HM Q&A: ANTHONY CAPUANO

It’s an exciting time for New York, as the US opened its borders to inbound international [travel]. A lot of the big global gateway cities here in the US will benefit [from that], maybe none more so than NewYork. [It’s] trending back the right direction. I had a cabdriver yell at me yesterday, so it felt more like being backin the city.

That’s exactly right. It’s the brightest lit stage in the world, and so if you intend to launch a brand that has global aspirations, you’ve got to have a showplace inNew York. And I also think, certainly pre pandemic, the RevPAR potential of this market was such that you could stretch a little bit to really showcase what the brand could be. I think that’s true with the first Edition at Clock Towerin New York, and I think it’s true with our first big Moxydown by Penn Station.

No, I’m not. For two reasons: I always think about us having two customer bases, our guests, obviously, but also our owners and franchisees, and they’re human beings, so they tend to want to develop things that resonate with them. We’ve seen across all the quality tiers in our portfolio, a strong and growing affinity for lifestyle-focused brands. That can be all the way at the luxury end of the spectrum with Edition, or it can be at Moxy – something that has a distinct design sensibility, some creative food and beverage solutions – so I’m not surprised at all. I think with our guests, particularly that Moxy guest [which] shades younger, all they’re really doing is taking a shower and sleeping in their room. They want to be visible in the public spaces, and I think Moxy really fits the bill.

That’s right. I think we’ve been deliberate. Years ago, as we started to hear more and more about this appetite for ‘lifestyle’ — that might be an overused word, but not cookie-cutter from a design perspective, a real local feeling to the food and beverage — we looked at our portfolio and said 'we've got some gaps'. We added Edition, organically, we added W through the Starwoodacquisition, we added Element, which is really a nice complement to Residence Inn with more of a lifestyle feel. We developed Moxy organically. And so, I think we've done a really nice job of building out the portfolio where there are lifestyle options for our guests and our owners at almost every price point.

I think that’s right, but I think maybe the pandemic has just accelerated it a bit. It’s really interesting, I get so many questions and have really vibrant discussions about what has fundamentally changed about our industry as a result of this terrible pandemic, but the vast majority of the changes were initiatives that were already in place, we just saw an acceleration. Take adoption of technology, for example. We already had mobile check-in, mobile key, chat functionality with the hotel, but because of safety concerns, you saw an acceleration in adoption. Similar to your point on wellness, all of a sudden people are not having to get up so early because they weren't commuting to the office, and they were reminded of the really powerful health impacts of sleep. Westin had already taken a leadership role in promoting the wellness benefits of a good night’s sleep, so it’s just accelerating as a result of the pandemic. I think the same is true with fitness and healthy eating.

I do. I am bullish about the future of business travel, but I think it’s going to look a little different. I’ve saidconsistently that’s great for our business. I just cameback from Europe. For probably 20 years, I’ve gone tothe Berlin (IHIF) investment conference. I’d fly over ona Sunday night, I’d spend two days and I would fly back.This time I went for 12 days. And in those 12 days, I wasa business traveller, I was a group meeting attendee, and I even snuck in a couple days of leisure travel. Ithink that blended trip purpose [will be big]. If we had been together in the lobby here five years ago, we could have watched every person walking off the elevator and said, ‘she’s a business traveller’, ‘he’s a group meeting attendees and ‘she’s a tourist’. That will be harder now,and I think that’s good for us.

It was, but I think the recognition that came from necessity, that you can work from almost anywhere, has caused all of us to think about these trips differently. [People are thinking] let me tack on two days at the front or two days at the end [of that trip] and get a little bit of leisure time.

It is, and it’s one of the things that I love about the creation of Craig’s role, the fact that, at one point, Craigran our CALA [Caribbean and Latin American] business.He started his Operations career in the Caribbean and Latin America, he’s a fluent Spanish speaker, but then he spent about a decade in Asia Pacific. We’ve got individual continent leaders, Brian King in CALA, Raj[Menon] in APAC, Henry Lee in Greater China, and Satya[Anand] in EMEA, but you also have Craig that can rise one level higher and look at broad macro- and sociopolitical trends. I really like the way we’ve structured our international business.

I do, and I characterise them in the most affectionateway by saying they’re a ‘battle-tested team’, becausethey’re such a long-tenured group. We’ve been shoulderto shoulder through conventional recessions, wars, theGreat Recession, the events post 9/11, Arne’s diagnosis– it’s a team that by necessity, probably, is performingoptimally in the face of crisis. To your point, I’ve had lotsof folks say, ‘my goodness, you’re trying to follow Arne,you’re doing it in the face of the biggest crisis the industryhas ever faced, isn’t that a daunting task?’ My answer isalways consistent, and that is: ‘It would be a terrifyingtask if I had to do it alone’, but I’ve got this incrediblebattle-tested, long-tenured global leadership team, andI’ve got tens of thousands of associates who send meencouraging notes every day. It is most certainly a bigchallenge, while the business trends are really compellingand encouraging, we’ve still got a steep hill to climb.

Absolutely. What was so interesting, the first day I was announced in the new role, I got almost 20,000 emails from associates, but, what I’ve not really talked about publicly, a big chunk of those were from furloughed associates, who just said, ‘we can’t wait to come back’,‘tell us what you need’, and it’s hard not to be optimistic about the future of the industry, and particularly about the future of Marriott, when you see those passionate associates around the world.

The biggest challenge that I see on the labour front, at least in the US, [is that] of all the jobs that were lost as a result of the pandemic, one in five was from travel and tourism. My guess is there are similar statistics around the world. Some of those folks may not come back. Asa result, we’re getting good traction hiring, but we're seeing a higher percentage of applicants than we've ever seen without hospitality experience. So, we’ve got a bit of training that we need to do to remind folks about things that for all of us that have been in the industry so long are reflex, a warm, genuine greeting, picking up a piece of paper on the floor as you’re walking through the corridor. I’m confident, we’ve got terrific training programs, both in person and virtual, but that’ll create another little complexity for us in the short term.

Right, it’s certainly one of our aspirations. I think about myself with my family as a kid, it was a big deal to go to a hotel to have dinner. It was a real occasion, everyone got dressed up. I don’t know that they’ll get dressed up anymore, but I do think hotels with activated public spaces have the potential to almost be these urban country clubs. I was [staying] at the London Edition, and had breakfast there. I was looking around and I asked the restaurant manager ‘Are these hotel guests?’ He said,‘I think you’re the only hotel guest in the restaurant’.So, it’s those local residents in the Fitzrovia area of London that have decided ‘That’s our place’. And that's great news for our business. It gives us revenue volumes that allow us to innovate and be creative with food and beverage program. I think we’ve got a really unique window of opportunity right now, not only with patrons, when you look at the number of independent restaurants that have closed, in terms of our ability to attract really unique culinary talent to our hotels. We need to take full advantage of that.

We do. If you look at our existing global footprint and combine that with our luxury pipeline, the last time I looked, that footprint was bigger than the next three global players combined. We have a tremendous foundation to build on. I think that foundation is really enhanced by the strength of our branded residential business. 2020, I hope all of us will look back someday and say ‘Worst year in the history of our industry’. It was the best year we’ve ever had in our branded residential business, and the economics of those branded residences as a real accelerant for the pace of luxury growth.

I’ve always had a deep appreciation and affection for the strength of Marriott’s culture. I’ve never valued it more. It really served as, I think for all of us, a real ‘True North’ as we navigated [the pandemic]. I think those tenets of our culture really served us well. I think, secondly, the importance of transparent communication.I think some of Arne’s video messages will likely be used in business schools for decades to come. He was honest, he was empathetic, but he was transparent in his communications, and I think the value of that sort of communications is one of my biggest takeaways.