Luxury Travel Advisor’s parent company, Questex, owns the International Hospitality Investment Forum (IHIF), which recently convened in Berlin, bringing over 1,200 senior leaders in global hospitality investment and development together for the first time in 18 months.
Tony Capuano kicked off the IHIF conference by speaking about how humbling it was to step into the position of Marriott International’s CEO, following the tragic passing of Arne Sorenson this February. Capuano told the IHIF audience that the day the Marriott board announced his appointment, he received 18,000 emails from colleagues around the world—some on furlough because of the pandemic—offering their support.
“I think their true love of this industry, the manner in which they care for each other, the manner in which they care for our guests, gives me enormous optimism about the ability to navigate the crisis that still is very much in front of us,” Capuano told the audience.
He said he’s seen that same collaborative spirit in the entire hospitality industry throughout the pandemic.
“While we all have competitors and we all want to excel on behalf of our shareholders, maybe the most admirable thing about the last 18 months is the way that big brand companies have come together for the benefit of the industry,” said Capuano. “The brands and owners and franchisees have come together to innovate and brainstorm about how best to navigate the crisis. We were faced—and continue to be faced—with a formidable and common crisis, and the collaboration I have seen has been inspiring and should fill us all with optimism.”
Moving Forward
The hospitality industry has another crisis to face, that of the ongoing labor shortage. Capuano cited statistics indicating that 20 percent of employees in travel and tourism globally have left the segment permanently.
“That will be among the most significant challenges we have to navigate: How do we restore confidence that this is not only an exciting and interesting industry but an industry where people can build lifelong careers?” said Capuano. “How do we wrestle with some of the employees we will be required to hire who don’t have deep experience in hospitality, and, as a result, we end up with a much steeper training curve?” he said.
Other labor issues of the future will come as the result of the social mindset of the graduating classes about to enter the work force.
“I am the proud father of a 21-year-old who is in hospitality school, and I have the opportunity to speak with her and her classmates as they are making decisions about their future,” said Capuano. “They seek companies whose values dovetail with their own, and they are not satisfied by flowery language in an annual report statement about commitment. They want to look at [a corporation’s] demonstrated commitment and demonstrated progress in many of these areas as they make their decisions about to who they are going to join,” said Capuano.
Along these same lines, diversity is another key imperative for the hospitality industry if it is going to attract good talent in the future.
“The highest potential talent that’s out there, that’s considering where they want to start or continue their careers, want to see people that look like them in the C-suite,” said Capuano.
He cited the example of having toured The Ritz-Carlton Berlin the day before and meeting seven apprentices. All of them were women.
“Two of them said to me, ‘It is of great inspiration that we look at Marriott’s C-suite. The president is a woman, the chief financial officer is a woman and the general counsel is a woman.’”
Capuano noted that 60 percent of his direct reports within the Marriott organization are female. “They look at the gender distribution on our board of directors. They look at the fact that our board of directors just celebrated its 20th anniversary of its diversity and inclusion council. There are shockingly few Fortune 500 companies that have a board-level committee focused on this issue,” he added.
At the same time, he sees potential for Marriott to become even more diversified. “Even with that track record of which I am enormously proud, our work is far from done,” Capuano told the audience.
Lessons Learned
At the end of it all, the hotel industry remains a cyclical one. A pandemic is certainly out of the ordinary, but the lodging business has normal ebbs and flows spurred by changes in the economy, consumer behavior, global issues and natural disasters. Occupancies go up and down and the best hotel executives are educated to deal with them as they come.
Capuano says that coming out of COVID, the hotel industry should reinforce certain basics, such as a thoughtful stewardship of the balance, as well as geographic diversity.
“Even through this crisis, we’ve seen some markets recover very rapidly with extraordinary pricing power,” said Capuano. “We’ve seen other markets—even within an individual country—struggle mightily to get traction [with their local markets]. When you look across the world, perhaps the markets that have thrived most significantly in terms of recovery are the U.S. and China—both of which were in a position, almost from the outset, to mine the deep pockets of domestic demand.”
At the end of all, he remains inspired by the business.
“I am just so encouraged by the manner in which fierce competitors—whether they are on the ownership side, on the lending side, or on the brand side—have pulled together to try to navigate this unprecedented crisis,” said Capuano.
And then there are those on the ground, doing the hard day-to-day work of keeping a hotel running. Capuano said he saw that clearly in his trip to Berlin, his first visit to Europe in two years.
“The most notable observation for me as I’m back on the road is that of the resiliency of our people. They are so excited to have guests back in the hotel. That resiliency should give us all optimism,” he said.
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