The recovery of hotel demand has been encouraging, in large part because of how broad it is — across all sectors and geographies, said Tony Capuano, president and CEO of Marriott International.
In a video interview with Hotel News Now at the Americas Lodging Investment Summit, Capuano said hotel demand from groups is still the “bright, shining star,” showing extraordinary strength during the third quarter of 2023. Leisure demand hasn’t shown many signs of slowing, and business transient continues to make its slow and steady recovery. From a geographic perspective, demand has grown across every one of Marriott’s regions.
“And so, the recovery continues to just roll along,” he said.
As group demand continues to evolve, Marriott’s hotels are keeping up with new guest behaviors, Capuano said. The hotels aren’t changing physically, but hoteliers are being more thoughtful in how they book groups and fill out the calendar. The new Gaylord hotel set to open in Chula Vista, California, in 2025 is expected to be very popular with groups, but it’s also in a leisure destination, so that requires striking a balance.
“That's true with many of our resorts,” he said. “They are very appealing group meeting and conference destinations, but you want to make sure you preserve the ability to drive high rate of transient business in the peak season as well, so it's trying to find that right balance and, really, the opportunity for our teams is to fill in those shoulder seasons with group.”
As Marriott looks to continue its strong growth, the development community is running into challenges, particularly the ability to access debt for new construction. As a result, the company has seen growing interest in conversion opportunities, Capuano said. Conversions accounted for 25% of Marriott’s room openings in 2023, and it signed 184 conversion properties with 65,000 rooms last year, including its partnership with MGM Resorts International.
“Maybe [debt’s] starting to loosen up a little bit, but I think that's why you see us with such a heavy focus on conversions,” he said.