The hospitality industry has been suffering as tourism dried up during the pandemic, but as Covid vaccine distribution gains headway, Marriott CEO Tony Capuano expects business will bounce back.
“As the vaccine gets widely distributed, we see pretty strong and steady prospects for demand growth,” Capuano told CNBC Wednesday.
Capuano was recently tapped as the hotel chain’s CEO, following the death of its former leader Arne Sorenson on Feb. 15. Sorenson had been battling pancreatic cancer.
Capuano has been with Marriott for 25 years and prior to being appointed CEO was the head of global development where he grew Marriott’s portfolio including brands like Fairfield and Residence Inn. Limited service hotels remain one of Marriott’s most successful brands, even during the pandemic.
However, Wall Street analysts say the real key for Marriott will be the resumption of business travel. Sixty percent of Marriott’s bookings in 2019 were from business travelers. Since more companies now are adapting to remote workplaces, some industry watchers are worried the trend will dent the hotel industry forever, but not Capuano.
He declined to provide a timeline for when business travel will return in earnest. However, Marriott’s customers have told the company that they’re “anxious to get out there and be face to face with their business partners and customers,” Capuano said.
However, leisure travel will likely lead the recovery, he said.
Marriott is the largest hotelier with 1.4 million guest rooms worldwide. Average occupancy across the hotel industry in the U.S. currently stands at 48%, the highest since October.
Global markets like China are seeing some rebound already, as the country adapted quickly to contain the virus and administer vaccines, he said.
One bright spot within travel during the pandemic: vacation rentals.
Unlike other lodging companies, Marriott made the plunge into rental homes in 2019, launching Home & Villas. Capuano said its platform now has 25,000 properties. Rival Airbnb has over 5 million active listings.
“I don’t ever anticipate us being anywhere close to the scale of Airbnb,” said Capuano.
Airbnb will release its first quarterly earnings report as a public company on Thursday afternoon. Its shares have had a stellar performance since going public, up nearly 200% to a market value of more than $120.34 billion, more than double that of Marriott.
Marriott shares hit a 52-week high of $157.60 in trading Wednesday, and closed up 5% at $157.50. With a gain of nearly 17% over the past year, Marriott has a market value of about $51.1 billion.
In addition to competing against disruptors like Airbnb in the travel industry, Capuano inherits the tough task of being compared to Sorenson, who was deeply respected across the industry and was known for being a compassionate leader.
Source: Business - cnbc.com
