hospitalitystyle.com

(February 2011) posted on Tue Feb 15, 2011 EST

Move involves 71 complexes

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Marriott International Inc. has unveiled plans to split its businesses into two separate, publicly traded companies. The hotel giant said it expects to spin off its timeshare operations and development business through a special tax-free dividend to Marriott International shareholders late this year.

Under the plan, the new, as-yet unnamed company will focus on the timeshare business as the exclusive developer and operator of timeshare, fractional and related products under the Marriott brand and the exclusive developer of fractional and related products under the Ritz-Carlton brand. After the split, Marriott International will concentrate on the lodging management and franchise business. Marriott will also receive franchise fees from the timeshare company's use of the Marriott and Ritz-Carlton brands.

“This transaction will permit both companies to tailor their business strategies to best address market opportunities in their respective industries,” said chairman and chief executive officer, J.W. Marriott Jr. “The new timeshare company will be positioned to expand faster over time while Marriott International will further advance its longstanding strategy of separating real estate from management and franchise operations. With two public companies, shareholders will be able to pursue investment goals in either or both companies rather than one combined organization.”

At year-end 2010, Marriott International's timeshare segment operated 71 timeshare and fractional resorts with more than 400,000 owners and approximately 10,000 employees. In 2010, the timeshare segment reported revenue of approximately $1.5 billion (unadjusted for specific terms of the transaction).

Marriott disclosed plans for the spinoff in conjunction with reporting its 2010 financial results. For the year, the company reported an adjusted net income of $435 million, a 27 percent increase from 2009. Its 2010 revenues totaled $11.7 billion, up from $10.9 billion a year earlier.