Appendix A. Vision and Mission Statements
i
Current Statements: “Our Mission, Goal and Values”
Current Mission
Our mission is to provide authentic hospitality by making a difference in the lives of the people we touch
every day, including our associates, guests and owners.
Current Goal
Our goal is to be the most preferred brand in each customer segment that we serve for our associates,
guests and owners.
Current Values
We aim to foster a common purpose and culture within the Hyatt family through shared core values of
mutual respect, intellectual honesty and integrity, humility, fun, creativity and innovation.
(From 2012 Annual Report)
New Statements: “Our Mission, Goal and Values”
New Mission
Our mission is to provide excellent as well as authentic hospitality by making a positive difference in the
lives of the people we touch every day, including our associates, guests and owners.
New vision
Our vision is to be the more preferred brand in each customer segment that we serve by providing high
quality service and accommodations; we strive to be the premier destination for travelers worldwide.
ii
Appendix B. SWOT Matrices
iii
Table 1: Hyatt SWOT Analysis
Strength
Key Indicator
Strong brand image with business
travelers
Description
The Hyatt’s strong brand image in
the business travel market is the
corporation’s major strength. A
consistently met expectation for
quality and service world-wide
provides a reliable choice for
frequent business travelers.
Loyal customer base with high
rate of repeat travelers
The Hyatt has a high rate of
customer retention and loyalty
among its business clients.
Locations in all major business
cities world-wide
Facilities located in major business
cities provide plenty of customers.
Customer benefits program
The Hyatt Gold Passport frequent
guest program provides incentives
for repeat guests.
The Hyatt’s disciplined financial
Strong capital base and disciplined approach was able to sustain
financial approach
effective operations during the
economic recession.
Weakness
Key Indicator
Very heavy focus on business
traveler needs.
Description
The Hyatt’s focused attention on
business travel, neglects the
recreational traveler and tourist
market.
More limited number locations
compared to top competitors.
The Hyatt has hotels in most
major business cities but lacks the
number of locations that its
competitors hold word-wide.
Mostly oriented to upper-middle
class and above travelers.
Within the business market, the
Hyatt’s target market is uppermiddle class and above travelers
with correspondingly more
amenities being provided. These
iv
additional luxuries price some
business travelers out of Hyatt
hotels, opting to stay in lower
priced accommodations that still
provide the necessary amenities
for business travel needs.
Opportunities
Threats
Slowdown of capital investment
growth during economic
downturn.
The global economic downturn
starting in 2008 reduced the
amount of travel businesses and
tourists took in response to
declining business revenue and
personal income.
Key Indicator
Shortage of hotel
accommodations in India and Asia
Description
The rapidly growing market for
hotels in the developing markets
of India and Asia are increasing
demand for upper class
accommodations for business
travelers and exposition spaces.
Growing hotel markets in Central
and South America
The market in Central and South
America is also showing great
expansion with a Hyatt subsidiary
acquiring a full service hotel in
Mexico City in 2012, providing the
opportunity for brand penetration
in the region.
Increased demand for roadside
accommodations in response to
increasing car travel by tourists.
The rising cost of air travel has led
to increasing travel by car,
increasing demand for roadside
accommodation that can support
the needs of these customers.
Increasing demand for branded
residential units.
The Hyatt has seen increasing
demand for their branded
residential units under their
“Hyatt Residence Club”.
Key Indicator
Changes and volatility in general
business/economic conditions
Description
Economic volatility in the global
market threatens the rate of
business travel world-wide,
leading to a reduction in demand
v
for hotels. Political instability can
reduce the number of travelers to
the region due to fear and/or
government restrictions.
Increasing fuel and travel costs
Increasing fuel and travel costs
impact the number of business
and recreational travelers and
lowers demand for hotel
accommodations.
Changes in operation costs
Rising HR costs in US market due
to government healthcare
requirements. Rising utilities
costs.
Competition for Guests
Competition for guests with
promises of greater luxury has led
to increasing operating and
renovation costs in order to pace
or exceed customer demand.
vi
Figure 1: Hyatt SWOT Strategy Matrix
vii
viii
Figure 2. Wyndham SWOT Strategy Matrix
ix
Figure 3: Starwood SWOT Strategy Matrix
x
Figure 4: Marriot SWOT Strategy Matrix
xi
Appendix C. Hyatt’s Organizational Chart
xii
Figure 5: Current Hyatt SBU Diagram
xiii
Figure 6: Current Hyatt Organizational Chart
xiv
Figure 7: Current Hyatt Board of Directors Organization
xv
Figure 8: Post-Acquisition Hyatt SBU Diagram
xvi
Figure 9: Post-Acquisition Hyatt Organizational Chart
xvii
Figure 10: Post-Acquisition Hyatt Board of Directors Organization
xviii
Appendix D. Value Chain Analysis & Sales Composition
xix
Figure 11: Pre-Implementation Hyatt Value Chain
xx
Figure 12: Pre-Implementation Starwood Value Chain
xxi
Figure 13: Post-Acquisition Hyatt Value Chain
xxii
Appendix E. Five Generic Forces Model
xxiii
Figure 14: Pre-Implementation Hyatt Five Forces Model
xxiv
Figure 15: Hyatt Post Implementation Five Forces Model
xxv
Appendix F. Porter’s Five Forces Model
xxvi
Figure 16: Pre-Implementation Hyatt Porter’s Five Forces Model
xxvii
Figure 17: Hyatt Post Acquisition Porter’s Five Forces Model
xxviii
Appendix G. Strategic Group Maps
xxix
Chart 1: Pre-Implementation (Room per Property vs. Employees)
350.00
Room per Property vs. Employees
300.00
Room per Property
250.00
Hyatt
200.00
Marriott
Wyndham
150.00
Starwood
Diamond
100.00
50.00
-50000
0
50000
100000
Employees
xxx
150000
200000
Chart 2: Pre-Implementation (Number of Countries vs. Properties)
Number of Countries vs. Properties
120
100
Number of Countries
80
Hyatt
Marriott
60
Wyndham
Starwood
Diamond
40
20
-2000
-1000
0
1000
2000
3000
4000
5000
Properties
xxxi
6000
7000
8000
9000
Chart 3: Post-Implementation (Rooms per Property vs. Employees)
Post Year 1: Rooms per Property Vs. Employees
350
300
Rooms per Property
250
Hyatt
200
Marriott
Wyndham
150
Diamond
100
50
0
-50000
0
50000
100000
150000
Employees
xxxii
200000
250000
300000
Chart 4: Post-Implementation (Number of Countries vs. Properties)
Post Year 1: Number of Countries vs. Properties
140
120
Number of Countries
100
80
Hyatt
Marriott
60
Wyndham
Diamond
40
20
0
-2000
0
2000
4000
6000
Properties
xxxiii
8000
10000
Appendix H. IE Matrices
xxxiv
Table 2: Hyatt IFE
Hyatt’s IFE
Key Internal Factors (1-4*)
Strengths
1. Strong Brand Image
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.15
4
.60
.15
4
.60
2. Loyal Customer Base
.10
3
.30
.125
4
.50
3. Customer Benefit Programs
(Gold Passport)
.025
3
.075
.05
4
.20
4. Online Marketing Campaigns
.075
3
.225
.05
3
.15
5. Locations in all major cities
.225
4
.50
.125
4
.50
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
1. Upper-Middle Class
.15
3
.45
.10
2
.20
2. Rely on Business Travel
.10
2
.20
.05
2
.10
3. Limited Locations
.10
3
.30
.15
4
.60
4. Decline in Capital Investment
.075
3
.225
.10
2
.20
5. Exposure to Premium Markets
.075
1
.075
.10
2
.20
Weaknesses
1.00
2.95
xxxv
1.00
3.25
Table 3: Hyatt EFE
Hyatt’s EFE
Key External Factors (1-4*)
Opportunities
1. Shortage in India and Asia
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.175
3
.525
.15
4
.60
2. Growth in Central and South
America
3. Ability to Diversify
.225
3
.375
.15
4
.60
.075
3
.225
.10
4
.40
4. Demand for Branded Residential
Units
.225
3
.375
.10
3
.30
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.15
2
.30
.125
2
.25
Threats
1. Economic Downturn
2. Increasing Cost of Travel
.225
3
.675
.125
3
.375
3. Increasing Operational Costs
.075
3
.225
.075
4
.30
4. Shifting Exchange Rates
.05
1
.05
.05
1
.05
5. Competition for Customers
.10
1
.10
.125
2
.25
1.00
2.85
xxxvi
1.00
3.125
Table 4: Starwood IFE
Starwood Hotels and Resorts Worldwide Inc. IFE
Key Internal Factors (1-4*)
Strengths
1. Strong Brand Image
PreWeight
Rating
Weighted
Score
.125
3
.375
PostWeight
.15
Rating
Weighte
d Score
3
.45
2. 9 Affiliated Brands
.075
3
.225
.10
3
.30
3. Customer Benefit Programs
(Gold Passport)
4. Preferred guest for AMEX
.05
3
.15
.05
3
.15
.075
4
.30
.05
3
.15
5. Locations in all major cities
.125
4
.50
.10
3
.30
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
6. Upper-Middle Class
.125
2
.25
.15
1
.15
7. Focus on Luxury and Upscale
full-service hotel
8. Very Expensive
.125
2
.25
.15
1
.15
.125
2
.25
.10
1
.10
9. Upgrades vary by property
.075
3
.225
.05
2
.10
10. Decline in Capital Investment
.05
2
.10
.05
2
.10
Weaknesses
1.00
2.625
xxxvii
1.00
1.95
Table 5: Starwood EFE
Starwood Hotels and Resorts Worldwide Inc. EFE
Key External Factors (1-4*)
Opportunities
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.125
3
.375
.10
3
.30
.175
4
.70
.20
4
.80
.125
3
.375
.10
3
.30
.075
3
.225
.10
3
.30
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
6. Economic Downturn
.10
2
.20
.10
2
.20
7. Increasing Cost of Travel
.10
3
.30
.10
2
.20
8. Increasing Operational Costs
.05
2
.10
.10
2
.20
9. Shifting Exchange Rates
.10
1
.10
.05
1
.05
10. Competition for Customers
.15
2
.30
.15
1
.15
11. Existing location in Rio De
Janeiro
12. Growth in Central and South
America
13. Ability to Diversify (Roadside
B&B)
14. Demand for Branded Residential
Units
Threats
1.00
2.675
xxxviii
1.00
2.5
Table 6: Diamond IFE
Diamond Resort’s IFE
Key Internal Factors (1-4*)
Strengths
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.125
4
.5
.125
4
.5
7. Loyal Customer Base
.10
3
.3
.10
4
.4
8. Member Club
(THE Club)
.075
3
.225
.075
4
.3
9. Online Marketing
.05
3
.15
.05
3
.15
10. Locations in popular vacation
areas
.15
4
.6
.15
4
.6
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
15. Upper-Middle Class
.10
2
.2
.10
2
.2
16. Rely on Tourist Travel
.15
2
.3
.15
2
.3
17. Limited Locations
.10
2
.2
.10
2
.2
18. Decline in Capital Investment
.075
1
.075
.075
1
.075
19. Exposure to Premium Markets
.075
1
.075
.075
1
.075
6. Strong Brand Image
Weaknesses
1.00
2.625
xxxix
1.00
2.8
Table 7: Diamond EFE
Diamond Resort’s EFE
Key External Factors (1-4*)
Opportunities
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
5. Shortage of Branded Vacation
Properties
6. Return of tourist travel
.125
2
.25
.125
2
.25
.175
3
.525
.175
3
.525
7. Diverse Locations
.125
3
.375
.125
3
.375
8. Demand for Residence Units
.075
3
.225
.075
3
.225
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.15
2
.3
.15
2
.3
Threats
11. Economic Downturn
12. Increasing Cost of Travel
.15
3
.45
.15
3
.45
13. Increasing Operational Costs
.05
1
.05
.05
1
.05
14. Shifting Exchange Rates
.025
1
.025
.025
1
.025
15. Competition for Customers
.125
2
.25
.125
2
.25
1.00
2.45
xl
1.00
2.45
Table 8: Wyndham IFE
Wyndham IFE
Key Internal Factors (1-4*)
Strengths
PreWeight
Rating
Weighted
Score
1. One of the world's largest
hospitality companies
2. Has multiple reputable brands
.225
4
.9
3
.375
.125
PostWeight
.225
Rating
Weighte
d Score
3
.675
3
.375
.125
3. Significant presence in most
major hospitality markets
4. Industry leader in sustainable
“green” programs
Weaknesses
1. Small exposure to emerging
markets
2. Focusing on US and European
markets
3. Caters to mainly middle
class/economy travelers
4. Weak brand identity in European
markets
.10
3
.3
.10
3
.3
.05
3
.15
.05
3
.15
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.225
1
.225
.225
1
.225
.15
1
.15
.125
1
.125
.075
2
.15
.10
2
.2
.05
2
.1
.05
2
.1
1.00
2.35
xli
1.00
2.15
Table 9: Wyndham EFE
Wyndham EFE
Key External Factors (1-4*)
Opportunities
1. Increase demand for expansions
in timeshare
2. Mergers and acquisition with
existing franchises in China,
Middle East, UK, India
3. Direct franchise opportunities
throughout the world
Threats
1. Franchises are not kept up to
Wydham’s standards could hurt
brand loyalty
2. Low-class market could hurt
brand image
3. Changes in the number and
occupancy and room rates of
hotels operating under franchise
and management
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.125
3
.375
.125
3
.375
.25
4
1
.225
4
.9
.125
4
.5
.15
3
.45
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.175
2
.35
.175
2
.35
.175
2
.35
.175
2
.35
.15
2
.3
.15
2
.3
1.00
2.875
xlii
1.00
2.725
Table 10: Marriott IFE
Marriot’s IFE
Key Internal Factors (1-4*)
Strengths
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
1. Owns roughly 1% of its hotel
portfolio. As a result, the company is
less vulnerable to fluctuations in the
real estate market – the remaining 99%
comes from franchising.
2. Vast company with a worldwide
presence – 74 countries and more than
3,700 properties
3. Global presence coupled with strong
brand portfolio ensures revenue
streams from different sources
.125
4
.5
.175
4
.7
.25
4
1
.225
4
.9
.125
3
.375
.10
3
.3
Weaknesses
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
1. Disproportional market focus –
Marriott International is incredibly
reliant on the domestic (U.S.) market,
which leaves the company at a
disadvantage when considering the
sometimes unfavorable economic
conditions that come with the domestic
market.
2. Business model of continuous
franchising and high number of hotels
can lead to dilution of the perception of
the brand therefore leading to a
possible decrease in revenue growth.
Disproportional market focus – Marriott
International is incredibly reliant on the
domestic (U.S.) market, which leaves
the company at a disadvantage when
considering the sometimes unfavorable
economic conditions that come with the
domestic market.
.30
3
.9
.30
3
.9
.20
3
.6
3
.6
1.00
3.375
xliii
.20
1.00
3.4
Table 11: Marriot EFE
Marriot’s EFE
Key External Factors (1-4*)
Opportunities
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
1. Strong growth potential in the hotel
industry in emerging markets creates a
new avenue for new sources of revenue
2. Continuous brand innovation to suit
the evolving nature of customer
preferences
.35
3
1.05
.30
2
.6
3
.45
.20
3
.6
Threats
PreWeight
Rating
Weighted
Score
PostWeight
Rating
Weighte
d Score
.275
2
.55
.30
2
.6
.20
2
.4
.175
2
.35
.025
3
.075
.025
3
.075
1. Consumer confidence – negative
economic conditions coupled
with a rising lack of confidence in
usually strong markets such as
the U.S. market can have adverse
effects on Marriott
International’s operations. This is
especially true in the domestic
market
2. Due to the global economic
downturn, more consumers are
spending less on travel and the
expenses associated with travel
3. Recent terrorist attacks in some
of the emerging markets (e.g.
Nigeria) raise security concerns
.15
1.00
2.525
xliv
1.00
2.225
Chart 5: IE Matrix Pre-Implementation
xlv
Chart 6: IE Matrix Post-Implementation
xlvi
Appendix I. GE McKenzie 9 Cell Matrix (CSA/ISA)
xlvii
Chart 7: CSA/ISA 9 Cell Matrix Pre-Implementation
Pre CSA/ISA 9 Cell Matrix
9
Invest
Grow
Grow or Let Go
Grow or Let Go
Grow
ISA Weighted Score
6
Harvest
3
Grow or Let Go
Harvest
Divest
0
9
6
3
CSA Weighted Score
xlviii
0
Hyatt
Marriott
Wyndham
Starwood
Diamond Resort
Chart 8: CSA/ISA 9 Cell Matrix Post-Implementation
Post 1 Year - CSA/ISA 9 Cell Matrix
Invest
Grow
9
Grow or Let Go
Grow
ISA Weighted Score
6
Harvest
Grow or Let Go
3
Grow or Let Go
Harvest
Divest
0
9
6
3
CSA Weighted Score
xlix
0
Hyatt
Marriott
Wyndham
Diamond
Table 12: CSA/ISA Pre-Implementation
l
Table 13: CSA/ISA Post-Implementation
li
Appendix J. BCG Matrix
lii
Chart 9: Pre-Recommendation: BCG Chart
BCG Chart
0.4
0
1
0.5
0
Relative Market Share
liii
-0.4
Market Growth
Hyatt
Marriott
Wyndham
Starwood
Diamond
Chart 10: Post - Recommendation: 1 Year BCG Chart
Post BCG Chart
0
1
0.5
0
Market Grow
0.4
Hyatt
Marriott
Wyndham
Diamond
Relative Market Share
liv
-0.4
Appendix K. Company Life Cycle
lv
Figure 18: Pre-Recommendation Company Life Cycle
lvi
Figure 19: Post-Recommendation Year 5 Company Life Cycle
lvii
Chart 11: 7 Year Company Life Cycles
7 Year Company Life Cycles
14,000
12,000
Total Revenue
10,000
Hyatt
Marriott
8,000
Wyndham
6,000
Starwood
Diamond
4,000
2,000
0
2006
2007
2008
2009
Years
lviii
2010
2011
2012
Appendix L. SPACE Matrix
lix
Table 14: SPACE Factors
lx
Chart 12: SPACE Matrix
lxi
Appendix M. Edward Altman Z-Score
lxii
Table 15: Hyatt’s Edward Altman Z-Score
INPUTS
2009
2011
2012
Working Capital
1,494,000.00
1,569,000.00
1,023,000.00
1,140,000.00
Total Assets
6,119,000.00
7,243,000.00
7,507,000.00
7,640,000.00
Total Liabilities
2,115,000.00
2,112,000.00
2,679,000.00
2,809,000.00
Revenue
3,332,000.00
3,527,000.00
3,698,000.00
3,949,000.00
EBIT
281,000.00
142,000.00
Retained Earnings
Market Value of
Equity
1,381,000.00
1,404,000.00
1,517,000.00
1,605,000.00
5,198,868.03
7,920,089.06
6,216,706.68
6,250,890.25
Year
2009
2010
2011
2012
140,000.00
Market Value of Equity
Shares
Outstanding
MV at BS Date
$
173,875,185
29.90
$
173,953,197
45.53
$
165,162,239
37.64
$
162,066,120
38.57
Working Capital
Current
Current Assets
Liabilities
Year
Factor
X1
X2
X3
X4
X5
2010
MV of Equity
$5,198,868,031.50
$7,920,089,059.41
$6,216,706,675.96
$6,250,890,248.40
Working Capital
2009 1,989,000.00
495,000.00
1,494,000.00
2010 2,165,000.00
596,000.00
1,569,000.00
2011 1,591,000.00
568,000.00
1,023,000.00
2012 1,758,000.00
618,000.00
1,140,000.00
2010
2011
Weight
1.2
1.4
3.3
0.6
0.999
Z-Score
2009
0.29
0.32
0.15
1.47
0.54
2.78
0.26
0.27
0.06
2.25
0.49
3.33
lxiii
165,000.00
2012
0.16
0.28
0.06
1.39
0.49
2.39
0.18
0.29
0.07
1.34
0.52
2.40
Table 16: Starwood’s Edward Altman Z-Score
INPUTS
2010
Working Capital
Total Assets
Total Liabilites
Revenue
EBIT
Retained Earnings
Market Value of
Equity
2011
456,000.00
9776000
7305000
5071000
561000
1947000
$
10,572,875.31
2012
542,000.00
9560000
6606000
5642000
630000
2337000
$
7,922,832.60
(110,000.00)
8861000
5724000
6321000
891000
2657000
$
9,296,112.64
Market Value of Equity
Year
Shares Outstanding
MV at BS Date
MV of Equity
$
2010 173,953,197
60.78
$10,572,875,313.66
$
2011 165,162,239
47.97
$ 7,922,832,604.83
$
2012 162,066,120
57.36
$ 9,296,112,643.20
Current
Liabilities
Working Capital
Working Capital
Year
Current Assets
2010 2,621,000.00
2,165,000.00
456,000.00
2011 2,534,000.00
1,992,000.00
542,000.00
2012 1,919,000.00
2,029,000.00
(110,000.00)
Factor
Weight
X1
X2
X3
X4
X5
1.2
1.4
3.3
0.6
0.999
Z-Score
2010
2011
0.06
0.28
0.19
0.87
0.52
1.91
lxiv
0.07
0.34
0.22
0.72
0.59
1.94
2012
0.01
0.42
0.33
0.97
0.71
2.42
Appendix N. Financial Tables
lxv
Table 17: Hyatt’s Financial Ratios
lxvi
Table 18: Marriott’s Financial Ratios
lxvii
Table 19: Wyndham’s Financial Ratios
lxviii
Table 20: Starwood’s Financial Ratios
lxix
Table 21: Diamond’s Financial Ratios
lxx
Appendix O. Historical Financial Trends
lxxi
Chart 13: Historical ROE Trend for Industry
ROE % (Net)
60
50
Percentage (%)
40
Hyatt
30
Marriott
20
Wyndham
10
Starwood
0
-10
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
Diamond
Industry
-20
-30
Year
Chart 14: Historical EBITDA Margin Trend for Industry
EBITDA Margin
0.03
Percentage (%)
0.025
Hyatt
0.02
Marriott
Wyndham
0.015
Starwood
0.01
Diamond
0.005
Industry
0
12/31/2008
12/31/2009
12/31/2010
Year
lxxii
12/31/2011
12/31/2012
Chart 15: Historical Debt to Equity Trend for Industry
Total Debt to Equity
4
2
0
Percentage (%)
12/31/2008
12/31/2009
12/31/2010
12/31/2011
12/31/2012
Hyatt
Marriott
-2
Wyndham
-4
Starwood
Diamond
-6
Industry
-8
-10
-12
Year
lxxiii
Appendix P. Hyatt’s Revenue, Expense and Net Income
lxxiv
Chart 16: Historical Cost of Revenue Trend for Hyatt and Starwood
Cost of Revenue/Revenue
0.45
Percent Cost of Revenue/Revenue
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
2010
2011
Years
Hyatt
Starwood
lxxv
2012
Chart 17: Historical Net Income Trend for Hyatt and Starwood
Net Income/ Revenue
0.10
0.09
0.08
Net Income/Revenue
0.07
0.06
0.05
0.04
0.03
0.02
0.01
2010
2011
Years
Hyatt
lxxvi
Starwood
2012
Chart 18: Historical SG&A Trend for Hyatt and Starwood
SG&A/Revenue
0.49
0.48
SG&A/ Revenue
0.47
0.46
0.45
0.44
0.43
0.42
2010
2011
Years
Hyatt
Starwood
lxxvii
2012
Chart 19: Historical Other Expense Trend for Hyatt and Starwood
Other Expense/Revenue
0.10
0.09
Other Expenses/Revenue
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
2010
2011
Years
Hyatt
lxxviii
Starwood
2012
Chart 20: Hyatt Revenue Breakdown 2012
2012 Revenue Breakdown
Other revenues from
managed properties,
39.07%
Owned and leased hotels,
51.18%
Other revenues, 1.98%
Management and
franchise fees, 7.77%
Chart 21: Hyatt Property Breakdown 2012
2012 Total Property
25%
31%
44%
Owned
Managed
lxxix
Franchised
Chart 22: Industry Market Share 2012
0.019
Current Market Share
0.145
0.233
Hyatt
Marriott
Wyndham
Starwood
Diamond
0.167
0.435
Chart 23: Post-Implementation Industry Market Share
0.019
Post Market Share
0.167
0.378
Hyatt
Marriott
Wyndham
Diamond
0.435
lxxx
Chart 24: Company Comparison 2012
14,000.00
2012 Company Comparison
12,000.00
Amount in Millions
10,000.00
8,000.00
Hyatt
Marriott
Wyndham
6,000.00
Starwood
Diamond
4,000.00
2,000.00
Total Revenues
Cost of Revenue
Net Income
Categories
lxxxi
Total Assets
Total Liabilites
Chart 25: Company Comparison 2011
2011 Company Comparison
14,000.00
12,000.00
Amount in Millions
10,000.00
Hyatt
8,000.00
Marriott
Wyndham
6,000.00
Starwood
Diamond
4,000.00
2,000.00
Total Revenues
Cost of
Revenue
Net Income
Categories
lxxxii
Total Assets
Total Liabilites
Chart 26: Company Comparison 2010
2010 Company Comparison
14,000.00
12,000.00
10,000.00
Amount in Millions
8,000.00
Hyatt
Marriott
Wyndham
6,000.00
Starwood
Diamond
4,000.00
2,000.00
Total Revenues Cost of Revenue
(2,000.00)
Net Income
Categories
lxxxiii
Total Assets
Total Liabilites
Table 22: Company Comparison 2012
Table 23: Company Comparison 2011
lxxxiv
Table 24: Company Comparison 2010
Chart 27: Industry Net Income/Revenue Comparison
Industry Net Income/Revenue
0.15
Net Income/Revnue
0.10
Hyatt
Marriott
0.05
Wyndham
Starwood
2010
2011
(0.05)
(0.10)
Years
lxxxv
2012
Diamond
Chart: 28: Industry Cost of Revenue/Revenue Comparison
Industry Cost of Revenue/Revenue
1.20
Cost of Revenue/Revenue
1.00
0.80
Hyatt
Marriott
0.60
Wyndham
Starwood
0.40
Diamond
0.20
0.00
2010
2011
Years
lxxxvi
2012
Chart 29: Hyatt Revenue, Expense and Net Income
Revenue, Expense and Net Income
4,500
4,000
3,500
Amount in Millions
3,000
2,500
2,000
1,500
1,000
500
2009
2,010
(500)
2011
Years
Revenue
Expenses
lxxxvii
Net Income
2012
Total Revenume
Chart 30: Hyatt Seasonality of Business Chart by quarter
Total Revenue (Millions)
1150
1100
1050
1000
950
900
850
800
750
700
Total Revenue (Millions)
Time (Quaters)
Chart 31: Hyatt Total Cost Breakdown
%Total Expense Trends
0.5
0.45
Owned and leased hotels
% of SG&A Costs
0.4
Depreciation and amortization
0.35
0.3
Other direct costs
0.25
0.2
Selling, general and admin.
0.15
Other costs from managed
properties
0.1
0.05
0
2009
2010
2011
Years
lxxxviii
2012
Appendix Q. QSPM
lxxxix
Table 25: QSPM – Expansion
xc
Table 26: QSPM – Roku vs. Netflix
xci
Table 27: QSPM – Pet Service vs. Baggage Fees
xcii
Table 28: QSPM – Car Service vs. Charter Flights
xciii
Appendix R. Grand Strategy Matrix
xciv
Chart 32: Grand Strategy Matrix
xcv
Appendix S. Net worth Assessment & Stock Price Projection
xcvi
Table 29: As-Is Hyatt Net Worth
Table 30: 1 Year – Hyatt Net Worth
xcvii
Table 31: 5 Year – Hyatt Net Worth
Table 32: As-Is Diamond Net Worth
xcviii
Table 33: As-Is Morgan Hotel Group Net Worth
xcix
Appendix T. EBIT Assessment
c
Table 34: EPS/EBIT Analysis
ci
Chart 33: EPS/EBIT Analysis
cii
Appendix U. Pro Forma
ciii
Table 35: As-Is Hyatt Income Statement
civ
Chart 34: As-Is Hyatt Revenue, Expense, and Net Income Chart with Projection
As-Is Revenue, Expense and Net Income Chart
5500
y = 13.5x2 + 135.3x + 3186.5
R² = 0.9973
U.S Dollars (In Millions)
4500
3500
y = 26.75x2 + 31.55x + 3229.3
R² = 0.9939
Revenue
Expenses
2500
Net Income
Poly. (Revenue)
1500
Poly. (Expenses)
500
-500
-1500
y=
2009
2010
2011
2012
2013
Years
cv
-33.5x2
2014
+ 211.5x - 221.5
R² = 0.9996
2015
2016
Poly. (Net Income)
Table 36: As-Is Hyatt Balance Sheet
cvi
Chart 35: As-Is Hyatt Balance Sheet Chart with Projection
cvii
Table 37: As-Is Hyatt Cash Flow Statement
cviii
Chart 36: As-Is Hyatt Cash Flow Statement Chart
cix
Table 38: As-Is Starwood Income Statement
cx
Table 39: As-Is Starwood Balance Sheet
cxi
Table 40: As-Is Starwood Cash Flow Statement
cxii
cxiii
Table 41: Pro-Forma Hyatt Income Statement
cxiv
Chart 37: Pro-Forma Hyatt Revenue, Expense, and Net Income Chart
cxv
Table 42: Pro-Forma Hyatt Cash Flow Statement
cxvi
Appendix V. Gantt Chart
cxvii
Chart 38: Gantt Chart
cxviii
cxix
Table 43: Estimated Costs of New Strategies
cxx
Table 44: Estimated Revenues of New Strategies
cxxi
Appendix W. Balance Scorecard
cxxii
Table 45: Balance Score Card
Hyatt Hotels Corporation
Balance Score Card – Growth
Growth Metrics
Objective TypeGrowth
Measure
Targets
Responsible Party
Timeline
Market
Penetration
Number of young
business
professionals
Increase by 50%
Global Head Marketing and
Branding
End of 2017
Market Share
Number of locations
previously owned by
competitors
Increase through
acquiring
competitors
CEO
Market Share
Expansion
Number of total
global locations
Increase by 100%
CEO
End of 2018
Market Share
Expansion
Number of locations
in new countries
Increase of 10% of
total locations
CEO
End of 2020
cxxiii
Hyatt Hotels Corporation
Balance Score Card - Global Company Culture
Global Company Culture Metrics
Objective TypeCulture
Measure
Targets
Responsible Party
Timeline
Culture
Corporate culture
Increased
satisfaction from
top level execs
CEO
End of 2016
Culture
Employee
satisfaction
Increased
satisfaction of
employees
Regional Managers
End of 2016
Turnover
Turnover Rate
Decrease by 20%
CEO/Regional
Managers
End of 2016
cxxiv
Hyatt Hotels Corporation
Balance Score Card – Marketing
Marketing Metrics
Objective TypeMarketing
Measure
Targets
Responsible Party
Timeline
Brand Awareness
Company
Recognition
Number one hotel
that customers
think of when
planning their
travelling
Global Head Marketing and
Branding
End of 2016
Channel
Optimization
Brand Improvement
Improve rating on
3rd party booking
sights
Global Head Marketing and
Branding
End of 2014
Internet Marketing Hotel Deals
Target 3rd party
booking sights
with low review
Global Head Marketing and
Branding
End of 2014
Internet Marketing Web Site
Increase number of
hits by 40%
Global Head Marketing and
Branding, EVP's of
operations
End of 2016
cxxv
Hyatt Hotels Corporation
Balance Score Card – Customer
Customer Metrics
Objective Type Customer
Measure
Targets
Responsible Party
Timeline
Acquire
Customers
Number of new
customers entering
market
40% customer
increase
Global Head Marketing and
Branding
End of 2016
Retain Current
Customers
Number of active
customers
95% customer
retention
Global Head Marketing and
Branding
End of 2016
Customer
Satisfaction
Customer
satisfaction
percentage
measured by
surveys
Increase
satisfaction by 75%
Regional
Management
End of 2016
Market Share
Number of major
business customers
Increase by 20%
Global Head Marketing and
Branding
End of 2016
Market Share
Number of major
luxury customers
Increase by 10%
Global Head Marketing and
Branding
End of 2017
Customer
Satisfaction
Customer
satisfaction
percentage
measured by
surveys
Increase
satisfaction by 75%
Regional
Management
End of 2016
Customer
Satisfaction
Number of
complaints
Decrease the
number of
complaints by 75%
Regional
Management
End of 2016
Customer
Satisfaction
Recommendation
Increase likelihood
that customers
recommend Hyatt
for travelers and
business
professionals
Global Head Marketing and
Branding
End of 2016
cxxvi
Customer
Satisfaction
Recommendation
Increase extended
stay customers with
additional
accommodations
Regional
Management
End of 2016
Customer
Satisfaction
Expand Into China
Increase location
for guests with
expansion
Global Head Marketing and
Branding
End of 2018
Customer
Satisfaction
Expand Into India
Increase location
for guests with
expansion
Global Head Marketing and
Branding
End of 2018
cxxvii
Appendix X. Location Review
cxxviii
Figure 20: Location Analysis – Hyatt
cxxix
Figure 21: Location Analysis – Starwood
cxxx