People ‘were reminded how much they love to travel’

Marriott International CEO Anthony Capuano joins Yahoo Finance Live to discuss company earnings, inflation, travel demand, pricing, consumer spending, human trafficking training, and the outlook for growth.

Video Transcript

BRIAN SOZZI: Travel demand is officially back, despite a higher price tag. Marriott saw revenue per average room climb nearly 29% year over year in the fourth quarter and is predicting the good news will continue into this year with business and cross-border travel demand expected to carry over. Marriott President and CEO Anthony Capuano joins us now. Thanks for traveling to our studio today.

ANTHONY CAPUANO: Of course. Good to see you. Good to be back.

BRIAN SOZZI: Yeah, upbeat earnings day for the Marriott team. Upbeat earnings call, I would say. And really, one of the takeaways that you brought up– abundantly clear people love to travel. Why is it still happening here and happening in a big way?

ANTHONY CAPUANO: A whole host of reasons. Even before the pandemic, we saw shifts in the data away from spending on hard goods towards experiences. I think the psychological impact of being locked down for some portion of the pandemic has only accelerated the trend that had already started.

BRIAN SOZZI: And it’s still revenge travel, or is this something else developing? Now it just seems that it is being etched into our fabric.

ANTHONY CAPUANO: I don’t know that it’s revenge. I think people were reminded how much they love to travel, explore new places, try new foods, immerse themselves in new cultures, and some of the events that were postponed– birthdays, weddings, bar mitzvahs, and the like. And so people were reminded of the value of travel.

BRIAN SOZZI: I just realized, Anthony, in real-time, I haven’t been on a vacation in about seven years.


BRIAN SOZZI: No, I know you could. Well, part of that as well, you’re also seeing leisure demand very robust. Has that continued into the first quarter?

ANTHONY CAPUANO: It has. And in fact, that’s another trend. Leisure was outpacing business travel pre-pandemic. We’ve seen that trend accelerate as well over the last number of quarters. Leisure demand in the quarter was up 10% over same quarter in 2019. Really, really strong and growing and largely driven by rate as well. We continue to see strong pricing power.

BRIAN SOZZI: Last time we talked, it was a different hiring environment, a different mood in corporate America. Since we last spoke, a lot of companies are laying people off. That means less travel. What’s happening in the group business?

ANTHONY CAPUANO: So group was probably the most pleasant surprise in the quarter’s performance.

BRIAN SOZZI: Pleasant surprise.

ANTHONY CAPUANO: Group business was up 10%. And there was some question, well, is that starting to wane? If you look at what we have on the books for 2023, we’re actually pacing about 20% up.

BRIAN SOZZI: Is it conventions?

ANTHONY CAPUANO: It’s small meetings, it’s conventions. Even companies that have ratcheted back their more traditional transient business travel, they still feel the need to get their teams together. And so you’re seeing a lot of corporate meetings.

BRIAN SOZZI: And what’s your outlook for prices for leisure and group business? Do you think you could still push through higher prices in the back half of the year?

ANTHONY CAPUANO: Short answer is yes. I think you will see rate moderate a bit. We saw really extraordinary pricing power throughout ’22. And it was rate that largely led the RevPAR recovery. Our view into ’23 is that as RevPAR continues to grow, it’ll be a bit more balanced of occupancy recovery and continued strength in ADR.

BRIAN SOZZI: And China, is it growing yet?

ANTHONY CAPUANO: Slowly. As we came out of the pandemic, it was fascinating to watch the data. Every time a destination opened its borders or eased travel in and out of the country, we saw immediate spikes in search activity on We saw booking activity start to build. China’s obviously just started to open its borders. But we’re already seeing similar trends.

BRIAN SOZZI: You were the development guy. You’ve developed hotels. That was one of your many gigs before taking over the CEO role. How important is it to start or get a relief on interest rates, just so you could get a pickup in more room development and ultimately buildings?

ANTHONY CAPUANO: Well, it’s interesting. There are a whole host of factors that you might look at and say they would be impediments to growth. Supply chain issues, construction cost environment, interest rates– those are all considerations for our owners and franchisees. I would tell you today, if there’s a single impediment of significance, it’s really around the constriction in the debt markets for new construction.

I think our developers understand they are developing in a cyclical sector. They understand that interest rates ebb and flow. It maybe squeezes the margins and the returns on their projects, but it’s the availability of debt that’s the biggest challenge right now. There is plentiful debt for the acquisition of existing assets, more limited for new construction.

BRIAN SOZZI: I want to leave a little time for your ESG efforts because two of my– I haven’t really heard before from a lot of companies. One, you have a goal, 3,000 diverse and women-owned hotels in the system by 2025. How many do you have now? And how do you make this happen?

ANTHONY CAPUANO: Yeah, we’re approaching 2,000 diverse hotels. Those numbers ebb and flow as well because it’s a fluid transaction environment. But what we found is we’re very proud of the diverse of our portfolio. But it is heavily weighted towards the Indian-American community. That community owns about 60% of the hotel inventory in the United States. We continue to have vibrant relationships there and grow strongly.

But we want the profile of our owner community to mirror society at large and our guest profile as well. And we see some underrepresented groups like women-owned. And so we actually, last year at the NYU conference, launched an initiative called Marriott’s Bridging the Gap, where we make capital available to help see some of those deals get done.

BRIAN SOZZI: Well, that is very interesting. And the other one I have never heard from a lot of companies– you have recently trained a million Marriott associates on human trafficking. Walk us through that.

ANTHONY CAPUANO: Yeah, it’s a big focus for the company. It’s a personal passion for me and my family. Human trafficking is a scourge on humanity. And unfortunately, a lot of it happens using hotels as an environment. So several years ago, we developed an intense training program for our associates. And as you point out, we’ve trained now a million Marriott associates. It’s such a critical global issue that in partnership with the American Hotel and Lodging Association, we actually made the Marriott training available to all of our peers in the industry.

And so now you’ve seen almost 800,000 competitor employees go through the training as well. And it’s really gratifying. We are not self satisfied. We’ve got lots of work to do. But I can give you dozens of instances where our smart, focused associates have used what they learned in that training and actually thwarted human trafficking activity in progress.

BRIAN SOZZI: To the extent you could, what does that training look like? What would a day–

ANTHONY CAPUANO: What to watch for, signs that you should be focused on, on identifying, and maybe more importantly, remember, we’re in the hospitality business, so we’re not accustomed, our associates, to questioning our guests, interrogating our guests, if you will. And so a lot of the training is around if you see something that causes you concern, how do you elevate it within the management ranks in the hotel?

BRIAN SOZZI: And your competitors, are they doing this, too?

ANTHONY CAPUANO: Well, again, we’ve made our training available to them, and they’ve trained almost 800,000 of their employees.

BRIAN SOZZI: It’s great to see it, and good to see you guys leading the charge. Marriott CEO Anthony Capuano, always good to see you. Great to get some time with you, as always.


BRIAN SOZZI: Appreciate it.

ANTHONY CAPUANO: Thanks for having me.

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