Marriot Case

Q1 � Why is Marriott management proposing project Chariot? What is it trying to

accomplish?

Reasons for proposing Project Chariot

Economic slowdown in the late 1980�s and the 1990 real estate market crash, led MC
with a huge massive debt.
There were huge interest payment on properties which it was not able to sell as
there were no buyers
Ability to raise funds in the capital markets in near future were severely limited.
The tax reform act,1986 had paused most of the tax incentives for real estate
investment. This brought down the MC capital.
As the year end stock price fell by more than two thirds, Market capitalization of
MC slump over $2bio, and went bankrupt
To overcome this gloomy scenario, restructuring the business model was essential to
gain financial strength and to
raise the funds in the capital markets. Hence, project chariot was proposed.

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