In the travel industry, some brands work very-very hard to limit the amount of time when CEO’s are available to the press. Despite being the highest paid person on the team, they have a tendency to speak inside baseball, or often to sincerely piss off their key customers.
British Airways did this for a while with former CEO Alex Cruz, which I considered to be a mistake. The leader was charismatic and would respond with facts and figures when challenged, to show customers where his thinking was.
With Marriott Hotels new CEO, Tony Capuano, I now totally understand why press teams hold CEO media availability back. Just about everything the incoming leader recently expressed makes me want to run from Marriott like a sinking ship, despite enduring affection for the brand.
For a start, he thinks customers have short memory, thinks it’s great that Starwood was a better program than the program he now de-facto leads, and doesn’t like how much hotel employees are paid. Talk about a week of soundbites.
Marriott CEO Prioritizes Hotel Owners Over Guests?
Tony Capuano, the new Marriott CEO sat down with long term travel industry veteran, Scott Mayerowitz of The Points Guy (TPG), to discuss just about everything going on with Marriott these days.
The idea was to touch on how his time at the helm will build on what his predecessor, the much loved Arne M. Sorenson, created.
Sadly for Marriott, the conversation didn’t go well. Well, maybe it did for shareholders and hotel owners, who together seem to represent the only people incoming CEO’s are concerned about these days, but not so much for guests.
You know, the people who actually pay hotel bills, devote loyalty, get credit cards, create revenue – and all that jazz.
And that’s a great reminder to most hotel guests: hotel chain CEO’s are appointed to drive share price up and keep franchisees of Marriott properties happy. Marriott rarely owns the Marriott branded hotel you’re staying at – they just provide a marketing and sales platform for owners to plug and play. Keeping owners happy is priority over guests.
Starwood Preferred Guest Was More Generous Than Marriott Bonvoy
Capuano openly admits that Starwood Preferred Guest, one of the better hotel loyalty program in modern history, which Marriott purchased, was much more generous than his Marriott Bonvoy program. He has no intention of changing that.
Speaking to Mayerowitz, Capuano offered a striking rendition along the lines of we have more hotels, so that makes up for the fact that we’re not as loved and don’t ever plan to be that generous again. Perhaps that’s why Marriott all but closed down the Ambassador program earlier this year?
“The integration of Marriott Rewards and SPG was a monumental task. And it’s quite interesting. You hear SPG loyalists say, ‘My goodness, what have you done to our program?’ The program was very guest-friendly. It was less owner-friendly.”
“What some of those SPG loyalists may have lost, a bit, in terms of the richness of the program, we hope that breadth of choice, whether it be brands or geography, is a bit of a mitigating factor,”Marriott CEO, Tony Capuano
So basically, if I understand correctly, the statement expresses something along the lines of “we have more hotels, so hopefully that makes up for them being less friendly to our most frequent guests.”
Just last week, Capuano blamed a labor shortage at Marriott Hotels on the notion that Amazon pays people too well. The CEO received $9 million in salary during the covid-19 pandemic, with inevitable stock grants and options on top.
He’s hoping to reduce Marriott’s hotel operating costs with cheaper labor, and his comments appear to suggest that he doesn’t like that businesses are paying people living wages for entry level jobs, because it’s making it harder for him to produce cost savings to justify his $9m salary.
Don’t Worry, There’s More
If the comments are rubbing you the wrong way, just wait, there’s more. Capuano, as flagged by View From The Wing offered a lovely requiem of Marriott Customers, who are apparently best described as having “short memory”.
“I just spent two days with my leadership team talking through a bunch of these issues. I’ve described this phenomenon as the friction that exists between the short memory of our guests and the long memory of our owners.”
…“And because of our short memories, you want everything to be the way it was. You want the restaurant open the hours that it was open before. You want the spa open with all the treatment rooms and all the technicians available. You want full service at the pool. You want daily housekeeping. You want all those things. And, in a way, that’s good because it means our consumers are anxious to get back.”
“At the other end of the spectrum, our owners and franchisees have borne a disproportionate weight, from the impact of the pandemic,”
“They’ve lost billions of dollars of revenue. Suggestions about getting back to ‘normal,’ they look at you like you have three heads and they say, ‘You’ve got to be more sensitive to the steep climb we have in front of us.’”Tony Capuano, CEO of Marriott Hotels
It’s not wrong to feel for the franchise owners of Marriott Hotels, but the cart before the horse question comes to mind. What comes first, a recovery, or a hotel experience worth enjoying? For discretionary travelers, there’s no point in taking a trip when the pool is closed, dining is a limited experience and other things are too.
To that score, Marriott and many of its franchisees were among hotel groups which received billions in payroll aide and other financial benefits from the United States Government.
Maybe I’ll Buy Marriott Stock?
As a hotel customer, and typically someone who stays more than 100 nights away from home in a given year, I’m having a very hard time swallowing these words and directional visions. The avid capitalist in me loves them though.
Anyone who willingly displays such disregard for customer friendly policies while championing cost cutting and the prioritizing of owner costs and share price over any resemblance of guest satisfaction (during an interview with a customer centric website) is bound to drive a stock up.
Unless, of course, all the guests stop staying in Marriott hotels, and Airbnb gains a greater market share. Then, Marriott, shareholders, and franchisees would have a very large problem. It’s funny how that balance can work.