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00:00WE GET THE ANSWERS. > > THIS IS OUR PART OF THE QATAR ECONOMIC FORUM, I’M SO PLEASED TO WELCOME IN TONY CAPIANO. IT’S GREAT TO SEE YOU. > > THANKS FOR HAVING US. > > I WANT TO STAT THE BIG PICTURE BECAUSE INFLATION IS RAMPANT. THE FEDERAL RESERVE IS RAISING INTEREST RATES. AND THERE’S MORE AND IN EUROPE AND THE BIG IS. HOW THAT SHOWING UP IN THE GLOBAL TRAVEL AND LODGING INDUSTRIES IT’S FROM WHERE YOU SIT. > > INTERESTINGLY THAT’S TODAY VS. NOT. THE PACE IS REALLY ENCOURAGING. AND REALLY CONSISTENT. IF YOU LOOKED AT THE END OF THE FIRST QUARTER, OBVIOUSLY, WE HAD A BIT OF AN INTERRUPTION IN JANUARY AND FEBRUARY FROM THE OMICRON VARIANT. BUT IN MARCH, OUR RUMOR WAS DOWN EIGHT TO%. AND IN THE U.S. OUR LARGEST MARKET, WE WERE BACK TO 2019. AND SO ALL OF THE POTENTIAL IS RED WINGS. BUT WE’VE NOT SEE IT IN > > HOTELS CLEARLY ARE BENEFITING FROM REVENGE TRAVEL. IN WHICH MARKETS AND WHAT SPECIFIC WAYS ARE YOU SEEING THAT DEMAND IMPROVE THE SUMMER? > > CERTAINLY WE HAVE SEEN THE RECOVERY BROADLY LED BY ATLEE -- LEISURE TRAVEL. THE ENCOURAGING THING FOR OUR BUSINESSES WE ARE SEEING PARALLEL RECOVERY BUSINESS TRAVEL. IF YOU LOOK AT THE FORWARD BOOKINGS FOR GROUP, DURING OUR FIRST QUARTER EARNINGS CALL, WE SUGGESTED THAT IN THE LAST THREE QUARTERS OF 2022, GROUP DEMAND WILL BE DOWN HIGH SINGLE DIGITS TO 2019. BASED ON WHAT WE HAVE SEEN OVER THE LAST 60 DAYS, WE NOW BELIEVE WILL ONLY BE DOWN MID SINGLE DIGITS. LAST MONTH WE WERE ONLY DONE 6%. BUSY TRIP -- BUSINESS TRANSIENT HAS BEEN SLOWER TO RECOVER. AT THE END OF THE FOURTH QUARTER, WE WERE DOWN ABOUT 30%. WE ARE NOW DOWN ONLY 10% TO 15%. NOT AS RAPID RECOVERY, BUT STUDY. > > I WENT TO DISS -- DIG INTO THAT BUSINESS ASPECT. THE ADVENT OF HYBRID AND REMOTE WORK HAS BLURRED THE LINE BETWEEN BUSINESS AND LEISURE. YOU ARE SEEING PEOPLE BRING THEIR FAMILIES ON BUSINESS TRIPS, HOW ARE YOU CHANGING UP YOUR OFFERINGS TO CAPTURE TRAVELERS WHO ARE STAYING AT YOUR PROPERTIES FOR BOTH WORK AND PLAY AS WELL? > > WHO ARE RAISING ONE OF THE MOST FASCINATING AND ENDURING TRENDS THAT WILL COME FROM THE PANDEMIC. THAT IS THIS IDEA OF BLENDED TRIP PURPOSE. OUR FIRST QUARTER EARNINGS CALL, WE TALKED ABOUT ANALYZING DEMAND RECOVERY BY DAY OF THE WEEK. IN A PRE-PANDEMIC WORLD, MONDAY, TUESDAY AND WEDNESDAY WHERE THE TRADITIONAL BUSINESS TRAVEL DAYS. FRIDAY, SATURDAY WHERE THE TRADITIONAL LEISURE TRAVEL DAY. THURSDAY AND SUNDAY HAVE BEEN TWO DAYS THAT HAVE RECOVERED MOST QUICKLY, WHICH EMPIRICALLY ILLUSTRATES THE POINT YOU MADE SAID THAT MORE AND MORE GUESTS ARE COMBINING BUSINESS AND LEISURE TRAVEL. WHILE IT IS MORE DIFFICULT TO MODIFY THE PHYSICAL ENVIRONMENT, SOME OF THE PROGRAMMING WE ARE DOING IN TERMS OF FITNESS, SPOT, FOOD AND BEVERAGE IS -- SPA FOOD AND BEVERAGE IS EVOLVING. > > THAT IS INTERESTING HOW THURSDAY AND SUNDAY HAVE BECOME THE BUSY DAYS OF THE WEEK FOR YOU. YOU MENTIONED MODIFYING THE PROPERTIES, MAYBE THAT IS NOT NECESSARY. YOU ARE COMPETING WITH AIRBNB IN OFFERING PRIVATE HOMES FOR RENT. IS THIS A WAY TO PREVENT CUSTOMERS FROM LEAVING THE MARRIOTT FAMILY OR MORE ABOUT CAPTURING A NEW CLIENT BASE? > > MORE THE FORMER. WHEN WE TALK TO OUR CUSTOMERS, AND WHAT WE HEAR FROM THEM, SO MANY OF OUR STRATEGIC DECISIONS, WE HEAR FROM THOSE CUSTOMERS THAT FOR A SPECIFIC TRIP PURPOSE, A MULTI-BEDROOM FULL HOME THAT ARE SERVED THERE NEEDS. THE LAUNCH OF MARRIOTT HOMES AND VILLAS ALLOWS US TO KEEP THEM WITHIN THAT MARRIOTT ECOSYSTEM. DURING THE PANDEMIC, WE SAW EXPLOSIVE GROWTH IN THAT PLATFORM. PRE-PANDEMIC WE ONLY HAD ABOUT 3000 LISTINGS GLOBALLY. WE ARE NOW PLUS OR -6000 LISTINGS. > > HE SAID EARLIER THAT SUMMER BOOKINGS ARE LOOKING GOOD. THIS IS IN SPITE OF RISING PRICES ON EVERYTHING. FOOD TWO PLANE TICKETS TO FUEL. WHAT KIND OF ADJUSTMENTS OR CONCESSIONS TO SEE CUSTOMERS MAKING AGAINST THIS BACKDROP OF INFLATION? > > IT VARIES SIGNIFICANTLY BY MARKET. IF YOU ARE IN A LEISURE MARKET WHICH HAS RECOVERED MOST QUICKLY, THE PRICING POWER IS REMARKABLE. CUSTOMERS UNDERSTAND THAT. THEY MAY BE MODIFYING DATES IF THAT PRICE DOES NOT FIT THEIR BUDGET OR THAT BUDGET HAS BEEN CONSTRICTED BY AIRLINE PRICES OR GASOLINE PRICES. WE HAVE SEEN NO SLOWDOWN IN THE STRENGTH OF THE PRICING POWER. WE DO SEE SOME OF OUR CUSTOMERS PICKING URBAN DID -- DESTINATIONS WHICH HAVE BEEN SLOWER TO RECOVER AND MORE MODEST IN TERMS OF PRICING. IN LEISURE DESTINATIONS, WE HAVE SEEN REMARKABLE PRICING POWER. PEERS IN THE U.S., OVER MEMORIAL DAY WEEKEND, OUR AVERAGE RATE WAS 25% HIGHER THAN 2019. / > > WHAT IS AN EXAMPLE OF AN IMPERCEPTIBLE CHANGE MARRIOTT HAS MADE IN RESPONSE TO YOUR RISING COSTS? > > BY NECESSITY THROUGH THE PANDEMIC, WE CONTINUED TO LOOK FOR OPERATING EFFICIENCIES. NOT ALL OF THOSE EFFICIENCIES ARE SPECIFICALLY TO CUT COSTS. THROUGH THE USE AND GREATER ADOPTION OF SOME OF THE TECHNOLOGY WE HAVE IN PLACE, IT CREATES CAPACITY FOR OUR EMPLOYEES TO MORE DEEPLY ENGAGE WITH OUR GUESTS. CONTINUE TO LOOK FOR US TO IDENTIFY THOSE OPPORTUNITIES. > > WANT TO THANK YOU SO MUCH FOR YOUR TIME. TONY IS CEO OF MARRIOTT. > > THANK YOU VERY MUCH.

Marriott CEO on Future of Global Lodging

Anthony Capuano, CEO, Marriott International discusses the current state of the hotel industry and the future of global lodging with Bloomberg’s Scarlet Fu at the 2022 Qatar Economic Forum. (Source: Bloomberg)