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Time - Man of the Year
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Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso
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1993-04-08
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THE WEEK, Page 22BUSINESSHospitality Split
The Marriott hotel company separates its winners from its losers
Tips are not uncommon in the hotel business. But few are as
generous as the one Marriott shareholders received last week. In
a financial maneuver that is part of a growing trend, Marriott
Corp. said it would spin off its thriving hotel-management
division from its debt-laden real estate operations and would
award stockholders special tax-free shares in the new company.
A number of firms, most recently Sears, that had caught
diversification fever during the 1980s are now scrambling to
sell ill-fitting or troublesome units.
The move at Marriott was triggered largely by its
management's bleak assessment of its money-losing real-estate
business. Under the plan, Marriott will split into two separate,
publicly traded entities by mid-1993. The healthier operations
will be reorganized as Marriott International, a company that
will concentrate on operating hotels, resorts and food services.
Meanwhile, the successor firm, to be renamed Host Marriott, will
retain ownership of the 141 lodging properties and 16 retirement
communities, plus airport and toll-road concessions. Host
Marriott, whose businesses generated 19% of the existing
corporation's 1991 revenues of $9.1 billion, will also assume
practically all the existing company's $2.9 billion debt load.