Hospitality Split

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.