Anthony Capuano, Chief Executive Officer of Marriott International, Inc.

[Music] how many people think the best hotel company is marriott anybody all right okay okay so we're very pleased to have the ceo uh tony capuano is that pronounced correctly if we were in rome absolutely but that's a good italian pronunciation how do you pronounce it okay okay tony is a native of the most important city in the world baltimore which um born there right born and raised and he also has the advantage of being an only child right okay but then he transcended those modest beginnings and uh went to cornell and the hotel and hospitality school and then pretty much went to marriott from there no i spent about seven years in real estate and development consulting okay two years in boston five years in los angeles and uh who recruited you to marriott uh scott melby who ran our feasibility and market planning group that group got winnowed down to two or three people in the early 90s when marriott and host split and then when we got to the mid 90s they started to build that functionality back and you worked with rna for many years i assume i did he i started in 95 he started in 96. so you were there before he was but he was your boss though many times okay many times okay so let's talk about the marriott for a moment mary was started in 1927 she's selling reading it's 95th year and the person who was the son of the founder is just turned in march i guess 90 billion years old does bill married still call you up and tell you what to do yes and sort of he uh i probably talk to him three or four days a week it's a privilege every time he calls uh the the combination of wisdom and institutional knowledge he has is wrong but if he has a bad idea what do you say it's a good idea or you would how do you i'd say let us consider that okay that's a good way and then he'd call me an hour later and say did you finish considering that okay so he's no longer the chairman he stepped down chairman emeritus sharon emeritus and his son david david is now the chair correct and uh let me ask you a few things about the hotel business course and we'll get into some more specifics about marriott but right now it's been said in the washington post recently that travel is beginning to decline again after the covet and actually there's some concern that maybe people are because of a recession or inflation they're not spending as much does your data show that no uh intuitively the the confluence of interest rate environment inflation fuel prices would suggest that we'd start to see a slowdown we just haven't seen it in the data yet the summer numbers look extraordinary both here at home and outbound into europe memorial day weekend we saw revenue per available room which is a critical metric for us up about 25 over where we were pre-pandemic so we're just not seeing it okay and that's across the board in your luxury brands and your less luxury it is and it's it's been interesting to watch the recovery by demand segment as you would expect and as you've read the recovery has been led by leisure clearly uh but business transients now down 10 15 it was down 30 at the end of last year and group has really surprised to the upside group business has come roaring back there are three types of customers there is business leisure and group but there's something you recently coined the phrase with leisure i think it was what is that i hate that word so i'm not going to take credit for coining it but i i it's really this idea of of combined trip purpose and where we really see it in the data pre-pandemic monday tuesday wednesday nights were key business travel nights friday saturday leisure and thursday sunday were the shoulder days thursday and sunday demand has actually come back more rapidly than monday tuesday wednesday which suggests that folks are tacking on leisure to business trips pre or post now for many years you've been headquartered in bethesda and now you've moved into your new headquarters is that right uh july 1st live first you're moving in okay and why did you need a new headquarters what was wrong with the one you had i wish i could take credit for that idea but no i think a few things we are in a war for talent like many businesses today uh and our existing headquarters was in a suburban office park no real convenient access to public transportation no amenities within walking distance so to go into the heart of downtown bethesda we think a is going to help us in attracting talent and b should serve as a catalyst to get folks back to the office how many total hotels does marriott own or manage a little over eight thousand eight thousand and how many uh rooms do you have available uh about 1.5 million and of the eight thousand hotels how many are closed now because of coven i was pleased we get as you would expect during the pandemic we were getting a daily report on the status of the portfolio at the bottom of the trough we had more than 2 000 hotels closed as of yesterday for the first time i think since the pandemic started we dipped below 100 so we have 97 hotels closed and the total you have 120 000 employees something like that so let me make sure i understand it makes everybody understands there are more or less two basic ways that you can manage a hotel three one is you can own the hotel how many of those 8 000 you actually own 20 20. that's it i guess i'd be happy to sell them to everybody i don't even want to own 20. all right so all right so owning is not the wave of the future right now we are very much an asset lightning the other way is you get a management contract and you manage it i assume this hotel is right you manage us all the wonderful ladies and gentlemen that are taking care of you today are employees right so the 120 000 employees some of them are here those are your employees okay now the third way is franchise where you basically say what we license our intellectual property our brand access to our revenue engines our loyalty program but the employees are the uh employees of a third party manager okay and uh what's more profitable depends on the time of week the on its surface the franchise model we have a higher margin but in the managed system we earn incentive fees so we earn base management fees off top line revenue and we participate in the profits and so in an up market the managed model is quite profitable so how many different brands do you have 30. can you sign them off right now if you want we might run out of time so what is the ultimate luxury brand if i want to be in the ultimate luxury the greatest brand you have what is that well luxury is critical to our portfolio we have a number of luxury brands but i would say ritz-carlton reserve and bulgari bulgari how many bulgaries are there uh there are seven open and another several what do you i mean is the better bed what is it you do that makes it so much what do you do is that tv works better you're on paying more you uh no but i mean the the level of finish the locations the service level the employee to guest ratio uh the chef partners that we work with and food beverage suppose i don't want to be in a bulgarian i want to be in your lowest price least expensive what is that probably fairfield inn which is largely located on the highways and byways of the country although interestingly it's a brand that is starting to grow rapidly outside the u.s so what would it cost me to spend the night at there fairfield are you going to cincinnati or miami uh baltimore that's a tough one uh eighty dollars probably eighty dollars a night okay and for eighty days a night though i get my uh sheets changed every day so housekeeping is interesting um it obviously changed dramatically during the pandemic uh i think we've been running a bunch of test cases to determine what's housekeeping going to look like when the pandemic's in the rear view mirror i think what you'll end up seeing is in luxury no change full housekeeping every day just so if i stay at this hotel i don't have to say please change my linens correct i think in our full-service hotels we'll do a daily refresh maybe not a full clean and i think in our select service hotels like a fairfield probably in every other day so um sometimes hotels they say if you want your sheets changed specify but is that the wave of the future well certainly pre-pandemic a lot of players in the lodging industry looked at opportunities to give our customers choice in the interest of water conservation and and environmental i think going forward some of us are back on the road just like we were pre pandemic there are others that are still a little nervous about traveling and a little nervous about having staff come into their room so there has to be an element of choice now when you go to a hotel they often have these little bottles of shampoo and other things what percentage of people take those home well i see craig smith in the audience who runs our international division the answer is come january 1st no one because we're going to bulk amenities in all of our hotels globally which will allow us to eliminate about half a billion individual use plastic bottles that's for environmental reasons exactly so in other words from now on when you take a shower you have three buttons you can push one is the soap the other is the shampoo and the third one is the one that's never used conditioner right well one of the things i've said to the team we better put them in the same order because without my glasses i can't see i don't know what i'll be using okay but you're doing that because there's less it's better for the environment that's where everybody's going and and we hear i mean so much of the decisions we make about operating our hotels are driven by what we hear from our customers and they demand it hotels always tell me um they lose money on room service even though room service is not that cheap you lose money really on room service generally yes although we are re-imagining what room service might look like in a post-pandemic world because people now may be afraid of going to a restaurant so they eat in the room or or not yeah although our guests tend to have short memories those that are vaccinated maybe they've had and recovered from covet and they're back on the road and getting increasingly confident about traveling they want to quickly get back to where we were pre-pandemic hey what about many bars you lose money on those too really yeah how can you lose money on the prices by the way on the way here i tried to go get you your toblerone why not my theory is that in every the greatest salesman in the world are the people that sell pringles and toblerone because every mini bar in the world they have those why do they have that there's customer demand for pringles yeah apparently okay either that or they think they can pop the lid peel the foil back take a few and then put it back people do that are you kidding me no they absolutely do that geez okay all right so how many people take the robes not many i think we've done a pretty effective job of the little tent cards that say enjoy the robe if you love it and you'd like to take one home stop by the front desk and we'll sell you one or if you like this one we'll be happy to get your bill with people with dollars sometimes people still take the robes and they think they're not going to get billed or not many anymore so let's suppose the rolling stones were going to come to washington dc and they wanted to rent um you know one of your floors in this hotel would you rent the rolling stones because the rock stars are often known for trashing rooms yeah i mean if it's rolling stones we'd have to have a fair number of ada rooms i think that's probably true but um no i listen i think with the breadth of our portfolio we've got lots of celebrities and musicians that have an affinity for our particular brand so um when people check into a hotel what percentage today actually say no i'll carry my bag up even though they can't really carry it easily and what percentage of people say please have somebody carry it for me i don't know the precise percentage but what's so interesting is it really depends on trip purpose so for instance if somebody's on a one night business trip they arrive at 8 pm they're out at 6 00 am they are likely checking in on their phone mobily getting a mobile key taking their own bag straight up to their room checking out in the morning and off they go that same business traveler however if he or she is taking a vacation they may show up with six steamer trunks they may want to talk to the front desk agent identify a local restaurant that's all um locals and not tourists they may want instruction on a jogging route right and so by trip purpose the level of engagement with our staff change so are the people that want their bags carried up to the room what percentage of those leave a tip or give a tip the vast majority although we're in the midst of a pretty big technology transformation and one of the the bits of functionality we're exploring is the ability to tip on the app because so few of us how do you do that you just you would just well we don't have that functionality we don't have it yet but when we do presumably it would just okay a button you could tell and uh what about people who clean the rooms that's the toughest job in the hotel what percentage of people actually leave a tip for the house cleaning people not enough is the short answer our housekeepers are extraordinary they are hard working they're prideful and i would encourage every one of you to tip them when you stay in our hotel so what percentage of people check uh make reservations in advance uh for your system the vast vast majority although i will say what we call the booking window the gap between when you book a reservation and you arrive at the hotel has shrunk meaningfully during the pandemic we're starting to see it expand again but we're not back to where we were in 19. but do people go directly to your service or they go through some third party a travel agent what is it we do everything we can to encourage our guests certainly to encourage our bon voy members to book direct there's a segment of the public that goes through the intermediaries and we have great relationships with the intermediaries they give us access to guests that are perhaps less frequent travelers that have more comfort shopping on their sites but that's a relatively modest person what percentage of people make a reservation don't show up is that a big problem well after we tightened our no-show policies much less than we used to what is that policy uh you've got a window during which you can cancel but once you get within that window you will be charged a no-show and if you show up at the ritz-carlton tonight let's say and say i my plane got cancelled or whatever i need a room um and they the hotel sometimes hotels say they have no rooms is that really true no question really there always there's always one people call me all the time the hotel's sold out can you get me in and the answer is the hotel's sold out i thought they always have a room like if the president united states shows up they always have a room somewhere i've been walked really absolutely what happened you showed up and you couldn't get in and did they know who you were are they still working at the company no of course not no well and i was thrilled right because i'm not going to get that upset i'd rather them send me elsewhere where they send you a hyatt or something or absolutely not i would have broken out in hives so have you ever stayed in your competitors yeah i do from time to time and would you ever give them any tips and what they should do better or you just can't absolutely no all right so when you although i will say you know it's interesting i was in new york two weeks ago for the nyu conference and myself chris from hilton mark from hyatt sebastian from accor and keith from ihg we did a ceo panel and it was moderated by sarah eisen from cnbc and we were backstage and she said this is my favorite panel to moderate you guys actually like each other and you know we're fierce competitors but i will say over the last two years the industry broadly really pulled together in effect to battle a common foe around how we were going to engage with the administration sharing best practices on operating protocols and cleanliness and it's a very um close industry in covet were you running your business from your home or were in the early days yes and now what is your policy people have to be in the office x days a week or how do you we don't have a hard policy as we move into the new building we will entertain hybrid but with a strong encouragement to spend a lot of time in the office and not just when there are scheduled meetings uh we believe strongly in this in the power and the the nature of the company's culture and the way to grow that culture is to get folks in person we have 120 000 employees how many were you at the peak of your before coving uh it was the the hardest part of the pandemic by far some of the really tough decisions we had to make but we reduced our workforce by about 30 percent 30 percent and do you think it's going to go back or it's too early to know i think so i mean we've brought as many folks back as we can now you've made some policy changes in terms of diversity can you describe what you're doing to make your executive suite your board and your employee base more diverse sure so to ground you uh we have nine independent directors on the board seven are diverse uh of my direct reports in the c-suite two-thirds are diverse and then what we refer to as our senior leadership so vp and above roughly top 800 we're about 45 46 percent female about 21 people of color and as great as those statistics are across american business none of those are satisfactory and my view is it requires consistent and deliberate focus to get our workforce to look like the workforce that we want to bring in in the future you're a white male on the board you're a minority now that's right uh what are you doing with howard university so much like you i i was delighted to see the awards you created in arnie's name after his tragic passing we at the company and at the family foundation thought long and hard about how to best honor arnie's memory and his focus on diversity equity and inclusion his focus on youth and his focus on education led us to to create the marriott sorensen uh program at howard university and that's going to train minority uh individuals to be leaders in the hospitality industry we'll train them and and we and it's not exclusive to marriott other lodging companies as well we'll create internship opportunities create opportunities for full-time employment upon graduation okay so back to the ritz carlton i check in let's say i need a room tonight and they say oh we have a room but the price is 500 a night i say i only allocated 400 a night can you negotiate you can try but does it ever work or sometimes sometimes sometimes i mean remember our inventory is perishable if you walk from the lobby at that point that room sits empty right i can't sell thursday night's room again tomorrow so therefore how much flexibility is that well person have it is really easy to raise prices once you lower prices it's a lot harder so we've got to keep pricing continuity because i also worry that you're going to go to breakfast tomorrow morning and you're a chatty guy you'll talk to your your seat mate and say what did you pay last night really i only paid 200 that will do that absolutely they do okay so uh let's talk about the future of the industry what are the two or three changes you would see because of technology industry is going to have in the future i i think a lot of the technology existed i think our expectation is we'll see increases in adoption i think about my parents i'm not sure pre pandemic they had ever ordered on amazon now i'm not sure i'll ever get them out of the house because by necessity they learned how intuitive and convenient it was similarly we had mobile check-in mobile key chat functionality with the hotel staff but again by necessity or because of discomfort about the early days of covid more and more of our guests are adopting the use of that technology and for certain trip types i think that will endure well beyond the end of the pandemic so uh what percentage of people actually check out of a hotel when they go to the the desk and say i want the bill i want to see it i want to review the bill do people do that well again the functionality we've given them now they can review their their bill on the app often in many of our hotels they can review it on the television but the number of folks that actually want to go to the front desk wait a minute or two and then review it in detail in front of the agent is uh decreasing by the day yeah okay so uh why is it that marriott became the biggest hotel company in the world what did it do that nobody else managed to do around the world well we did a fair amount of m a the starwood deal was the biggest and the most transformative and tends to dominate the headlines but if you look at the four or five years prior to the consummation of that deal we were on a pretty good run of doing one or two what we internally called bolt-on deals and those bolt-on deals had a few common characteristics often they were in geographies where we had struggled mightily to grow organically and they tended to be brands that we thought had regional or even global growth implications so the best example of that we bought protea hotels in africa before that acquisition we didn't have a single operating hotel in sub-saharan africa with the stroke of a check we became the biggest hotel company on the continent what do you have in russia well so what did you have in russia we had 29 hotels roughly half managed half franchise we are suspending operations in russia so after roughly july 1st we won't be in business in russia what about ukraine what do you have there we had i assume attendance is down this was was one of the more impactful stories that's come out of this for me we had two hotels in ukraine both part of design hotels which is a very eclectic collection of hotels it was a portfolio we inherited in the starwood acquisition and the owners of those two hotels called us it's the klitschko brothers one of whom is the mayor of kiev one of whom was heavyweight champion of the world and said we are going to temporarily close the hotels because we're taking up arms to defend our country wow yeah so those hotels are closed closed okay so um today when somebody checks in your hotel typically do they ever dispute things like uh the the the room charge was supposed to be less or what is the biggest complaint you get from people when they're checking in or when they're leaving there are certain things folks absolutely should expect from us they should expect expect warm genuine service they should expect impeccably cleaned hotels and so those are probably the two areas if we fall short in either of those areas we hear about it and we should okay well i i spend a lot of night in hotels and let me tell you my three biggest please please the thing i only care about three things okay number one is quiet but i don't want the you know the rolling stones next door right um and sometimes you hear people playing boom boxes next door but so that's number one okay so number two is a mattress that doesn't sink that's gonna firm so my back won't go out and does anybody else complain about mattresses other than me the camera mattresses are okay occasionally all right and the third thing is being able to turn the television on without having a computer degree because i know sometimes it's just so hard i wind up i'm getting paid for tv things i don't really want that i just want the news and it's hard do you ever have that problem i i don't okay um i'd be happy to send you something okay it's not that easy to turn these things on okay what i will say though interestingly you have so many players in the lodging industry testing new technologies every day which i think is great i couldn't have one uniform one but sometimes we get over our skis a little bit okay i mean i have checked into non-marriott hotels and there's an ipad or there's some device that is a bit you ever been a hotel where you couldn't figure out how to turn the lights off yeah a few because i i sometimes i just finally i just call the bell called downstairs and say send somebody up i can't figure this out it's one of the reasons in the new headquarters and the new headquarters hotel we'll have working mock-up rooms so we can bring guests in and say try our new residence inn prototype and have them say i couldn't figure out the tv i couldn't figure out the light switches suppose somebody says i just want to rent the hotel room for an hour or two did you have a lot of those [Applause] there's a discount i sure hope not no okay but what i will say we did launch a program during the pandemic you know many in this room i'm sure were fortunate enough if they were working from home they had a home office with good wi-fi nice computer system ability to close the door some younger employees didn't have that and they were sitting at their kitchen counter or they and their spouse were trying to to take turns with calls so we did offer some limited opportunities effectively a day pass to come work in a guest room right so a young person let's say is graduating from college he or she why should they want to work in the hospitality industry what's the pleasure of being in your business well i should have brought my daughter who's at the hotel school at cornell rising senior um but i i wouldn't work for hilton or no i sure hope not although chris nasetta offered a hosta hostage exchange okay he said he has a daughter that wants to work in hockey well maybe you should do that okay i don't think so why it's about this um no i you know i i think bill merritt said it best he and i did a session for our senior leadership meeting and uh it was he and i sitting in his kitchen and at the tail end of the session i said we've got hundreds of thousands of associates all around the world that'll watch this what council would you offer them and he said i would remind them that this is a fun business and in in his normal witty way said you meant imagine spending your whole life working for a box company he said this is a fun business you get to see the world you get to meet all these interesting people many times people are registering significant events in their lives in our hotels you have the opportunity to form personal relationships with your co-workers and your guests it's a fun business to work in um i told you what my concerns are but what is the biggest single complaint that people actually make in a hotel is it the price or is it the service or what no i well it's been interesting if you look at the last two big shocks to the travel and tourism industry post 911 and the great recession it took our industry nearly five years to get pricing power back here after the pandemic within two years we're at record pricing that's good and bad you're talking to analysts that's good but we were talking about well but this is my point i i think folks understand they may nobody likes paying a high rate they understand but if they're going to pay a premium rate with that comes an expectation that the hotel's been well maintained and renovated that it's fully staffed and the services and amenities that they expect are available and that you've got a well-trained staff and one of the challenges depending on whose numbers you believe something on the order of one in five jobs lost during the pandemic or from the travel and tourism sector so as we look to fill those jobs we're getting a lot of terrific folks who may not have experience so the learning curve is steep now some of your hotels are open but all the floors may not be open because i'm told that you don't get enough staff people now it's hard to get staff people so is it hard to hire people and are you hiring people at minimum wages or above minimum wage now meaningfully above minimum wage but i think it's challenging for a few reasons again you have some permanent job loss from the sector and i think the workforce pre-pandemic looked at travel and tourism and said this is a safe harbor set of businesses people are always going to travel they're always going to be plentiful jobs that confidence has been shaken by the last two and a half years we've got to do a better job as a company and an industry reminding folks of the opportunities that exist so what is the biggest hotel you have the most rooms of any of your hotels gosh i used to know this it's probably one of our holy city hotels in mecca or medina in the capitol we have uh big multiple thousand room hotels although i say that and i see craig glaring at me it's probably the sheraton in macau which i think is about four thousand rooms four thousand rooms wow okay and uh if i want to come in and say money is no object i want the presidential suite or they call them another place of the world royal suite what's like the most i can pay in one of your suites uh i'm not sure there is a most most okay um i i mean i have seen suites get uh a guest paying full rack at 50 000 plus dollars a night wow not this guest but some guests so when you go to a marriott hotel every you stay there they know an advance you're coming right but you never want to surprise them i don't it's such a privilege for me when i go to our hotels to spend a lot of time walking through the back of house going to the housekeeping lineup talking to our teams in the kitchen and i i want to be as as i want to avoid disruption as much as possible and so giving them some advance notice allows me to do that but how do you know they're not just making things much better than they normally would bill marat used to tell a story about how many suits he had to throw away because after a hotel tour there were fresh paint stains all over them because they were painting as he was pulling into the driveway you know listen we have lots of metrics that allow us we've restarted a bunch of our accountability metrics so guest satisfaction scores brand standard audits data that helps us know when hotels are falling short so when i think it was baron hilton was once on the johnny carson show and johnny carson said to him what's the most important thing you want people to know he said make sure the shower curtain is inside the tub is that a big problem whether the shower curtain doesn't have any shower left anymore more and more of our guests again driving our design decisions we're going to much higher percentages of shower only and trying to provide a shower experience not dissimilar to what you have at home with glass enclosures so i notice if you go to let's say you're um jw marriott downtown if you want to park there it's like 75 or 80 dollars is that on youtube our general manager is sitting right over there i should ask him i don't know it seemed like it was pretty expensive i'm not that's wrong maybe it's the i charge me 75 but uh but parking is pretty expensive so that's not well particularly in urban cores where square footage is at such a premium okay so if you were going to reinvent the entire hospitality hotel industry what would change would you make that would make it better for either people to stay there or better for owners i think we're doing it right now i talked for a minute about this technology transformation we're going through and when i talk about that in certain forums people say that's fantastic your margins are going to go way up you're going to be able to eliminate all these jobs and certainly we will identify some efficiencies but for me technology is an enabler if we execute correctly to free up capacity for our associates to engage with our guests i think there was a snl skit where somebody went to an airline counter said i i'm on the 4pm and then for 10 minutes they're staring at the top of the head while the agent is typing i don't want that i want our associates to be able to engage with our guests and i think technology will allow us to do that now why do you call them associates not employees we have for 95 years so they are we are a family business they are part of our family it's a company that was built on this idea of putting our associates first and i think it's an integral part of the company's culture okay and so today what do you do for relaxation yourself i mean you are you uh uh exerciser what do you do yeah you're looking at it um no i i mean i um i do the elliptical every day because my knees are bad so i stopped running um i'm a horrible golfer but i love it um and we have a little farm in italy and so i try to get there as much as i can farm okay and you speak italian not enough i'm learning okay so today um if somebody wants to invest in the hotel hospitality business is it a good area to invest in or is it now not the right time because it's it's not expensive compared to where it was a year ago your stock went um as low as what uh 40s 40s now and went as high as 190 or 195 and now it's about one i haven't looked today but uh i want to coordinate a falling knife but 130s okay so uh okay so that's but i think it's a great time to invest now in in full disclosure i ran global development for almost 15 years but um i'll give you a statistic that i think is pretty remarkable our pipeline of future hotels has about 500 000 rooms in it even over the last couple years we've seen a historically low level of fallout from that pipeline and what that suggests is our owners and franchisees believe in the resilience of travel they believe it's a good long-term investment and because so many of them are long-term holders they're not trying to time the cycle by a quarter or two they may own these assets for decades so if i wanted to invest in the industry would i be better to invest in a franchise operation or better invest in uh when you're managing yeah it would depend i mean when i talk with our owners i think our managed business has done a terrific job of making themselves a really compelling and competitive offer oftentimes though our franchise partners that's part of their core business they are themselves operators what is the most profitable hotel you have for us or for the owner well well for both i mean well but remember so a significant portion of our revenue comes off the top line okay and then in a managed hotel we're also participating in the profits i would if i had to guess it would be a residence inn somewhere that is an extraordinarily compelling economic model if you can find a market that has a high percentage of extended stay so there used to be a hotel i think in frankfurt i think it wasn't a marriott that used to be the most profitable or had the highest margins because they were they could check people in two and three times a day because people are staying there they're changing after frankfurt they change their clothes and then you rebook the room again and maybe two or three times a day you can use the same room do you have that kind of uh high profit margin i hope not no you don't have that i you know there may be a bit of that at some airport locations but it would be the exception okay and so what is your favorite hotel in the world that's hard i um maybe i'll give you two one in our system and one outside our system i would say in our system probably the ritz carlton in kyoto kyoto is an extraordinary city and this hotel is perfectly blends with the fabric of that city since we have the colombian ambassador i promise i'm not pandering but there is a tiny hotel in the walled city in cartagena called the character which is one of my favorite hotels in the world how many people really care about their bon voy points is that a big obsession for almost everyone i am it is interesting i have the the privilege to go to many events with our customers and it almost took me off guard in the early days of my time in this role the number of customers that come running up with their phone look how many days i've stayed this year look how many points i have i mean it's it's a matter of pride and if you go to some of the the big consulting firms the mckinseys and the bcgs especially their young consultants have built these extraordinary algorithms to try to maximize but is bon voy a profit center or a law center uh if it operates the way it should it is essentially neutral the amount of revenue coming in should pay for the program okay and why is your point system better than simon minnie at hilton's is it the same thing basically yeah i mean i and some of this i think chris would say the same where i think we would be similar is we both believe we offer the best quality of service the most engaged employees where i think we distinguish ourselves we want and i think most of our guests want to stay within a single ecosystem to maximize their their loyalty the the scale of our footprint compared to anybody else i think gives them the best opportunity to do what percentage of people come to your hotel and they don't like the room they say they want to change a different room a lot of people very small very small although again one of the features that we expect to roll out with our new um technology platforms all of us have become accustomed if you're flying you go on the the little diagram and you choose your seat right we'll have that same sort of functionality it used to be if you went to hotel you had to pay extra for internet service you've gotten rid of that now it's for the most for our members yes but for your members oh so if you're not a member you got to pay internet depending on brand why don't you just put it into the basic fee no well we want to drive membership we want to drive direct bookings okay and today uh would you say that uh if somebody wants to be a good customer they want to be an informed customer what should they do that they're not doing there was somebody here saying i want to be a good customer i want to get the most out of what i can get from you for the least amount of money what should they do that they're not doing now they should talk to our associates on property we're all busy we all have our our faces buried in our phone spend five minutes talking to the team at the property you'll learn a great deal about the city you're in you'll learn features of the hotel um and you'll meet some pretty extraordinary people so do your parents ever go to married hotels and ask you why it's expensive or do they get special benefits or they give you any complaints well we have a friends and family rate which they take full advantage of how do you get into that well either i can adopt you or you know i can call you my friend okay all right well i'll take a look at that good um so um so do you love the job you have i love it it is a it's an extraordinary honor it's an amazing company um as you mentioned we're celebrating our 95th year i'm the fourth ceo in 95 years i've had the privilege of working with two generational leaders in bill marriott and arne and and our people are remarkable so one final question please just give us one interaction you might have had with arnie one of your interactions with him when you were working for him something that showed he was very you know a terrific ceo and what memory do you have oh gosh i i could do a few maybe i'll give you a serious one and a funny one okay um the funny one uh you may recall we launched the edition brand which was a collaboration with ian schrager and our timing couldn't have been worse i think we launched and about an hour later the great financial crisis started and so when when the crisis was over we as a company believe we needed to relaunch we believe deeply in the brand and we thought to do it right we needed to pick at least three global gateway cities and develop these hotels on balance sheet to get them perfect with an eye towards eventually selling them and so we did the miami beach edition we did the clock tower on madison square park in new york and we converted the old burners hotel in fitzrovia in london and i think london and miami were under construction we had a go hard date with the deposit on clock tower in new york was due on friday at 5 p.m and i went to see arnie in my old role about noon on friday and i said okay arnie are we in or out right i've got to send whatever it was 50 million dollars and he said make your pitch one more time so i made my whole pitch about why we should do it and he said all right on one condition i thought oh gosh he's going to retrade the deal so i get my pen and my paper back i assume i can use candid language here he said when we get fired you have to help me carry all my out to the car and but you know he he had the courage to go forward it ended up being a great execution uh we ended up selling the three hotels to one of our to a sovereign fund and it's been a great is that the serious or funny one that was the funny one okay although i think he was serious um he uh um many of us were so close to him and and after his passing you read all these beautiful tributes that had been written about him and the thing that always struck me so few of them talked about business they talked about his humanity and and i've said to anybody that asks he was the the most engaged and effective listener i've ever met in my life and listening is a lost skill um we're all busy we're all thinking about what's next we're all looking at our phone and you you meet folks in our hotels who met him for five minutes in the port cashier but he was their friend because for that five minutes he was a hundred percent engaged with them and it was remarkable thank you very much

Channel: The Economic Club of Washington, D.C.

Views: 15,298

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Id: JtEi4u1G-Xc

Length: 43min 2sec (2582 seconds)

Published: Thu Jun 23 2022