Hotel giant Marriott International Inc (NASDAQ: MAR) named Tony Capuano as its new CEO after its prior CEO Arne Sorenson died on Feb. 15 after a multi-year battle with pancreatic cancer.
Capuano is mourning the loss of Sorenson who served as the first non-family member as CEO in the company’s history. But under Capuano’s leadership, the company remains “laser-focused” on its operations and navigating the company through the pandemic and its aftermath.
Everyone is ‘energized’
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Sorenson is a “generational leader” but Marriott’s leadership team remains “energized” because its partners, associates, workers, and customers depend on their ability to continue working, Capuano said Wednesday on CNBC’s “Squawk on the Street.” Management has to be counted on to pull every lever to build demand volume to occupy its 1.2 million hotel rooms worldwide and keep thousands of people employed.
Capuano’s top two priorities are addressing the stringent requirements to keep guests comfortable and safe when they travel and supporting hotel owners and franchisees, the CEO said. It is the franchisees who have “borne the brunt of the financial pressure” brought on by the pandemic.
The pandemic’s continued impact on the hotel industry remains ongoing and is evident in InterContinental Hotels Group plc’s (LON: IHG) earnings report this week. Here is an Invezz.com guide recapping the report.
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Plans to counter Airbnb
Beyond the pandemic, hotel giants like Marriott must contend with growing competition from the likes of Airbnb Inc (NASDAQ: ABNB). The company first responded to the threat by launching Marriott Homes & Villas in 2019 although this was a “fairly soft step in,” the new CEO said. The company started to list around 2,000 homes when it launched the Airbnb rival and has since evolved to 25,000 full-home rental opportunities.
While home rentals is an “interesting business” under his leadership it will unlikely expand to become “anywhere close” to the size of Airbnb, he said. Instead, Marriott is focused exclusively on high-end home rentals.
The company’s current focus also allows it to satisfy demand from customers who on occasion want to rent out an entire home for a trip instead of a room. Marriott also offers loyalty points on all home rentals through its Marriott Bonvoy program.
“Being able to offer them that through the Bonvoy platform really allows us to keep them within that Marriott ecosystem,” he said.
Business travel rebound
Marriott and other brands are heavily exposed to the business traveling industry and investors are naturally questioning what demand will look like in the future. There are “a lot of opinions” on what the demand environment will look like — some of which are assuming demand will “never come back” to prior COVID levels, Capuano said. But feedback from Marriott customers is not consistent with this thinking.
As the vaccine to protect people against the virus is more readily available and as the pandemic recedes, business customers are “anxious” for a return to face-to-face meetings and events, he said.