Arnie Weissmann
In our Dec. 23-30 Preview issue, my interview with Marriott International CEO Anthony Capuano reflected his global economic outlook, region by region, for 2025.
But other parts of our conversation ended up on the cutting room floor, owing to space limitations in our print edition. That was frustrating, as he also had given an in-depth accounting of travel-related trends that Marriott is both tracking and heartened by. A rescue of this upbeat "Tony talk" seems a good way to start the new year.
He said that, thanks to Marriott's branded credit card partnerships with JPMorgan Chase and American Express, the company gets a real-time look at consumer-spending trends. And in analyzing the data, a noticeable bifurcation of the American consumer emerged.
"Even before the pandemic, data suggested that younger consumers were shifting their spending patterns and prioritizing travel and experiences over consumption of hard goods," Capuano said. "When we look at that data today, it appears that not only does that trend have real legs -- perhaps even permanent legs -- but it's also been accelerated across income strata."
If the trend straddles income strata, where does the bifurcation occur? Within the income strata, it turns out. Consequently, Capuano see double the opportunities: ones designed for luxury travelers in parallel to those for "more modest income households."
Luxury brands have already been buoyed by the anticipated $80 trillion in wealth transfer from baby boomers over the next two decades. That, combined with the strengthening preference for experience over things gives travel an enormous advantage over physical luxury purchases.
And Marriott has the largest luxury hotel pipeline feeding into the largest luxury hotel portfolio. If all goes as Capuano expects, he need not worry about excess capacity in Marriott luxury properties.
Nor, for that matter, in their luxury investment on the seas. The Ritz-Carlton Yacht Collection is a participant in his expansion plans (a third ship will launch in the fall).
Capuano said he believes Marriott's push last year into the midscale sector with new brands and acquisitions that can be scaled across borders and even regions will serve the "value" side of the bifurcation well.
And responding to "something we heard loud and clear" from Bonvoy members, Capuano said the company's acquisition of Postcard Cabins will cater to those who prefer their experiences to be in the great outdoors. That segment will be further served by adding Trailborn's portfolio to Marriott's reservation system.
He said he expects partnerships that were inked, and then linked to Bonvoy, in 2024 will begin to pay dividends in 2025. The Taylor Swift Eras Tour partnership may have run its course, but he has high hopes for ones that continue with Starbucks, Uber, the NFL and the Mercedes Formula One racing team.
In addition to deals connected to Bonvoy, individual brands -- and even properties -- have engaged in targeted collaborations. St. Regis has arranged with the Italian porcelain manufacturer Ginori to create Ginori Cafes in its Florence and Venice properties, and with Missoni to create a branded beach club in Bali.
Two other trends Capuano has his eye on: the rise of multigen trips to bucket list destinations and sports travel. "We've seen statistics that would suggest there was over $50 billion of direct spending by sports travelers in the U.S.," he said. "And you think about the next decade, whether it's the Summer and Winter Olympics or the World Cup, the next decade will be the U.S. decade of sports."
You may by this point have spotted another trend: The ever-increasing importance of data to guide growth. The decadeslong Marriott buying spree that resulted in 35 brands and the creation of one loyalty program, Bonvoy, for all of them is probably viewed by most Bonvoy members as a way to make sure that, regardless of their economic demographic or hotel style preference, they can find a Marriott brand in their destination that will enable them to build up their points.
But for Marriott itself, there was substantial additional benefit. Every Bonvoy-linked hotel stay produces data about the member. And members contribute additional information if they participate in partnership activations or respond to post-stay surveys. The size and diversity of data points gives the company insights that reveal actionable consumer behavioral trends.
I've always thought it makes sense for small enterprises to take advantage of the resources, time, effort and talent that large-scale companies exploit to continue growing. For example, a consumer goods retailer designing its website could do worse than study how Amazon moves Prime members through its site toward the "buy now" moment.
In travel, Marriott has gone to a lot of trouble and expense to identify trends: It forms strategic partnerships, tracks how new acquisitions perform, studies the results of every new initiative and listens to millions of customers.
And the travel trends it unearths can just as effectively be utilized by a home-based travel advisor.