Hotel Online  Special Report

..

Marriott International, Inc. Reports 2nd Qtr Earnings of
$125 million Compared with $129 million a Year Earlier;
North American RevPAR Decreases 5%
Key Lodging Statistics

 
WASHINGTON, July 17, 2003 - Marriott International, Inc.  (NYSE: MAR) today reported diluted earnings per share from continuing operations of $0.52 in the second quarter of 2003, up 6 percent from the 2002 second quarter.  Income from continuing operations, net of taxes, for the quarter was $126 million, essentially flat with $127 million for the year ago quarter.  Synthetic fuel operations contributed approximately $26 million after-tax ($0.11 per share) during the second quarter of 2003 compared to $15 million after-tax ($0.06 per share) a year ago.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said, "We are pleased with the strength of our second quarter results and balance sheet, especially in light of lower worldwide lodging demand during the quarter due to the Iraqi war, Severe Acute Respiratory Syndrome (SARS) and the global economic slowdown.  We continue to have considerable success in protecting hotel profitability with meaningful productivity improvements and specific action plans for each hotel.  Our hotel house profit margins in the second quarter declined less than they did in the first quarter, despite a larger decline in revenue per available room (REVPAR).  Also, we completed several product enhancements during the quarter, including the industry-leading rollout of wireless high-speed Internet access at 400 hotels, as well as enhancements to our Marriott Rewards frequent guest program.
    
"Our global rooms growth continues to be on track.  With our partners, we added 7,449 rooms to our system in the second quarter.  We often see more conversion activity to our brands during challenging times, as hotel owners and franchisees select the strongest performing brands, and the second quarter was no exception.  More than half of the new rooms in the second quarter were conversions of existing hotels to one of our brands and more than one-third of our room additions were outside the U.S.  Our pipeline of properties under construction, awaiting conversion, or approved for development totals nearly 50,000 rooms worldwide."
    
MARRIOTT LODGING profits totaled $175 million during the second quarter of 2003, down 9 percent from the prior year, primarily reflecting the weaker lodging demand environment in both the U.S. and abroad, offset somewhat by higher timeshare profits.  Base management and franchise fees were $144 million, roughly the same as a year ago, as new fees from unit growth offset the effect of lower comparable room revenues.  Incentive management fees declined $24 million during the quarter to $28 million as lower REVPAR and house profit margins reduced profitability at the unit level, particularly in the U.S. and Asia.
    
For the 2003 second quarter (12 weeks ended June 20, 2003), REVPAR for comparable systemwide North American hotels decreased by 5.0 percent, while REVPAR for comparable company-operated North American properties decreased by 6.2 percent, driven by lower occupancy and lower average room rates.  REVPAR at full-service hotels (including Marriott Hotels & Resorts, The Ritz-Carlton, and Renaissance Hotels & Resorts) declined 6.1 percent and 6.4 percent in the quarter for systemwide and managed comparable hotels, respectively, while REVPAR for select-service and extended-stay brands (including Courtyard, Fairfield Inn, Residence Inn, TownePlace Suites, and SpringHill Suites) posted a REVPAR decrease of 3.6 percent and 5.5 percent, respectively.
    
Our second quarter profits for international lodging reflected the dramatic impact of SARS and the war in Iraq, with REVPAR down 13.8 percent on a constant dollar basis, driven entirely by occupancy declines.  Asia Pacific occupancy rates declined more than 20 percentage points.  The Caribbean and Latin America enjoyed strong leisure demand, resulting in an 8.0 percent increase in REVPAR in that region during the quarter.
    
Marriott's timeshare business reported seven percent growth in contract sales in the second quarter.  Contract sales were strong at timeshare resorts in Aruba, Hawaii, and St. Thomas, while resorts in Orlando and Lake Tahoe reported lower contract sales than a year ago.  Profits in the timeshare business increased to $44 million in the quarter, due to higher timeshare note sale gains.  The timeshare note sale gain in the second quarter was $32 million versus $15 million in the year ago quarter.  Year-to-date, timeshare note sale gains were $32 million in 2003 compared to $28 million in the first half of 2002.
    
We added 55 hotels and timeshare resorts (7,449 rooms) to our worldwide lodging portfolio during the second quarter, while four hotels (1,327 rooms) exited the system.  Seven Marriott Hotels & Resorts (2,430 rooms) opened during the quarter, including the Seattle Waterfront Marriott and the St. Kitts Marriott.  Two Ritz-Carlton hotels (294 rooms), seven Courtyards (856 rooms), five Residence Inns (726 rooms), four SpringHill Suites (634 rooms), and eight Fairfield Inns (616 rooms) also opened during this period.  Twenty-one hotels (1,795 rooms) were converted to our Ramada International brand during the second quarter, including 16 hotels (1,092 rooms) in Sweden.  At the end of the second quarter, our lodging group encompassed 2,640 hotels and timeshare resorts (477,397 rooms).
    
CORPORATE EXPENSES were $24 million in the second quarter of 2003 compared to $23 million a year ago.  Interest expense in the quarter was $25 million, up $4 million from a year ago, primarily because lower levels of investment spending reduced the amount of capitalized interest.
    
At the end of the second quarter, total debt (including debt associated with discontinued operations) was $1.7 billion and cash balances totaled $144 million compared to $2.2 billion of debt and $525 million of cash at March 28, 2003. We owned and operated eight hotels at the end of the quarter.
    
We repurchased 1.1 million shares of common stock during the second quarter at a total cost of $40 million and have repurchased approximately 6.1 million shares year to date in 2003.  Currently, our remaining share authorization totals approximately 17 million shares.  We continue to expect to spend approximately $400 million buying our common stock in 2003.
    
We completed the sale of two hotels, subject to long-term operating agreements, for $108 million during the second quarter.  Early in the third quarter, we sold another hotel for $39 million, subject to a long-term operating agreement, as well as a 50 percent interest in our synthetic fuel business for $25 million.  Also, we will receive additional profits over the life of the synthetic fuel joint venture based on the amount of tax credits produced and allocated to the purchaser.
    
The sale of the 50 percent interest in our synthetic fuel business had been subject to certain closing conditions, including the receipt of a satisfactory private letter ruling from the Internal Revenue Service regarding the new ownership structure.  In April 2003, the IRS instituted a "temporary pause" in issuing private letter rulings and has not provided any guidance as to when such issuances might resume.  Marriott and the purchaser decided to close on this transaction prior to receipt of a new private letter ruling.  However, in the event that a private letter ruling is not obtained by December 15, 2003, the purchaser will have a onetime right to return its ownership interest to Marriott.  We believe that the exercise of this right would have no impact on Marriott's earnings in 2003.  Given the presence of the onetime right, we expect to consolidate the joint venture for accounting purposes until the right expires.  Thereafter, if the right is not exercised, we will use equity method accounting.
    
We closed our distribution services business in 2002 and completed the sale of our senior living business in the 2003 first quarter.  Therefore, we show the financial results for those businesses as discontinued operations for 2002 and 2003.  Losses per share from discontinued operations were $0.01 in the second quarter of 2003 versus earnings of $0.01 a year ago.
    
OUTLOOK
    
While lodging demand has generally returned to levels experienced prior to the war in Iraq, it continues to be very difficult to forecast future performance.  Although there are some signs of an improving economic climate in the United States, we have not yet seen clear indications of a meaningful rebound in REVPAR and profits.  We believe the impact of an improving economy on the lodging business is likely to lag by roughly two quarters.  Therefore, we believe it is prudent at this point to estimate that REVPAR in the third quarter will decline between three percent and zero percent and average hotel house profit margins will decline between one to three percentage points.  We estimate lodging profits will total $135 million to $140 million in the 2003 third quarter, including estimated timeshare profits of $23 million to $27 million.  Including approximately $0.09 to $0.10 in after-tax earnings per share from our synthetic fuel operations, we anticipate that earnings per share from continuing operations will total $0.35 to $0.39 per share in the third quarter.

For the 2003 fourth quarter, assuming REVPAR performance of between a two percent decline and two percent growth and an average house profit margin decline of between two percentage points and zero, completion of a timeshare mortgage note sale transaction, and $0.06 to $0.08 of after-tax earnings per share from our synthetic fuel business, we estimate diluted earnings per share from continuing operations will range from $0.57 to $0.61.
    
Under these assumptions, we estimate 2003 full year earnings per share from continuing operations, including synthetic fuel, to range from $1.80 to $1.88.
    
We expect to add approximately 30,000 hotel rooms in 2003, including the third quarter opening of the Grande Lakes Orlando resort, which has a 1,000 room J.W. Marriott hotel and a 584 room Ritz-Carlton hotel.  In 2004, we anticipate adding 25,000 to 30,000 new rooms to our worldwide lodging portfolio.
    
We expect investment spending in 2003 to include approximately $75 million for maintenance capital spending and approximately $100 million to $125 million for new company-developed hotels.  We anticipate timeshare investment spending to total approximately $175 million to $200 million.  We also expect to invest approximately $200 million in equity slivers, mezzanine financing and mortgage loans for hotels developed by our partners.  We expect that total investment spending in 2003 will be roughly $550 million to $600 million.
    
 

MARRIOTT INTERNATIONAL, INC.
Financial Highlights
(in millions, except per share amounts)

                                      12 Weeks Ended         12 Weeks Ended
                                          June 20, 2003          June 14, 2002
                                          ----------------------  --------------------
                                                                                                Percent
                                           Synthetic                   Synthetic        Better/
                                               Fuel                        Fuel             (worse)
                                  Lodging         Total      Lodging        Total
                                          -------  ----   -----  -------  ----  ----- -----
    SALES
    Base management fees      $88     $-     $88      $91    $-    $91
    Franchise fees          56      -      56       54     -     54
    Incentive management
     fees                      28      -      28       52     -     52
    Owned and leased
     properties                87      -      87       96     -     96
    Other lodging
     revenue(1)               314      -     314      345     -    345
    Cost reimbursements(2)  1,402      -   1,402    1,343     -  1,343
    Synthetic Fuel              -     63      63        -    53     53
                                    -----  -----   -----    -----   ---  -----
       Total Revenues       1,975     63   2,038    1,981    53  2,034
                                     -----  -----   -----    -----   ---  -----

    OPERATING COSTS
     AND EXPENSES
    Owned and leased -
     direct(3)                 89      -      89       89     -     89
    Other lodging -
     direct(4)                265      -     265      287     -    287
    Reimbursed costs        1,402      -   1,402    1,343     -  1,343
    Administrative
     and other(5)              44      -      44       70     -     70
    Synthetic Fuel              -    105     105        -    96     96
                            -----  -----   -----    -----   ---  -----
       Total Expenses       1,800    105   1,905    1,789    96  1,885
                            -----  -----   -----    -----   ---  -----
    Segment Financial
     Results                 $175   $(42)    133     $192  $(43)   149    (11)
                            =====  =====            =====   ===

    Corporate expenses                       (24)                  (23)
    Interest expense                         (25)                  (21)
    Interest income                           27                    28
    Provision for
     loan losses                              (1)                    -
                                           -----                 -----
    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     INCOME TAXES                            110                   133
    Benefit (Provision) for
     income taxes                             16                    (6)
    INCOME FROM CONTINUING                 -----                 -----
     OPERATIONS                              126                   127     (1)

    Discontinued operations
    Senior Living Services
    Income from discontinued
    operations, net of tax                     1                     3
    Loss on disposal,
     net of tax                               (2)                    -
    Marriott Distribution
     Services
    Loss from discontinued
     operations,
     net of tax                                -                    (1)

    NET INCOME                              $125                  $129     (3)
                                           =====                 =====
    EARNINGS PER SHARE -
     Basic
       Earnings from
        continuing
        operations                         $0.54                 $0.52      4
       Earnings from
        discontinued
        operations                             -                  0.01      *
                                           -----                 -----
       Earnings per share                  $0.54                 $0.53      2
                                           =====                 =====

    EARNINGS PER SHARE -
     Diluted
       Earnings from
        continuing
        operations                         $0.52                 $0.49      6
       (Loss) earnings
        from discontinued
        operations                         (0.01)                 0.01      *
                                           -----                 -----
       Earnings per share                  $0.51                 $0.50      2
                                           =====                 =====

    Basic Shares                           232.3                 242.8
    Diluted Shares                         244.3                 259.8

    *  Calculated percentage is not meaningful.

    (1) Other lodging revenue includes timeshare revenue (including note sale
        gains and excluding base management fees and reimbursed costs),
        ExecuStay revenue, land rent income, and other revenue.
    (2) Cost reimbursements include reimbursements for Marriott funded
        operating expenses. Marriott earns no markup on these expenses.
    (3) Owned and leased - direct expenses include operating expenses of
        owned or leased hotels including lease payments, pre-opening expenses
        and depreciation.
    (4) Other lodging - direct expenses include administrative and related
        expenses of the time share(including timeshare development, financing
        and joint venture results, but excluding reimbursed costs) and
        ExecuStay business units.
    (5) Administrative and other expenses include lodging segment overhead,
        joint venture results, amortization, and gains and losses.  Does not
        include any administrative and other expenses related to either the
        time share or ExecuStay business units.
 

                         MARRIOTT INTERNATIONAL, INC.
                             Financial Highlights
                   (in millions, except per share amounts)

                                24 Weeks Ended          24 Weeks Ended
                                 June 20, 2003          June 14, 2002
                           ----------------------  --------------------
                                                                       Percent
                                   Synthetic              Synthetic    Better/
                                     Fuel                   Fuel       (worse)
                            Lodging         Total  Lodging        Total
                            -------  ----   -----  -------  ----  ----- -----
    SALES
    Base management fees     $180     $-     $180    $176    $-   $176
    Franchise fees            108      -      108     105     -    105
    Incentive management
     fees                      57      -       57      84     -     84
    Owned and leased
     properties               176      -      176     189     -    189
    Other lodging
     revenue(1)               590      -      590     625     -    625
    Cost reimbursements(2)  2,810      -    2,810   2,605     -  2,605
    Synthetic Fuel              -    131      131       -    58     58
                            -----  -----    -----   -----   ---  -----
       Total Revenues       3,921    131    4,052   3,784    58  3,842

    OPERATING COSTS
     AND EXPENSES
    Owned and leased -
     direct(3)                178      -      178     180     -    180
    Other lodging -
     direct(4)                515      -      515     527     -    527
    Reimbursed costs        2,810      -    2,810   2,605     -  2,605
    Administrative
     and other(5)              96      -       96     127     -    127
    Synthetic Fuel              -    232      232       -   107    107
                            -----  -----    -----   -----   ---  -----
       Total Expenses       3,599    232    3,831   3,439   107  3,546
                            -----  -----    -----   -----   ---  -----
    Segment Financial
     Results                 $322  $(101)    $221    $345  $(49)  $296    (25)
                            =====  =====    =====   =====   ===  =====

    Corporate expenses                        (54)                 (52)
    Interest expense                          (51)                 (40)
    Interest income                            47                   47
    Provision for
     loan losses                               (6)                   -
                                            -----                -----

    INCOME FROM CONTINUING
     OPERATIONS BEFORE
     INCOME TAXES                             157                  251
    Benefit (Provision) for
     income taxes                              56                  (42)
    INCOME FROM CONTINUING                  -----                -----
     OPERATIONS                               213                  209      2

    Discontinued operations
    Senior Living Services
    Income from discontinued
    operations, net of tax                      8                    7
    Gain on disposal,
     net of tax                                21                    -
    Marriott Distribution
     Services
    Loss from discontinued
     operations,
     net of tax                                 -                   (5)
    Exit costs, net of tax                     (1)                   -
                                            -----                -----

    NET INCOME                               $241                 $211     14
                                            =====                =====

    EARNINGS PER SHARE -
     Basic
       Earnings from
        continuing
        operations                          $0.91                $0.86      6
       Earnings from
        discontinued
        operations                           0.12                 0.01      *
                                            -----                -----
       Earnings per share                   $1.03                $0.87     18
                                            =====                =====

    EARNINGS PER SHARE -
     Diluted
       Earnings from
        continuing
        operations                          $0.87                $0.81      7
       Earnings from
        discontinued
        operations                           0.12                 0.01      *
                                            -----                -----
       Earnings per share                   $0.99                $0.82     21
                                            =====                =====

    Basic Shares                            233.1                242.4
    Diluted Shares                          243.9                260.4

    *  Calculated percentage is not meaningful.

    (1) Other lodging revenue includes timeshare revenue (including note sale
        gains and excluding base management fees and reimbursed costs),
        ExecuStay revenue, land rent income, and other revenue.
    (2) Cost reimbursements include reimbursements for Marriott funded
        operating expenses.  Marriott earns no markup on these expenses.
    (3) Owned and leased - direct expenses include operating expenses of owned
        or leased hotels including lease payments, pre-opening expenses and
        depreciation.
    (4) Other lodging - direct expenses include administrative and related
        expenses of the timeshare (including timeshare development, financing
        and joint venture results, but excluding reimbursed costs) and
        ExecuStay business units.
    (5) Administrative and other expenses include lodging segment overhead,
        joint venture results, amortization, and gains and losses.  Does not
        include any administrative and other expenses related to either the
        timeshare or ExecuStay business units.
 
 

MARRIOTT INTERNATIONAL, INC.
Business Segments
 ($ in millions)

                                                     Twelve weeks ended
                                                ------------------------------
                                                June 20, 2003    June 14, 2002
                                                -------------    -------------
    SALES

    Full-Service                               $     1,323       $     1,299
    Select-Service                                     229               238
    Timeshare                                          293               296
    Extended-Stay                                      130               148
                                               -----------       -----------
       Total Lodging                                 1,975             1,981
    Synthetic Fuel                                      63                53
                                               -----------       -----------
       Total                                   $     2,038       $     2,034
                                               ===========       ===========

    SEGMENT FINANCIAL RESULTS

    Full-Service                               $        87       $       103
    Select-Service                                      29                40
    Timeshare                                           44                39
    Extended-Stay                                       15                10
                                               -----------       -----------
       Total Lodging                                   175               192
    Synthetic Fuel                                     (42)              (43)
                                               -----------       -----------
       Total                                   $       133       $       149
                                               ===========       ===========

    -------------------------------------------------------------------------

                                                   Twenty-four weeks ended
                                                ------------------------------
                                                June 20, 2003    June 14, 2002
                                                -------------    -------------
    SALES

    Full-Service                               $     2,644       $     2,520
    Select-Service                                     463               445
    Timeshare                                          560               550
    Extended-Stay                                      254               269
                                               -----------       -----------
       Total Lodging                                 3,921             3,784
    Synthetic Fuel                                     131                58
                                               -----------       -----------
       Total                                   $     4,052       $     3,842
                                               ===========       ===========

    SEGMENT FINANCIAL RESULTS

    Full-Service                               $       182       $       189
    Select-Service                                      53                68
    Timeshare                                           62                70
    Extended-Stay                                       25                18
                                               -----------       -----------
       Total Lodging                                   322               345
    Synthetic Fuel                                    (101)              (49)
                                               -----------       -----------
       Total                                   $       221       $       296
                                               ===========       ===========
 
 

                         MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS

                             Second Quarter 2003

                Company-Operated North American Properties(1)
    --------------------------------------------------------------------------

                                    12 Weeks Ended    vs.    12 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Brand                 2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels &
     Resorts             $97.32   -6.8%     70.7%  -2.7% pts.  $137.73   -3.3%
    The Ritz-Carlton    $168.30   -5.3%     67.2%  -3.2% pts.  $250.38   -0.7%
    Renaissance Hotels
     & Resorts           $90.82   -5.7%     67.2%  -2.0% pts.  $135.14   -2.9%
    Composite -
     Full-Service       $103.94   -6.4%     69.8%  -2.6% pts.  $148.92   -2.9%
    Residence Inn        $75.82   -4.3%     79.6%  -0.6% pts.   $95.26   -3.6%
    Courtyard            $64.98   -6.7%     70.0%  -2.9% pts.   $92.82   -2.8%
    TownePlace Suites    $45.03   -1.9%     70.9%  -4.0% pts.   $63.50    3.7%
    Composite -
     Select-Service
     & Extended-Stay     $65.82   -5.5%     72.4%  -2.3% pts.   $90.88   -2.5%
    Composite - All      $90.51   -6.2%     70.7%  -2.5% pts.  $127.98   -2.8%
 

                North American Comparable Systemwide Properties(1)
    --------------------------------------------------------------------------

                                    12 Weeks Ended    vs.    12 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Brand                 2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels &
     Resorts             $89.78   -6.4%     68.9%  -2.3% pts.  $130.24   -3.2%
    The Ritz-Carlton    $168.30   -5.3%     67.2%  -3.2% pts.  $250.38   -0.7%
    Renaissance Hotels
     & Resorts           $84.27   -4.9%     66.7%  -1.0% pts.  $126.42   -3.5%
    Composite -
     Full-Service        $94.86   -6.1%     68.5%  -2.2% pts.  $138.51   -3.1%
    Residence Inn        $73.47   -3.2%     78.4%  -0.3% pts.   $93.66   -2.8%
    Courtyard            $65.88   -4.9%     71.1%  -2.0% pts.   $92.67   -2.3%
    Fairfield Inn        $43.25   -2.7%     66.9%  -1.7% pts.   $64.66   -0.3%
    TownePlace Suites    $45.47   -1.6%     71.7%  -1.9% pts.   $63.43    0.9%
    SpringHill Suites    $57.05   -0.3%     70.8%  -0.9% pts.   $80.55    1.0%
    Composite -
     Select-Service
     & Extended-Stay     $60.07   -3.6%     71.8%  -1.5% pts.   $83.69   -1.7%
    Composite - All      $75.51   -5.0%     70.3%  -1.8% pts.  $107.40   -2.6%
 

                                Year-to-Date 2003

                   Company-Operated North American Properties(1)
    --------------------------------------------------------------------------

                                    24 Weeks Ended    vs.    24 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Brand                 2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels &
     Resorts             $96.18   -4.6%     69.5%  -1.5% pts.  $138.46   -2.5%
    The Ritz-Carlton    $165.72   -3.7%     65.7%  -2.8% pts.  $252.28    0.4%
    Renaissance Hotels
     & Resorts           $88.80   -2.9%     66.1%  -0.3% pts.  $134.24   -2.4%
    Composite -
     Full-Service       $101.29   -4.2%     68.6%  -1.4% pts.  $147.56   -2.2%
    Residence Inn        $74.56   -3.3%     77.6%  -0.2% pts.   $96.13   -3.1%
    Courtyard            $63.55   -3.7%     67.9%  -1.1% pts.   $93.53   -2.2%
    TownePlace Suites    $42.80   -3.0%     67.7%  -5.3% pts.   $63.19    4.6%
    Composite -
     Select-Service
     & Extended-Stay     $64.24   -3.2%     70.1%  -1.0% pts.   $91.59   -1.9%
    Total North America  $88.08   -4.0%     69.2%  -1.3% pts.  $127.32   -2.2%
 
 

                North American Comparable Systemwide Properties(1)
    --------------------------------------------------------------------------

                                    24 Weeks Ended    vs.    24 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Brand                 2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Marriott Hotels &
     Resorts             $88.88   -4.2%     67.9%  -1.0% pts.  $130.99   -2.8%
    The Ritz-Carlton    $165.72   -3.7%     65.7%  -2.8% pts.  $252.28    0.4%
    Renaissance Hotels
     & Resorts           $81.76   -2.0%     64.8%   0.5% pts.  $126.18   -2.8%
    Composite -
     Full-Service        $92.63   -3.9%     67.3%  -0.9% pts.  $137.68   -2.6%
    Residence Inn        $71.85   -2.1%     76.3%   0.3% pts.   $94.21   -2.4%
    Courtyard            $64.08   -2.3%     68.9%  -0.5% pts.   $93.05   -1.7%
    Fairfield Inn        $40.65   -0.5%     63.4%  -0.5% pts.   $64.11    0.2%
    TownePlace Suites    $43.91   -1.5%     69.1%  -1.8% pts.   $63.54    1.0%
    SpringHill Suites    $55.63    2.7%     68.6%   0.9% pts.   $81.12    1.4%
    Composite -
     Select-Service
     & Extended-Stay     $58.13   -1.6%     69.2%  -0.3% pts.   $84.00   -1.2%
    Total North America  $73.33   -2.9%     68.4%  -0.6% pts.  $107.29   -2.1%

    (1) Composite - All statistics include properties for the Marriott Hotels
        & Resorts, Renaissance Hotels & Resorts, The Ritz-Carlton, Courtyard,
        Residence Inn, TownePlace Suites, Fairfield Inn, and SpringHill Suites
        brands. Select-Service and Extended-Stay composite statistics include
        properties for the Courtyard, Residence Inn, TownePlace Suites,
        Fairfield Inn and SpringHill Suites brands.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                            KEY LODGING STATISTICS

                             Second Quarter 2003

                 Company-Operated International Properties(1)
    --------------------------------------------------------------------------

                                    12 Weeks Ended    vs.    12 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Region                2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America             $90.27    8.0%     68.2%   2.8% pts.  $132.33    3.5%
    Continental Europe   $76.46  -11.0%     65.6%  -2.6% pts.  $116.51   -7.4%
    United Kingdom       $99.62  -11.4%     69.2%  -8.3% pts.  $143.93   -0.9%
    Middle East &
     Africa              $33.39  -19.1%     48.9% -14.3% pts.   $68.27    4.5%
    Asia Pacific(2)      $40.76  -35.7%     50.1% -22.2% pts.   $81.28   -7.3%

    Total International  $66.71  -13.8%     60.0%  -9.4% pts.  $111.16   -0.2%
 

                 International Comparable Systemwide Properties(1)
    --------------------------------------------------------------------------

                                    12 Weeks Ended    vs.    12 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Region                2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America             $84.90    5.7%     66.4%   2.1% pts.  $127.87    2.4%
    Continental Europe   $73.83  -10.3%     61.9%  -3.4% pts.  $119.19   -5.4%
    United Kingdom       $82.49   -8.7%     68.4%  -3.2% pts.  $120.65   -4.4%
    Middle East &
     Africa              $33.01  -14.2%     48.4% -10.7% pts.   $68.19    4.7%
    Asia Pacific(2)      $48.49  -28.3%     55.0% -19.2% pts.   $88.18   -3.4%

    Total International  $68.67  -11.6%     61.3%  -7.8% pts.  $112.00   -0.4%
 
 

                                Year-to-Date 2003

                    Company-Operated International Properties(1)
    --------------------------------------------------------------------------

                                    24 Weeks Ended    vs.    24 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Region                2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America             $95.10   10.7%     68.8%   4.2% pts.  $138.29    3.9%
    Continental Europe   $72.19   -8.6%     62.4%  -1.6% pts.  $115.67   -6.3%
    United Kingdom       $99.18   -9.2%     68.6%  -7.0% pts.  $144.57    0.2%
    Middle East &
     Africa              $40.62   -2.0%     57.0%  -4.3% pts.   $71.30    5.4%
    Asia Pacific(2)      $47.83  -18.4%     58.1% -10.9% pts.   $82.29   -3.1%

    Total International  $69.46   -5.8%     62.5%  -4.0% pts.  $111.07    0.1%
 

                 International Comparable Systemwide Properties(1)
    --------------------------------------------------------------------------

                                    24 Weeks Ended    vs.    24 Weeks Ended
                                    June 20, 2003            June 14, 2002
                              ------------------------------------------------
                              REVPAR         Occupancy      Average Daily Rate
                              ------         ---------      ------------------
    Region                2003 vs. 2002      2003 vs. 2002      2003 vs. 2002
    --------------------------------------------------------------------------
    Caribbean & Latin
     America             $88.52    9.9%     66.3%   3.7% pts.  $133.60    3.8%
    Continental Europe   $69.25   -7.6%     59.0%  -2.2% pts.  $117.35   -4.2%
    United Kingdom       $79.30   -8.9%     65.4%  -3.1% pts.  $121.17   -4.6%
    Middle East &
     Africa              $39.98    1.9%     56.3%  -1.9% pts.   $71.02    5.4%
    Asia Pacific(2)      $54.52  -14.2%     61.4%  -9.5% pts.   $88.83   -0.9%

    Total International  $69.82   -5.5%     62.4%  -3.5% pts.  $111.82   -0.1%
 

    (1) Statistics are in constant dollars and include results for January
        through May.  Excludes North America.
    (2) Excludes Hawaii.
 
 

                         MARRIOTT INTERNATIONAL, INC.

                          Total Lodging Products(1)
    ------------------------------------------------------------------------
                                           Number of          Number of
                                          Properties         Rooms/Suites
                                        June   vs. June    June     vs. June
                                         20,      14,       20,        14,
    Brand                               2003     2002      2003       2002
    --------------------------------   --------------------------------------

    Full-Service Lodging
        Marriott Hotels & Resorts        465      +32     170,537    +9,997
        The Ritz-Carlton                  54       +6      17,210    +1,306
        Renaissance Hotels & Resorts     126       +2      45,584      +295
        Ramada International             171      +33      23,769    +3,689
    Select-Service Lodging
        Courtyard                        599      +30      85,964    +4,337
        Fairfield Inn                    516      +22      49,366    +2,002
        SpringHill Suites                103       +9      12,002    +1,256
    Extended-Stay Lodging
        Residence Inn                    436      +38      51,879    +4,947
        TownePlace Suites                106       +5      10,899      +459
        Marriott Executive Apartments     12        -       2,167       +99
    Timeshare
        Marriott Vacation Club
         International                    44       (1)      7,336      +810
        Horizons by Marriott Vacation
         Club International                2        -         212       +66
        The Ritz-Carlton Club              4        -         224       +81
        Marriott Grand Residence Club      2       +1         248       +49
                                      ----------------   -------------------
    Total                              2,640     +177     477,397   +29,393
                                      ================   ===================

    (1) Total Lodging Products excludes the 3,892 ExecuStay rental units.
 
 

                         MARRIOTT INTERNATIONAL, INC.
                  Non-GAAP Financial Measure Reconciliation
                   (in millions, except per share amounts)

                             Second Quarter 2003

     The reconciliation of the effective income tax rate from continuing
     operations to the effective income tax rate from continuing operations,
     excluding the impact of our Synthetic Fuel business is as follows:

                                                   Continuing Operations
                                          -----------------------------------
                                          Income from   Synthetic   Excluding
                                           Continuing      Fuel     Synthetic
                                           Operations     Impact       Fuel
                                          -----------   ---------   ---------
         Pre tax income (loss)                   $110       ($42)      $152

           Tax (Provision) Benefit                (37)        15        (52)
           Tax Credits                             53         53          -
                                          -----------   ---------   ---------
          Total Tax Benefit (Provision)            16         68        (52)
                                          -----------   ---------   ---------
          Income from Continuing
           Operations, net of taxes              $126        $26       $100

          Diluted Shares                        244.3      244.3      244.3

          Earnings per Share - Diluted          $0.52      $0.11      $0.41

          Tax Rate                              -14.7%                 33.8%
 

                             Second Quarter 2002

                                                   Continuing Operations
                                          -----------------------------------
                                          Income from   Synthetic   Excluding
                                           Continuing      Fuel     Synthetic
                                           Operations     Impact       Fuel
                                          -----------   ---------   ---------
         Pre tax income (loss)                   $133       ($43)      $176

           Tax (Provision) Benefit                (49)        15        (64)
           Tax Credits                             43         43          -
                                          -----------   ---------   ---------
          Total Tax (Provision) Benefit            (6)        58        (64)
                                          -----------   ---------   ---------
          Income from Continuing
           Operations, net of taxes              $127        $15       $112

          Diluted Shares                        259.8      259.8      259.8

          Earnings per Share - Diluted          $0.49      $0.06      $0.44

          Tax Rate                                4.2%                 36.1%
 
 

                         MARRIOTT INTERNATIONAL, INC.
                  Non-GAAP Financial Measure Reconciliation
                   (in millions, except per share amounts)

                           Second Quarter YTD 2003

     The reconciliation of the effective income tax rate from continuing
     operations to the effective income tax rate from continuing operations,
     excluding the impact of our Synthetic Fuel business is as follows:

                                                Continuing Operations
                                          ------------------------------------
                                          Income from    Synthetic   Excluding
                                           Continuing      Fuel      Synthetic
                                           Operations      Impact      Fuel
                                          -----------    ---------  ----------

    Pre tax income (loss)                     $157        ($101)       $258

      Tax (Provision) Benefit                  (54)          36         (90)
      Tax Credits                              110          110           -
                                            ------       ------      ------
     Total Tax Benefit (Provision)              56          146         (90)
                                            ------       ------      ------

    Income from Continuing Operations,
     net of taxes                             $213          $45        $168

    Diluted Shares                           243.9        243.9       243.9

    Earnings per Share - Diluted             $0.87        $0.18       $0.69

    Tax Rate                                 -35.4%                    34.7%
 

                           Second Quarter YTD 2002

                                                Continuing Operations
                                          ------------------------------------
                                          Income from    Synthetic   Excluding
                                           Continuing      Fuel      Synthetic
                                           Operations      Impact      Fuel
                                          -----------    ---------  ----------

    Pre tax income (loss)                     $251         ($49)       $300

      Tax (Provision) Benefit                  (90)          17        (107)
      Tax Credits                               48           48           -
                                            ------        -----      ------
     Total Tax (Provision) Benefit             (42)          65        (107)
                                            ------        -----      ------

    Income from Continuing Operations,
     net of taxes                             $209          $16        $193

    Diluted Shares                           260.4        260.4       260.4

    Earnings per Share - Diluted             $0.81        $0.06       $0.75

    Tax Rate                                  16.6%                    35.7%

This press release contains "forward-looking statements" within the meaning of federal securities laws, including REVPAR, profit margin and earning trends; statements concerning the number of lodging properties expected to be added in future years; expected investment spending; anticipated results from synthetic fuel operations; and similar statements concerning anticipated future events and expectations that are not historical facts.  


 
Contact:
Marriott International, Inc.
http://www.marriott.com
Also See: Marriott Earns $116 million in 1st Qtr 2003, Up from $82 million Last Year; Synthetic Fuel Business Accounts for $19 million / Key Lodging Statistics/ April 2003
Marriott Reports Loss of $37 million in 4th Qtr 2002; Revpar for North American Properties Drop 5.7% in 2002 / Key Lodging Statistics / Feb 2003

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