A Q&A with Marriott CEO Anthony Capuano

Despite its size, Marriott International remains as agile as ever, expanding further into vacation rentals, serviced apartments, affordable midscale hotels and even luxury cruising in recent years. It has also been making major inroads into the all-inclusive sector, moving forward with plans to debut all-inclusives under a variety of its luxury and full-service flags. Hotels editor Christina Jelski spoke with CEO Anthony Capuano at the Americas Lodging Investment Summit about his industry outlook for 2023, opportunities to innovate within the all-inclusive space and Marriott’s mergers and acquisitions strategy.

Q: Is pent-up demand likely to hold steady this year, or are you seeing signs of potential softening?

A: I think it’s fascinating to listen to all of the experts predict what 2023 will look like. I’ve been in the industry for 35 years, I’ve been with the company for 28 years, and I’m not sure I’ve ever gone into January with such a wide set of viewpoints on what the coming year will look like. I’ve seen people predict double-digit RevPAR growth in 2023. I’ve seen some predict negative RevPAR growth for 2023. And all that variance underscores the uncertainty around sociopolitical instability, economic headwinds, threat of a recession. Thankfully, the data does not reveal softness today. We continue to see strong growth across all customer segments and in most areas of the world. So I’m quite bullish.

Q: So this isn’t the year we stop using the phrase “pent-up demand”?

A: I don’t think so. I think how we characterize that pent-up demand may be a little different; it may have a heavier cross-border component. But I don’t think we’re close to the bottom of that bucket. In January, the central government in China announced they were opening up outbound China travel to 20 countries. And I think you’ll continue to see that open. The U.N.’s World Health Organization just came out with their predictions and said they think cross-border global travel will get back to 85% to 90% of where we were in 2019 this year. So maybe a recurring theme in our conversation will be my optimism. I look at the 25% recovery of cross-border travel in and out of Asia Pacific [so far] as a tremendous opportunity for us, given our footprint.

Q: What was behind Marriott International’s decision to make high-end, all-inclusive expansion a focus, and what do you find most exciting about this space?

A: We saw leisure growing at a much more rapid pace than other segments pre-pandemic. Our entry into all-inclusive now looks like [a brilliant move], given the pandemic, but that [plan] was already well underway. The Sunwing deal we did in 2021 was pretty transformative for us in terms of rapidly expanding the portfolio. The thing I’m most excited about is, No. 1, the conversion opportunities that we’re evaluating. I think more and more players in the all-inclusive industry are understanding the power of our revenue engines, the reach of our loyalty program, and I think that will serve us well. But the other thing I’m quite excited about is that while the business launched in the Caribbean and Latin America, there are other markets globally where all-inclusive is becoming more and more relevant. The Middle East has a lot of all-inclusive players, Southeast Asia has a lot of activity. And that represents real opportunities for us.

Q: With a lot of other big global brands also growing their all-inclusive footprints, how does Marriott International plan to stand out?

A: The strength of our loyalty program will be a big differentiator. As will the fact that we are selectively deploying some of our luxury brands in all-inclusive — a Ritz-Carlton all-inclusive, well executed, is going to be different from anything available in the landscape. The all-inclusive landscape is crowded and there are lots of independent players. And for the traveler that’s considering an all-inclusive vacation, that can be hard to navigate. Everybody has beautiful pictures on their website. Everybody’s narrative talks about luxury this, luxury that. I think the brand awareness that we enjoy will help travelers navigate that crowded space. And we’ve seen it with the Ritz-Carlton Yacht. If somebody says, “Oh, there’s a Ritz-Carlton all-inclusive resort,” they immediately understand what their expectation should be on product quality and service delivery.

Q: Where do you see the most opportunity to elevate the all-inclusive experience?

A: At the luxury end of our all-inclusive pipeline, [there’s opportunity] to really get creative with food and beverage. The ability to offer a bunch of bespoke food and beverage experiences in the luxury all-inclusive environment is an area our teams are very focused on. And maybe tangential to that is activations. People crave experiences. As I talk to our all-inclusive operators, not only are they offering great bespoke curated food and beverage experiences, but educational [experiences too]. Wine tastings, cooking classes. I was in Mexico, and I sat in on an agave class, where they said, “You’re probably familiar with tequila and maybe mezcal. But let us teach you a little bit about raicilla and some of the other agave spirits that are developed throughout Mexico.” In some of the plans I’ve seen for some of the all-inclusive resorts we’re developing, there are teaching studios, where you can bring in chefs and curate some experiences beyond the beach.

Q: Can we expect to see any new brand development or expansion from Marriott International this year?

A: As we’ve grown our portfolio, I’d like to think we’ve struck the right balance of the creation of organic growth platforms — Autograph Collection is a great example of that — with strategic acquisitions; AC Hotels would be a great example of that latter category. One of the benefits of our industry-leading scale is that I don’t feel a burning need to do M&A just for the sake of gaining scale. If we do any M&A, it’s to fill either a gap in our brand architecture or give us presence in a geography where we’ve struggled to grow organically.

Q: Any specific gaps you’re looking to fill right now?

A: We look at everything. 

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