properties located in exclusive destinations. Properties feature Bulgari’s striking contemporary interpretation of luxury design and cuisine. Joining Bulgari’s first hotel in Milan, the Bulgari Resort in Bali opened fall 2006, featuring comprehensive spa facilities in a spectacular sea-view setting.

JW Marriott® Hotels & Resorts, the most distinctive properties bearing the Marriott name, invites guests to enjoy a new dimension of personal luxury—from designer bedding and delectable dining to extraordinary spa and golf offerings—enhanced by exquisite environments, approachable elegance and attentive service at nearly 40 locations worldwide.

Marriott® Hotels & Resorts, the flagship brand, inspires your best performance during travel, engineering an experience with the services and human touches that help you achieve and revive. With more than 480 properties worldwide, Marriott provides a current approach to the classic hospitality that has made it a leading choice for travelers for over 70 years.

Nickelodeon® and Marriott team up to create family-friendly resorts and spas. These upscale, self-contained resorts will provide something for every family member. Powered by Nickelodeon’s signature slime, the resorts will feature state-of-the-art pools, water parks, entertainment starring Nickelodeon’s most famous characters such as Dora the Explorer and SpongeBob SquarePants, spas for adults and kids and opportunities for families to create wonderful memories.

Renaissance® Hotels & Resorts keeps your life interesting during travel, offering stylish environments and opportunities to explore each unique destination along with the attentive service of an upscale hotel. At 140 worldwide Renaissance locations, every moment adds up to an interesting stay that fulfills your journey.

Renaissance ClubSport,® a new “lifestyle” concept, combines boutiquestyle ambience of Renaissance Hotels & Resorts with sleek, upscale, fullservice fitness clubs. Renaissance ClubSport offers distinctive décor in guest rooms, imaginative dining, attentive service and world-class sports and fitness amenities. The first Renaissance ClubSport is located in Walnut Creek, Calif.; six more properties are under development.

Courtyard by Marriott® offers its business transient guests a refreshing approach to business “performance” hotels in the upper-moderate tier. Courtyard provides a smart, intuitive environment that offers choice and control at nearly 770 locations around the world. Properties balance the mix of services and design to accommodate guests’ needs to stay connected, productive, and refreshed during their stay.

SpringHill Suites by Marriott® offers a fresh and interesting perspective to the growing segment of travelers in the upper-moderate lifestyle tier. With more than 175 hotels in North America, SpringHill Suites expertly blends substance and style through spacious, re-imagined suites, flexible and inviting lobby design, and inspired service and guest amenities.

Fairfield Inn by Marriott® provides business transient guests a successful trip with award-winning quality and hospitality at a satisfying value. It allows the purpose-driven guest to stay productive. Fairfield Inn & Suites offers comfortable suites, an exercise room, library and additional amenities. There are more than 535 Fairfield Inn hotels, with more than 200 Fairfield Inn & Suites locations in the United States.

Residence Inn by Marriott,® the leading extended-stay brand, helps guests feel connected while away from home. Spacious suites with full kitchens and separate areas for sleeping, working, relaxing and eating offer homelike comfort and functionality. Guests experience a true sense of community as they interact with our friendly staffs, enjoy our enhanced complimentary hot breakfast, and mingle at our evening social hours at more than 545 hotels.

Moderate-tier, extended-stay guests find comfort in being self-sufficient and doing things their way. To sustain their lives’ rhythm, TownePlace Suites by Marriott® provides a place to unpack, settle in and connect to the local area. With a casual, residential atmosphere and a productive home office and full kitchen in every suite, at more than 140 hotels, TownePlace Suites is all about real living.

Marriott Executive Apartments® provides upscale accommodations for business professionals on extended stay (30 nights or more) outside of North America. Offering studios to three-bedroom apartments in more than 15 locations, they combine the privacy and comforts of residential living with the services and luxuries of a Marriott hotel, such as restaurants, business centers and health clubs. Each property features local design elements and state-of-the-art technology.

Marriott ExecuStay,® a leading U.S. corporate apartment provider, offers temporary housing to travelers who prefer the spaciousness and privacy of an apartment for extended stays of 30 days or longer. With locations in most major, secondary and tertiary U.S. cities, ExecuStay finds the right solution for each traveler and delivers a fully furnished, accessorized apartment with as little as one day’s notice.

Marriott Vacation ClubSM (MVC) is the recognized worldwide leader in the vacation ownership industry. The 46 MVC properties around the globe offer a lifetime of memorable vacations featuring one- to three-bedroom villas (depending on location) with living and dining areas, master bedroom and bath, balcony, full kitchen and washer/dryer. Flexible usage options include exchange to MVC resorts and trade for Marriott Rewards® points.

The Ritz-Carlton Club® is a deeded, fractional ownership real estate offering combining the benefits of second home ownership with renowned Ritz-Carlton service. Designed as a private club, Members may access their home Club or other Ritz-Carlton Clubs. Locations: Aspen Highlands and Bachelor Gulch, Colo.; St. Thomas, U.S.V.I.; San Francisco; and Jupiter, Fla., as well as several future properties ranging from Kapalua Bay on Maui to North Lake Tahoe, Calif.

Grand Residences by Marriott® provides second home options through fractional real estate offerings and select private ownership opportunities. Designed for regional second home destinations, the brand is dedicated to providing carefree property ownership through Marriott management expertise and a variety of amenities and services. Locations: Panama City Beach, Fla.; South Lake Tahoe, Calif.; and London, England.

Horizons by Marriott Vacation Club® provides affordable vacation ownership, while offering a variety of amenities and activities for the entire family. Each villa includes living and dining areas, balcony, kitchen and washer/dryer. Horizons owners have a flexible usage program including exchange to other Marriott Vacation Club resorts, and the ability to trade for Marriott Rewards points. Locations: Orlando, Fla., and Branson, Mo.

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Visit Marriott International, Inc. Website

Marriott International, Inc. is a leading worldwide hospitality company. Its heritage can be traced to a small root beer stand opened in Washington, D.C. in 1927 by J. Willard and Alice S. Marriott. Today it has nearly 3,000 lodging properties in the United States and 67 other countries and territories across 19 lodging and vacation resort ownership brands.

 The company is headquartered in Bethesda, Md., and had approximately 151,000 employees at 2007 year-end. It is ranked as the lodging industry's most admired company and one of the best places to work for by FORTUNE(R). The company has been recognized by the U.S. Environmental Protection Agency (EPA) with the 2007 Sustained Excellence Award and Partner of the Year since 2004. In fiscal year 2007, Marriott International reported sales from continuing operations of $13 billion.

Marriott International's goal is to create significant value by aggressively building its brands and growing its businesses. The company is dedicated to providing exceptional service to customers, growth opportunities for associates, and attractive returns to shareholders and owners.

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