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Marriott CEO Anthony Capuano on the future of hospitality post-pandemic

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Marriott appointed Anthony Capuano as the company's new CEO, following Arne Sorenson’s tragic death. Marriott CEO Anthony Capuano joins Yahoo Finance Live to discuss how the hotel industry is faring amid pandemic and break down what the future holds for the hospitality industry as coronavirus cases continue to spike across the globe.

Video Transcript

- The world recently lost a titan in global business and, above all else, a good human being that touched many lives worldwide. Longtime CEO-- longtime Marriott CEO Arne Sorenson unexpectedly passed away on February 15 after an extended battle with pancreatic cancer. While the Marriott team continues to mourn the loss of Sorenson, it announced his successor as CEO this week to lead the company forward.

Joining us now is Marriott's new CEO, Tony Capuano. Tony, good to speak with you here. You know, I think you put it best in the press release yesterday announcing this decision. This is a bittersweet moment for you. What was your reaction when you got that call that you would be succeeding Arne Sorenson?

ANTHONY CAPUANO: Well, good morning, Brian. Nice to see you again. To state the obvious, it was humbling, but also energizing. If Arne were here, he would tell us to continue to move forward. And I think our associates, our customers, our guests around the world-- they are anxious to help us achieve the sort of recovery that they hope for. [AUDIO OUT] you and I have [AUDIO OUT], people are anxious to get back on the road. And part of my new responsibilities is to do everything we can to ensure that guests feel safe and feel confident as they start to travel again.

- You know, I think a lot of people would still be surprised that Mr. Marriott-- he's still at the company. He's the executive chairman. Have you had a chance to talk to him? And what-- you know, what has he told you about assuming this position?

ANTHONY CAPUANO: Well, he-- I-- your first question-- I think I've spoken to him a dozen times in the last two days. He is a very engaged chairman. He loves this company. And he is an extraordinary role model in terms of continuing to carry the Marriott culture forward.

And I think that's been his principal message, that this company has thrived for nearly a century. And the fundamental foundation underpinning that success is this notion of putting people first, of taking care of our associates around the world. And he has encouraged me to adopt my own leadership style, but through the lens of that culture, which is really the company's true north.

- You had a chance to really work with Arne hand-in-glove for many years. How did he help prepare you for this position?

ANTHONY CAPUANO: Well, you're right. And it was a profound privilege for me. There are so many wonderful attributes that Arne had as a person, as you pointed out, and certainly as an executive and a leader. I think authenticity is an attribute that comes to mind. As Arne met folks, whether they were partners, associates around the world, they knew with confidence that he was engaged in the conversation, that he cared about them, that he cared about what they had to say.

I think secondly, maybe intellectual curiosity-- Arne was a continuous learner. You rarely saw him without a book under his arm. And I think it was that curiosity that made him such a global citizen and such an engaged leader.

- Well, Arne was also a bit of a road warrior-- I mean, what, on the road for over 200 days out of the year? How will you spend your first 100 days as CEO?

ANTHONY CAPUANO: Well, I wish I could tell you I could spend all 100 on the road. That would be my strong preference. I want to get out and meet with our partners and visit our hotels and connect with our associates.

Unfortunately, some of-- I don't have the absolute latitude that I had, given the closing of some of the borders. But I will get out on the road as schedules permit. I've got a whole schedule of virtual meetings with our partners, with our general managers, with our business councils in the coming days. And I'll continue to engage with our senior leadership team around the world and make sure they have all the tools and all the resources to help us drive demand.

- Talk to us about the state of the Marriott business. We've seen a rally this year in shares of lodging companies. Your stock's up close to 14%. Hilton's up close to about the same. Are you seeing green shoots of a recovery in the US, but also China? I know China is very important market for Marriott.

ANTHONY CAPUANO: Yeah. Maybe I'll start with China because I think China gives us all so much optimism about the near term future of travel. As I'm sure you know, we have nearly 400 hotels in China. In fact, we just opened our 50th hotel in Shanghai. And because the country has done such a good job on virus containment, we're seeing occupancy levels return to nearly pre-pandemic levels.

But we are also pragmatic. As we look at other markets around the world, we see that when there are spikes in infection rates, it has a fairly chilling effect on demand patterns.

We are, as you rightly point out, seeing some green shoots in markets like the US, certainly led by leisure transient demand. But we're seeing those green shoots in business transient as well. And that's quite encouraging.

- The business travel environment-- you know, has it been changed forever because of the pandemic?

ANTHONY CAPUANO: Well, as you know, Brian, lots of folks have lots of opinions about that. We tend to have our opinion about the future of business travel informed by what we hear from our customers. And while I-- you know, I think leisure will continue to lead the recovery.

We are quite confident about the medium- to long-term future for business travel. And we don't think there is a fundamental and permanent change in demand for business travel. In point of fact, what we hear from our business transient customers is they can't wait to get back on the road, to meet with their business partners, and to meet with their customers.

- It seems as though, just, you know, having followed Marriott through the years, since-- really, since the Starwood deal, you guys are always getting questions on the number of brands-- what, 30 brands in the portfolio? Do you still like the fact that 30 brands-- do you still like that fact that you have 30 or do you want to slim down a bit?

ANTHONY CAPUANO: We love that we have 30 brands. And I think the principal driver of that love is this notion of breadth of choice, both from our consumers and our owners and franchisees.

Our consumers have lots and lots of trip types. And they may very well, in the course of a year, for a business trip stay in one of our select brand hotels. And then they may take their vacation with their family in a premium or luxury brand.

Similarly, for our growth partners, our owners and franchisees, they often want to continue to grow their portfolios within the Marriott ecosystem. And giving them that breadth of choice, I think, is a tremendous advantage for us.

- I think the last time I talked to you was August 2019, believe it or not, in our headquarters in New York City. It feels like a lifetime ago.

ANTHONY CAPUANO: That's right.

- And we talked a little bit about the budding, at the time, home rental business. Now, that business has now reached 25,000 units, luxury homes in many cases. Is that moving the needle financially? And what are your plans for that business?

ANTHONY CAPUANO: It's not particularly material financially today. But we think it is a really important complement to our core lodging business. As you'll recall, when we launched in 2019, we only had about 2,000 units. Now we're 25,000 units. Ideally, by the end of the year, we'll even be growing across Asia-Pacific.

And the value proposition for us is whole home rentals only. We're not doing home sharing in the traditional sense. We're [AUDIO OUT] focused on the upper end of the market, whole home rentals.

The value proposition, I think, is really predicated on safety, on service, and of course, a link to our Bonvoy loyalty program. And the reason I say it's a great complement to our core business-- we know from talking to our customers for certain, very specific trips, they prefer a home rental. And the homes and villas platform really allows to keep them within the Marriott family for all of their trip types.

- All right. We'll leave it there for now. Tony Capuano, Marriott's news CEO, good to see you.

ANTHONY CAPUANO: You too, Brian.

- Congratulations on this appointment-- look forward to following your CEO journey, very well deserved. Stay safe. We'll talk to you soon.

ANTHONY CAPUANO: Well, thanks very much. I hope our next visit is in person.

- Yes, that would be very, very, very good, maybe inside a Marriott hotel. We'll talk soon.

ANTHONY CAPUANO: Absolutely. Thanks, Brian.