- Marriott International named Tony Capuano its new CEO on Tuesday.
- Its previous CEO, Arne Sorenson, passed away last week. He was a beloved figure in the hotel world.
- Capuano spoke to Insider about how he plans to face the challenges ahead of him.
- Visit the Business section of Insider for more stories.
Marriott International has named Tony Capuano as its new CEO. Capuano’s appointment comes eight days after the death of the company’s longtime president and CEO, Arne Sorenson, of pancreatic cancer.
In an interview with Insider on Tuesday, Capuano said that taking the reins as CEO of the hotel giant is a bittersweet moment, as he admired and worked closely with Sorenson for years. However, there are a few specific things he learned from Sorenson that he intends to adopt as CEO.
“I’ve always had this perspective that listening is one of the lost skills in our world, and I think that Arne was the best listener I’ve ever met with,” he said, adding that that statement would apply to both everyday social interactions and board room presentations.
“He would look folks in the eye, he would engage them, he would make them feel special and welcomed,” Capuano said.
Sorenson’s intellectual curiosity is another quality he hopes to emulate.
“He had a genuine curiosity about the world that made him a much more complete person and a much more effective leader,” Capuano said.
Capuano has been with Marriott since 1995, most recently serving as the group president of global development, design, and operations services. Marriott’s footprint expanded drastically during his time in that role, growing from about 3,200 properties at the beginning of 2009 to 7,600 by the end of 2020. Marriott’s development pipeline has also ballooned to 498,000 over that same period, with more than half of the rooms set to be built outside of the US.
In fact, Marriott’s story over the last decade has been one of enormous growth. Under Sorenson, the company’s first CEO outside of the Marriott family, Marriott International acquired Starwood Hotels & Resorts, becoming the world’s largest hotel group in 2016. The deal was valued at $13 billion. And despite elongated headwinds in merging Marriott’s and Starwood’s loyalty programs, Marriott International’s portfolio now sits at 30 hotel brands in 133 countries.
But the task Capuano is currently facing is much more immediate. He is taking the reins at Marriott during an unprecedentedly difficult period for the hospitality giant and the hotel industry at large.
On February 18, Marriott reported a worldwide 64.1% decline in RevPAR — or revenue per available room, a metric the hospitality industry uses to demonstrate success — for the fourth quarter of 2020. In North America, RevPAR was down at least 19.5% every quarter last year, including an 83.6% drop in its second quarter, the peak of the pandemic in the US.
In the earlier phases of the Covid-19 pandemic, Marriott’s global occupancy rates also collapsed into the low teens, though they have since rebounded to 35% in the most recent quarter.
Getting travelers back in hotels again
Capuano said that there are many factors that could impact the company’s recovery but that they are ultimately out of its control.
“We can pull the levers that we have to help the hotels improve their operating margins. We can use the platform of our Bonvoy loyalty program to try and generate interest in travel,” he said. “But until the virus really starts to recede, there’s only so much we can do.”
He said that while the company has required mask-wearing and social distancing in its properties’ common areas, he thinks it will take a successful vaccine rollout for travel to recover to pre-pandemic levels.
“I think there is a segment of the traveling public that, despite everything we’ve done to give them some measure of confidence, likely won’t travel the way they did pre-pandemic until they’ve got confidence that the majority of citizens around the world have been vaccinated,” he said.
Still, Capuano noted that Marriott has made several changes during the pandemic that he expects to stick going forward.
For example, as part of its “Commitment to Clean” initiative, which Capuano led, Marriott has revamped its cleaning protocols and changed the frequency of its housekeeping services to meet guests’ preferences. While some guests enjoy having crisp, clean linens each day, others may enjoy the privacy of not having a cleaning crew enter their room during their stay, he said.
The pandemic has also accelerated Marriott International’s investments in new consumer-facing technologies like contactless check-in and check-out. Mobile Key, on the Marriott Bonvoy app, is available in over 4,000 locations.
Finally, Marriott has had to scale back some of its food and beverage offerings, particularly breakfast buffets.
“My intuition is that many of those will come back, but our decision-making will really be guided by what we hear from our customers,” Capuano said.
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