PHOENIX — In Marriott International President and CEO Tony Capuano's view, there are two types of companies with international reach.
There are U.S. companies with international operations, and there are truly global companies, which is Marriott’s aspiration.
“A small but important part of that is the world does not operate on the calendar and clock of Bethesda,” he said, referring to the company’s headquarters in Maryland. “If I’m on the phone at five o’clock in the morning, I can get Asia before the end of the business day, and then just follow the sun.”
Marriott operates in 141 countries, so there’s not a lot of time to sleep, Capuano said during a fireside chat session at the recent Lodging Conference.
In his prior role as a development executive with Marriott, Capuano said he was often asked about the company’s development strategy.
“We want to capture as much of that travel wallet as we can,” he said. “So, how do you do that? You make sure you have the right product everywhere those [Bonvoy] members want to travel for every trip purpose.”
The overarching focus is not growth for the sake of growth but to satisfy the guests Marriott serves, he said. With the right growth strategy, it creates tremendous career opportunities for Marriott employees. It allows guests to concentrate their travel in a single portfolio. It gives owners and franchisees the opportunity to grow their portfolios.
Taking this approach helps cultivate real relationships, not just ones that might help close a specific deal, he said.
“What can we do to help you grow your business?” he said. “When I think about the core of our business, we are a rapid-growth business, and the vast majority of that growth comes on the shoulders and balance sheets of our owners and franchisees.
“We just opened our 9,000th hotel. Of those 9000, we own 20 — and I'd be happy to sell you those 20. But if that's your business model, then cultivating those relationships, and irrespective of the legal relationship, treating those owner and franchisee partners is critical to our model.”
Evolving loyalty programs
The investment community tends to focus on the gross enrollment numbers of hotel brands' loyalty programs, which is fair given that it’s a metric that allows for apples-to-apples comparisons, Capuano said. It’s a shame on any brand company that narrows its focus to gross enrollments and doesn’t evolve the programs from a transactional platform to allow members to do more than earn and spend points on stays.
“That is foundational and critically important to the platform, but there's so much more potential than that, and in an odd way, the pandemic opened our eyes to that even more,” he said.
At the time, Marriott’s Bonvoy program had 150 million to 160 million members, and the principal connection between the company and these members was staying in Marriott’s hotels. That connection was threatened as people were no longer traveling.
That led Marriott’s teams to think more broadly and creatively about how to enhance the stickiness of the program and find more touchpoints with members, he said. This the big opportunity for all hotel loyalty programs.
“You can’t pick up a trade journal or even the Wall Street Journal and not read an article about the ravenous, almost insatiable appetite that travelers have for experiences,” he said. “I think these loyalty platforms, as they evolve give us a tremendous portal to offer unique, once-in-a-lifetime experiences to our members.”
Challenges during the pandemic
In the early days of the pandemic, then-Chairman Bill Marriott asked rhetorically in a boardroom meeting whether the company would survive, Capuano said. It was a situation no one could have prepared for.
“If we’ve erred in terms of the management of our balance sheet, I’d say we’ve erred on the side of conservatism, but ... not once did I ever hear somebody in a meeting say we ran a sensitivity to see if revenue drops 92% overnight. What does the [profit and loss] look like?” Capuano said.
It was an extraordinarily difficult time compounded by the fact that no one knew for what equation they were solving, he said. The most immediate focus was on generating liquidity, but no one knew how long that focus would be necessary.
The death of then-CEO Arne Sorenson in February 2021 was a profound loss for the company, Capuano said. Sorenson was a generational leader as well as a friend and mentor to many at Marriott and across the hotel industry.
During the call he received about being appointed to CEO, Capuano said Bill Marriott gave him some advice.
“What he said was, ‘Nobody wishes more than me that I could stop the world spinning for a few weeks so we could properly grieve our friend. But the reality is, whether you like it or not, tomorrow morning, 800,000 people are going to wake up and put on a Marriott name badge and expect you and the leadership team to lead them out of this existential crisis,’” Capuano said.
That advice allowed Capuano to compartmentalize the challenges he would face the next morning, he said.
Importance of mentors
Mentorship is critically important, Capuano said. He had the privilege to work with both Bill Marriott and Sorenson, and he recalled the important lessons learned from them.
Following the company’s purchase of Starwood Hotels & Resorts Worldwide in 2016, Marriott’s leadership team did a world tour of Starwood’s global offices. When flying back from Dubai, Capuano said he asked Sorenson about trying to follow Bill Marriott, “as iconic a leader as the industry has ever known.”
Sorenson told him that Bill Marriott's advise was that the company’s directors had selected Sorenson to be CEO because they believed he was the right leader of the company. The only way he wouldn’t succeed is if he tried to be Bill Marriott, not Arne Sorenson.
Capuano said he remembered those words when he was appointed CEO after Sorenson’s death.
“Arne was remarkable. I have no idea how to be Arne. I only know how to be myself,” he said. “But with mentors like Arne and Mr. Marriott, there are lessons that you take from every leader who you work with, and I think that’s highly impactful as you develop your own leadership style.”
Sorenson would talk at length of his concern about being an engaged listener in a time when people’s attention spans are shorter, Capuano said. After Sorenson's death, many of the stories people shared about him came from people who only spent a few minutes with them, but that short time made an impact.
“What it made you realize is, for those five minutes, he put his phone away, he looked them in the eye, he listened to what they had to say,” Capuano said. “He engaged, and it really reveals the power of active, engaged listening.”
Around the time of the Starwood acquisition, Kate Walsh, dean of Cornell’s Peter and Stephanie Nolan School of Hotel Administration, asked for a meeting with Bill Marriott while in Washington, D.C., Capuano said. She spent an hour with him, and toward the end of their time together, she said her students would be asking her for his advice.
“He got that kind of wry grin on his face, and he said, ‘Tell them to be humble,’” Capuano said.