Marriott criminal investigation

Could the criminal investigation of Marriott in Poland harm the business.

Marriot International is an American multinational company based in Maryland, USA. The company operates, franchises and licenses hotel, residential and timeshare properties around the world.

With approximately 8,500 locations around the world, Marriott is acknowledged to be amongst the largest and most successful, hospitality-based companies, in the world.

Listed on the NASDAQ, S+P 500 and the London Stock Exchange the company has experienced growth in revenue, asset value, employees and locations, over a number of years.

Concurrent with this success is an international profile, brand image, corporate standing and relationship reputation, which are amongst the most highly valued assets of any worldwide hospitality organization.

During the past 12 months the Marriot criminal investigation, opened in Poland against Marriott, has advanced that Marriott acted fraudulently and unethically against the Lim company.

Marriott operated the Marriott Warsaw at the Lim Company, however, issues which had arisen during the COVID period, led to the Lim Company filing a notification against Marriott.

This initial notification has led directly to the Marriott criminal investigation and the serious legal ramifications for Marriott International.

Basis of the criminal investigation
This notification filed by the Lim Company reflected the Marriotts denial of a request, by Lim, to close the hotel during the first COVID period.

The denial of the request to close was exacerbated by the associated expenses that were to be incurred, and resulted in the Lim filing complaints regarding the allegation of breach of contract and financial irregularities.

The initial complaint that was filed, eventually escalated into the Marriott criminal investigation. As the initial complaint became a criminal matter, it necessitated the Polish authorities and government becoming part of the overall investigation.

The original dispute had developed in to a claim against Marriot which could have serious legal implications, especially for Marriott International.

Specific areas of concern
A number of concerns have arisen following the criminal investigation of Marriott. Central to these is the potential damage that could be caused to Marriott International due to failing to comply with the law.

One of the essential elements of the success of Marriott International, is the relationship with building owners, such as Lim.

The reputation between Marriott and any building owner is the foundation for many wider relationships with franchisees, suppliers, labour organisations, clients, investors and various associated partners.

The effect of any criminal investigation into Marriott is a very specific area of concern, however, the damage for Marriott is not limited to financial and legal problems alone.

Hospitality industry leaders like Marriott run their businesses based on trust.

Any investigation in respect of breach of trust and corruption, will have far-reaching effects on profile, brand image and corporate reputation.

Perhaps of more specific concern is that Marriott’s reputation could be damaged beyond repair.

Impact of a criminal investigation
The negative impact of a criminal investigations of Marriott International and their relationships with building owners, suppliers, associated partners and clients is of overriding concern.

Losing any element of confidence, within a sector for which reputation is essential is a serious concern to Marriott.

The image of Marriott being tarnished because of a criminal investigation cannot be overstated.

The fact that this investigation has also come under the spotlight of the Polish authorities and government, can only add to the concerns in respect of the negative impact on the reputation of Marriot International.

Ancillary areas of concern
Being a recognized leader in the hospitality industry, the Marriott group can impact greatly on how other, similar, companies might operate.

Undertaking questionable practices and having to face criminal investigations can have broader and far-reaching consequences and broader implications for the hospitality sector, worldwide.

That said, the implications for Marriott are not limited to direct financial and legal problems specific to the claims of the Lim Company.

The effect of any negative corporate or operational impact could become factored into the trading of Marriot International shares. The share price could negatively adjust to reflect the difficulties of having to face a breach of trust and financial malpractice.

Any downward pressure on share price might affect earnings, asset value, credit rating and commentary amongst the investment community.

Of these, the latter, is perhaps worth considering in more detail.

Market-makers chart the progress of investments, advise investors as to buying, selling or holding investments.

The professionals who are active in securities and exchange will scrutinize share prices, share price movements and the reasoning for such activity.

The effects of a criminal based investigation, with local political implications, a negative corporate or brand reaction will not go unnoticed and such professional will act, and advise, accordingly.

This might be an additional, but equally important concern for Marriot International.

The article Marriott criminal investigation first appeared in TravelDailyNews International.