Marriott International President & CEO Tony Capuano Talks Consumers

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Us now he is with Marriott. He is Marriott.

His leadership there with a lot of stress, has been wonderful.

Are you beyond Tony Kupyon? Are you beyond covid?

Is your whole shop removed from twenty twenty?

Yeah, and with increasing frequency, we're not making those twenty eighteen twenty nineteen comparisons.

Really looking forward.

We're talking to Barbell economy.

You guys, you're the epitome of the Explain how you're moving seats and beds in venice at the gritty palace versus a Marriotte.

It's really low and low budget in some state in the middle of nowhere. What's that Barbell look like right now?

So certainly in the US, but in many markets around the world, we see this bifurcation of the consumer, and so we're trying to leverage.

Both ends of the chain scales.

We have the industry's largest law luxury portfolio, including your favorite Grit, well aware of this, and we continue to double down and accelerate our growth. And that consumer has this ravenous appetite for travel.

In fact, in Q one, the luxury tier saw.

The strongest occupancy growth.

At the other end of the income spectrum, that lower income household still has an appetite for travel, but at a much lower price point. And that's why over the last two years you've seen US push into mid scale.

I think on your last Darnings call you talked about the kind of shock and awe that the travel industry filter in the first few months of this this administration. Situate your business in what we're all experiencing here, the uncertainty about where this trade war is headed, what deals might get done, where just the fact that that's having on consumers as well when it comes to sentiment just about the economy more broadly.

So, Actually, January February exceedingly strong. We had very high hopes that shock and awe, if you will, was really march. Our industry thrives in times of stability and high consumer confidence, and so when you see the US hit a fifty two year low in consumer confidence, it's to worrisome, to

Had you a year ago.

Said to me the US is going to hit a fifty two year low and that we'd still see four percent plus RevPAR growth, that would have been hard to reconcile. But that's what we're seeing in the business.

What are you seeing in the confidence data yourself? So I mentioned the uncertainty, are there indications here that consumers are seeing through this madness surrounding tariffs that they're feeling more confident, confident enough perhaps to book a few months out.

So you really need to look by demand segment. The segment that has the longest lead time is the group segment, and that's where we're seeing the deep strength in Q.

One RevPAR globally, and group was up eight percent.

In our two transient segments, leisure and business transient that has a much much shorter booking window sub twenty one days, we saw about two percent rev par growth in both of those segments, so a little harder to look too far into the future in those segments.

The chief executive officer Marriott is with us right down Tony Capiano. It's a lovely visit once even twice a year. The persistency of the stock performance over the last ten years, Marriott has enjoyed, Ready for this, fourteen point seven percent per year.

And that's that's a lot of bonvoid points. It's I'm impressed to that you.

It might get you one.

Full night at gritty Palace.

Yeah, good morning, missus Kean's don't listen to young copy on them.

Help help me here.

With one hundred and fifty five thousand employees, and I assume you've got a lot more on releases. In all that the late you're dynamic across America. Forget about venice. How hard is it.

To retain, to employ and retain labor right now?

I actually think we're in a better place than we were a couple of years ago.

I remember coming in to.

Speak to you as the recovery had just started coming out of the pandemic. The pandemic had rattled the labor base, who prior to the pandemic viewed the travel sector as a bit of a safe harbor, that there'd always be jobs, there would always be growth. You saw a lot of folks leave that sector. Most of them have come back. Now when you look across our us business.

The number.

We're never at full employment given the nature of our business, but the number of vacancies we have is actually slightly below where we were back in eighteen and nineteen.

Tom's joking about the bonvoy points, but let me ask you about what the magic of those are, and so being here and traveling for work, it's funny. I'll go out with crews who are just such loyal adherents to that I'll stay at one hotel estate at another because they're so keena. What is the magic of BONVOI? How is it bene six as well as it has been.

It's evolving.

I think for all the travel companies when they started these loyalty programs, they were pretty rudimentary.

You earned points for a stay.

Ultimately you redeemed those points for a redemption stay. Certainly at Marriott, we're evolving the platform in really meaningful ways. We're offering different adjacent experiences, whether that's Marriott homes and villas, the Ritz Carlton yacht election, and we're creating once in a lifetime experiences. So we were a big sponsor of the Taylor swift Eras tour. We are the official hotel of the NFL.

The Yes we were.

I'm just thinking to Amy Woo Silverman over there and we see capital markets. That explains why Taylor waved to her. Yes, she was stated, there you go. So like the NFL, it's like linking into corporate partners exactly working. It's working really well. And so for our members.

Your question specifically was what drives that loyalty. In many ways, it's access to these once in a lifetime experiences. To be in the first couple of rows of Taylor Swift concert, to be on the field at the super Bowl with the NFL, to be in the Mercedes paddock at an F one race. That ability, and they're also not all lifetime ten pole moments. Partnerships with Uber and Starbucks give some more immediacy to redemption opportunities.

Yeah, but the reality is for a lot of America away from I got to go to the sphere to see the Eagles whatever is, they're out of money, they got to take the brat to college, and they need to stay in a reasonably priced hotel.

Can you compete with all of those?

Absolutely?

Motel six is out there, just to use the iconic name. How do you compete with most I think that's.

Why we moved into the mid scale tier.

When we've thought about building the Bonvoy membership, when we thought about opening the aperture to bring new guests into the bury It Marriott ecosystem, we said today we didn't this is two years ago. We don't compete in the mid scale tier, and we ought to develop some platforms. So we bought City Express in Mexico, which we've brought to the US. Organically developed an extended stay mid scale

I got a memo in the control room for one of girls people. You got to bring it up.

Okay, the Nolan School of Hotel Administration high above Cayugos Waters. When you were in school there, I mean, is it just sort of like they're just like hotel people and they're really not in college?

Come on, well, I was Arts and Sciences but had a lot of envy for the hotel is because they had great internships. Every summer and they would go to places like Hawaiian.

Switzerland, the gritty hotel.

Would you when you go to you stay at the statlerd? Do you stay at Stute of Statland. He's a loyalist still I am a loyalist.

You know.

We're a two generation hotel school family. My daughter graduates around there two years.

Very cool.

And we are talking about the NC double national champion lacross Cornell Vigor.

We brought that up the other day.

Is there a forty eight year wag.

Ahead and that as well?

What is the distinction of the Cornell academic process and hotel I think of the people that run the Hassler in Rome and that Swiss heritage of hoteling. What is the distinction of Cornell versus the other hotel schools?

There are amazing hospitality schools all over the world. I think what separates Cornell. It's much more of a business school. To be sure, it uses travelatorism examples in the courses, but the number of students that go on to investment banking, private equity finance I think distinguishes the one.

Financier question, what's your biggest headache? Now? In capital deployment?

The availability of new construction debt. We've got hundreds of shovel ready projects in the pipeline where the equity is in place, the entitlements are in place, but the relative constriction in the debt not for existing assets.

But for new private credit and private equity.

Play sure and and he would you like to make an announcement here?

Not today?

I got something to do next time I come to see you, Tony.

Thank you so much, Tony, thanks for having in the bonus round here. June is busting out all over. The girl family gets night at that corner room at the Gritty. Eight thousand and five hundred can.

Half a millennia of Can you imagine the Venice, Texas on a eighty five.

No ticket? It is spectac it is it's one of the best hotels. You guys are up the river by the Metropolitan.

Was at the Danielle Daniellie.

Yeah, you were there and then you moved into the Gritty.

We have the Gritty and we also if you go the other direction on the Grand Canal, the Saint Regis, which is a spectacular hotel.

Really, you just set up a budget, missus.

Kings and if you want to get in a Reva boat.

We'll take you over to the j W which is private.

Se is that working for you?

It's working great. It just traded.

What kind of tourists goes to the island away from the.

Relatives, Somebody that wants the ability to retreat, right, that wants.

To go and fight away from Potaga Venada.

Precise treat away from enjoy San Marco for a bit and then go back to their quiet rage.

Thank you so much.