WASHINGTON,  - July 8, 1998 -  Marriott International, Inc. (NYSE: MAR) today reported net income of $101 million for its 1998 second quarter ended June 19, an increase of 20 percent over $84 million in the corresponding 1997 quarter. Diluted earnings per share for the 1998 quarter rose to 37 cents from 31 cents a year ago, while sales increased 16 percent to $2.5 billion.

J.W. Marriott, Jr., chairman and chief executive officer of Marriott International, said that the company's strong 1998 second quarter performance was paced by its lodging group. "The U.S. lodging industry remains robust," Mr. Marriott said, "and our brands continue to lead their segments in occupancy, REVPAR growth and profitability. As a result, Marriott Lodging posted the highest quarterly profits in its 41-year history.

"The company is on track to achieve its earnings growth targets for the full year," Mr. Marriott continued. "We also are making tremendous strides toward our long-range development goals. Our pipeline of approved lodging and senior living community projects is at an all-time high, and we recently boosted our new unit growth goals through the year 2002."

For the first half of 1998, Marriott International reported net income of $190 million and diluted earnings per share of 70 cents, up 24 percent and 23 percent, respectively, versus the 1997 period. Sales totaled $4.7 billion, a 15 percent increase over the 1997 first half.

LODGING operations reported increases of 24 percent both for operating profit and sales in the 1998 second quarter. Results reflected room rate growth at U.S. hotels well in excess of inflation, contributions from new units, and expansion of the company's vacation club (timeshare) resort business.

Across the Marriott lodging brands, revenue per available room (REVPAR) for comparable company-operated U.S. properties grew by an average of six percent in the 1998 second quarter. Average room rates for these hotels rose more than seven percent. Occupancy in the 1998 quarter declined by one percentage point to 80 percent, due in part to the timing of the Easter holiday.

Profits for international lodging operations were slightly lower in the 1998 second quarter as contributions from new units and improved performance at key European hotels were offset by the impact of difficult economic conditions in the Asia/Pacific region and reduced travel to the Middle East.

The company has added a net total of 169 properties (25,800 rooms) to its lodging system over the past 12 months, including 48 hotels and resorts (7,500 rooms) opened in the 1998 second quarter. At quarter-end, the Marriott lodging group encompassed 1,588 properties totaling 310,000 rooms and 3,600 timesharing villas. The company expects to add more than 150,000 rooms over a five-year period (1998-2002), including approximately 30,000 rooms (175 hotels) scheduled to open in 1998.

Marriott Vacation Club International posted substantial profit growth in the 1998 second quarter. The division generated a 14 percent increase in contract sales, reflecting strong sales activity at timeshare resorts in South Carolina, Hawaii and California, as well as higher financing income. Lodging sales in the 1998 second quarter were up 12 percent before the impact of consolidating The Ritz-Carlton Hotel Company LLC, which previously was accounted for using the equity method of accounting. In March 1998, Marriott International acquired substantially all of the remaining ownership interest in this hotel management company.

CONTRACT SERVICES reported an $8 million reduction in operating profit in the 1998 second quarter, on 16 percent lower sales. Profit comparisons between years are affected by the mid-1997 sales to investors of 34 senior living communities which Marriott continues to operate under long-term agreements. Excluding the impact of these transactions, profits for contract services more than doubled in the 1998 quarter.

Marriott Senior Living Services posted higher sales, and solid profit growth in the 1998 second quarter, before the impact of the senior living community ownership changes cited above. Results were aided by contributions from 16 communities added over the past 12 months. Occupancy for comparable senior living communities increased slightly to 94 percent in the quarter. The division now operates 95 independent full-service and assisted living communities totaling 18,400 units. Marriott plans to add more than 200 communities over a five-year period (1998-2002), including nearly 30 properties scheduled to open in 1998.

Marriott Distribution Services achieved higher profits in the 1998 second quarter, despite lower sales. The division benefited from consolidation of its food distribution facilities, and realization of operating efficiencies following a period of rapid expansion in 1996-97.

CORPORATE EXPENSES rose $4 million in the 1998 second quarter, primarily due to year 2000 software modification costs, and noncash items related to investments generating significant income tax benefits. Interest expense declined by $2 million, reflecting the impact of asset dispositions, while interest income increased $2 million as a result of higher notes receivable balances.

Marriott International repurchased four million shares of its common stock during the 1998 second quarter. The company's Board of Directors has authorized repurchase of an additional 16 million shares.

MARRIOTT INTERNATIONAL, INC. is a leading worldwide hospitality company, with nearly 1,700 operating units in the United States and 53 other countries and territories. Major businesses include hotels operated and franchised under the Marriott, Ritz-Carlton, Courtyard, Residence Inn, Fairfield, TownePlace Suites, Renaissance, and Ramada International brands; vacation club (timeshare) resorts; senior living communities and services; and food service distribution. The company is headquartered in Washington, D.C. and has approximately 131,000 employees.

Note: This press release contains "forward-looking statements" within the meaning of federal securities law, including statements concerning the number of lodging and senior living communities expected to be added in future years, business strategies and their intended results, and similar statements concerning anticipated future events and expectations that are not historical facts. The forward-looking statements in this press release are subject to numerous risks and uncertainties, including the effects of economic conditions; supply and demand changes for hotel rooms, vacation timesharing intervals and senior living accommodations; competitive conditions in the lodging, senior living and food service distribution industries; relationships with clients and property owners; the impact of government regulations; and the availability of capital to finance growth, which could cause actual results to differ materially from those expressed in or implied by the statements herein.