Marriott International Inc. (MAR)

Base Management and Incentive Management Fees

For the managed hotels, Marriott has performance obligations to provide hotel management services and a license to the hotel system intellectual property for the use of the brand names. As compensation for such services, Marriott is generally entitled to receive base fees, which are a percentage of the revenues of hotels, and incentives fees, which are generally based on a measure of hotel profitability. Both the base and incentive management fees are variable consideration, as the transaction price is based on a percentage of revenue or profit, as defined in each contract. Marriott recognizes base management fees on a monthly basis over the term of the agreement as those amounts become payable. Marriott recognizes incentive management fees on a monthly basis over the term of the agreement based on each property’s financial results, as long as Marriott does not expect a significant reversal due to projected future hotel performance or cash flows in future periods.

Franchise Fee and Royalty Fee Revenue

For the franchised hotels, Marriott has a performance obligation to provide franchisees and operators a license to the hotel system intellectual property for use of certain of the brand names. As compensation for such services, Marriott is typically entitled to initial application fees and ongoing royalty fees. Marriott’s ongoing royalty fees represent variable consideration, as the transaction price is based on a percentage of certain revenues of the hotels, as defined in each contract. Marriott recognizes royalty fees on a monthly basis over the term of the agreement as those amounts become payable. Initial application and relicensing fees are fixed consideration payable upon submission of a franchise application or renewal and are recognized on a straight-line basis over the initial or renewal term of the franchise agreements.

Owned and Leased Hotel Revenue

At the owned and leased hotels, Marriott has performance obligations to provide accommodations and other ancillary services to hotel guests. As compensation for such goods and services, Marriott is typically entitled to a fixed nightly fee for an agreed upon period and additional fixed fees for any ancillary services purchased. These fees are generally payable at the time the hotel guest checks out of the hotel. Marriott generally satisfies the performance obligations over time, and Marriott recognizes the revenue from room sales and from other ancillary guest services on a daily basis, as the rooms are occupied and Marriott has rendered the services.

Source: 10-K (filing date: 2019-03-01).

Marriott International Inc., Income Statement, Revenues

USD $ in millions

	12 months ended	Dec 31, 2018		Dec 31, 2017		Dec 31, 2016		Dec 31, 2015		Dec 31, 2014
	North American Full-Service
	North American Limited-Service
	Asia Pacific
	Other International
	Segment revenues
	Unallocated corporate
	Consolidated revenues

Based on: 10-K (filing date: 2019-03-01), 10-K (filing date: 2018-02-15), 10-K (filing date: 2017-02-21), 10-K (filing date: 2016-02-18), 10-K (filing date: 2015-02-19).