Marriott chief hails leisure recovery following surge in demand
Marriott International has reported a “strong recovery” in hospitality “led by leisure” and confirmed plans for continuing growth despite staff shortages and a slower return of corporate travel.
Anthony Capuano, Marriott International chief executive, hailed a rapid return of “pricing power” and suggested the only barrier to growth comes from lagging investment in hotel construction as the sector recovers from the pandemic.
However, the Marriott chief conceded he is less optimistic about the industry developing a common set of metrics for assessing its environmental footprint than he is about the recovery.
He argued: “There are so many facets to ESG [environmental, social and governance] requirements, it seems logical to have a common set of measures. But I worry it will never happen.
“It seems so obvious for there to be a single platform for Covid health requirements, but the industry gave up on that.”
Capuano took over as Marriott chief executive in February last year following the unexpected death of predecessor Arne Sorenson, having worked for the group since 1995.
He highlighted a “surge in global demand” earlier this month when reporting a profit of $377 million for the first quarter of this year.
Capuano told Travel Weekly: “We see a strong global recovery led by leisure, [and] a steady recovery in corporate travel and meetings.”
He noted: “We finished 2019 19% down versus 2019 on revenue per available room [RevPAR] and we expect to close the gap on our 2019 performance meaningfully this year.”
The recovery in leisure destinations in the Americas has been “very strong”, he said: “Resorts in the Caribbean and Latin America have long-since surpassed 2019 levels.”
“Pricing power” in the regions now re-open had returned much more quickly than after “the last two big shocks, 9/11 and the financial crash, when it took years to recover and for pricing power to return”.
Elsewhere, he said: “The Middle East is perhaps the best example of open borders and vaccine distribution.
“We see signs of life across Asia-Pacific – Thailand, Australia and New Zealand are opening – but there is a way to go.
“China appeared fully recovered in the second quarter of last year. But by the end of 2021, China represented our most challenged market as a result of the government’s zero-Covid policy compounded by strict quarantine requirements for inbound travellers.”
Capuano conceded corporate travel “is going to be harder”, noting that when Marriott spoke to 1,600 partners at management services giant EY in the US they gave notice of “their intention to reduce business travel by 25%”.
Yet he added: “Big corporate clients, particularly in customer-facing businesses, tell us business travel is critical. Perhaps we’ll see business travellers take fewer trips but longer.
“I don’t think travel overall will be permanently impaired.”
The soaring cost of living everywhere has yet to hit hotel demand, he insisted, stressing: “We see no appreciable dilution in demand across our estate.” On the contrary, he argued: “In many markets, we see historic [levels of] household savings combined with pent-up demand.”
The issue he does highlight is recruitment, noting: “The challenge is most acute in markets which recovered most quickly. People may have left hospitality permanently. We’re seeing applicants who don’t have experience in travel and hospitality and it does create short-term challenges.”
Pre-pandemic, he suggested: “Travel and hospitality was viewed as a ‘safe harbour’ even after 9/11 and the financial crisis.
“The sheer magnitude of the pandemic” changed that. But technology can’t replace the missing staff, he insisted: “We’re a hospitality company at our core and hospitality is delivered most effectively by a smiling associate.”
Regardless of the challenges, “we’ve not curbed our plans for growth”, Capuano added. “Pre-pandemic we grew at a high single-digit rate. We have a high degree of confidence we’ll get back to that.
“Last year, we opened more rooms than in any other year in our history. If there is an inhibitor to growth it is construction. It varies by region, but the debt market has not been flowing freely. Some regulators, some banks are working through the implications of pandemic lending.”
Go to Source...