Marriott CEO is bullish about long-term growth in travel and hospitality

Food & Travel

Published: 16 Mar. 2024, 07:09 Updated: 18 Mar. 2024, 00:02

Marriott CEO is bullish about long-term growth in travel and hospitality

[EXCLUSIVE]

There was a time not so long ago when the future of travel looked bleak.

President and CEO of Marriott International Anthony Capuano [MARRIOTT INTERNATIONAL]

Ever-evolving technology connected everyone to every place, and spending hours at congested airports and stuffed in planes with crying babies seemed like an unnecessary hassle.

Even Bill Gates postulated that more than 50 percent of business travel would disappear in the post-Covid era.

He couldn’t have been more wrong.

Marriott International, the world’s largest hospitality company, had a record-breaking year in 2023, reporting a 31 percent net income increase on-year at $3.08 billion and adding over 550 properties around the world.

JW Marriott Hotel Seoul in Seocho District, southern Seoul [MARRIOTT INTERNATIONAL]

The company now has roughly 8,800 establishments across 139 countries and territories; a brand portfolio with over 30 brands that includes mid-range to luxury, as well as long-stays and home rentals; and the travel industry’s largest customer loyalty program with over 200 million members.

Travails of flying aside, the Marriott International president and CEO Anthony Capuano was bullish about the future of travel, saying that their skyward numbers aren’t just temporary highs from pent-up, post-pandemic demand. If anything, Covid has turned out to be a long-term booster for business and leisure travels.

“Prior to the pandemic, we saw a pivot away from spending on hard goods toward spending on experience, particularly among the younger consumers, and the pandemic appears to have acted as an accelerant for that trend across all demographics,” Capuano told the Korea JoongAng Daily on Feb. 26, at JW Marriott Hotel Seoul in Seocho District, southern Seoul. “This desire for spending on experiences is a fundamental shift that I view as fairly permanent.”

President and CEO of Marriott International Anthony Capuano speaks to the Korea JoongAng Daily on Feb. 26, at JW Marriott Hotel Seoul in Seocho District, southern Seoul. [PARK SANG-MOON]

Marriott is also betting on China to continue gaining altitude, Capuano said, citing that only 40 percent of international airlifts to and from the country have recovered.

“This makes us believe that there is still meaningful upside left and that the outlook for global travel is compelling.”

Its strategy for the new year is, hence, more.

“Bill Marriott, who was our chairman and CEO for about 40 years, would be quick to tell you that his favorite word in the English language is 'More!'” Capuano said. “Quite simply, I want to capture as much of your travel wallet as possible. We believe you do that by having the right product to where you want to travel for every trip and purpose.”

The first Edition hotel in Southeast Asia opened in Singapore last year. [MARRIOTT INTERNATIONAL]

The company currently has nearly 3,400 hotels and 573,000 rooms in its global development pipeline.

Some 12 percent of those are slated to open in the Asia Pacific ex-China.

“[Asia Pacific ex-China] is one of the most dynamic regions that is experiencing some of the strongest revenue and net unit growth of any region we have in the world,” Capuano said. The company operates over 560 hotels and residences in the area.

In Korea specifically, it has properties in Seoul and regional cities like Suwon, Sejong, Busan, Daegu, Daejeon, Incheon, Seongnam and Jeju.

Courtyard by Marriott Sejong in Eojin-dong, Sejong. [MARRIOTT INTERNATIONAL]

“We have 34 hotels in operation now and another 12 in the pipeline [for Korea],” Capuano said. “I knew we had a terrific footprint here in Seoul, but the fact that we are planting our flags in secondary markets across the country is really exciting, and it is something that distinguishes us from other brands.”

He continued, “There was a period when many global conglomerates focused their energy on China and India, almost exclusively. We took a different approach. Of course, we invested meaningful resources to ensure that we were growing aggressively in those two important markets, but not to the exclusion of the rest of the region. And as the result of that focus, we are the largest brand and company in markets like Korea and Vietnam.”

With over 30 brands, Marriott's hotels range from mid-range to luxury, long-stays and home rentals. Shown in the photo is a room in Moxy Bangkok, Thailand. [MARRIOTT INTERNATIONAL]

Capuano in the recent visit made in-person stops at Seoul and Jeju Island Marriott hotels.

“As [Marriott] grew further afield from Washington, D.C., there was always some concern about how the company was going to preserve the strength of its culture,” he said. “But the more I travel, the more I realize that our culture is the strongest it has ever been everywhere in the world, and that’s certainly been my early impression on my last few days here.”

Labor shortage and technology

But amid mushrooming properties, the hospitality industry is dogged by staff shortage, especially since many furloughed during Covid-19 have yet to return. Korean five-stars in particular saw a 21 percent drop in their workforce between 2020 and 2022, from an average of 238 workers to 187 workers at a single hotel, according to the Korea Hotel Association.

“We should do a better job explaining to people that Marriott, and the travel and tourism sector more broadly, is not just a place to get a job to earn a paycheck, but it is a dynamic set of industries for long-term careers,” Capuano said. “We have hundreds and thousands of amazing stories — about folks who started with hourly positions and are now general managers or C-suite executives.”

Capuano himself started as a pot washer in the industry, and this year he is celebrating his 29th year at Marriott. Rajeev Menon, president of Asia Pacific excluding China, who was also present at the interview, began as an intern and then was recruited into the hotel’s management training program.

Some hotels have resorted to technology to fill the labor gap, instating kiosks and robots in the kitchen or lobby, but they will never be able to fully replace human talent, Capuano said.

“At its core, the hospitality business is about people and serving people.”

Even when discussing the company’s loyalty program, Marriott Bonvoy, Capuano emphasized that Marriott always strives to have an “emotional relationship” with its guests.

Last year, it partnered with swanky events like the Taylor Swift Eras tour, the Super Bowl and a Formula 1 race, offering its members free passes and exclusive behind-the-scenes opportunities.

“Through these experiences, we are evolving the relationship with our members from a transactional relationship to a more emotional relationship,” he said.

NFL wide receiver Garrett Wilson joins Courtyard by Marriott, the official hotel of the NFL, to showcase this year's Super Bowl Sleepover Suite at Allegiant Stadium on Feb. 8 in Las Vegas. [AP/COURTYARD BY MARRIOTT]

ESG

Marriott is committed to reaching net-zero emissions by no later than 2050. In line with this global initiative, its properties in Korea with more than 50 rooms are set to remove all single-use toothbrushes, toothpaste and razors starting March 29. It also aims to replace in-room disposable water bottles with water dispensers in 15 Korean properties by the end of 2024. The properties currently throw away approximately 35 tons of these plastic bottles annually.

Marriott aims to replace in-room disposable water bottles with water dispensers in 15 Korean properties by the end of 2024. The properties currently throw away approximately 35 tons of these plastic bottles annually. [MARRIOTT INTERNATIONAL]

With an extra push from corporate that implemented new systems this year to better track hotels' sustainable practices in the Asia Pacific ex-China region, according to Menon, individual hotels are constantly putting forth new ideas to cut back on carbon emissions as well.

For instance, JW Marriott Jeju Resort & Spa is collaborating with local orange farms to recycle 300 kilograms (660 pounds) worth of food waste. JW Marriott Hotel Seoul has instated a food waste tracking system, Lumitics, that measures how much food is being thrown out in real-time and relays that data to the kitchen team so that they can better plan out the portions of different foods and minimize waste.

Premium Suite with spa at JW Marriott Jeju Resort & Spa on Jeju Island, Korea [MARRIOTT INTERNATIONAL]

Marriott International also aimed to achieve gender parity for global executives by the end of 2025 but Capuano had pulled the deadline forward to 2023, and the number as of December last year stood at just over 47 percent.

“I’m confident we will be far ahead of our goal by the original 2025 deadline.”

BY LEE JIAN [lee.jian@joongang.co.kr]