In a video interview, Marriott’s Anthony Capuano shares insights on how the company is shaping the future of its brands around the world.
NEW YORK CITY—Marriott International’s EVP and Global Chief Development Officer Anthony Capuano said the hotel industry can expect to see “business as usual” for Marriott’s global development plans as it works to complete the acquisition of Starwood Hotels & Resorts Worldwide. Then, the work will begin to integrate brands, real estate and distribution around the world.
In a video interview conducted during the NYU International Hospitality Industry Investment Conference earlier this month, Capuano said the planned deal will result in many opportunities for Marriott around the world, and this growth through acquisition will complement the company’s recent push to grow bolt-on brands around the world.
Some highlights from the full conversation include:
- On how the pending deal has affected deal volume: “We continue to have a strong volume of deals here and around the world, and Starwood is having record volumes of deal intake,” Capuano said. “It’s reflective of the investment community’s appetite and enthusiasm for what the power of the combined companies will be.”
- On the combined company’s growth philosophy: “Marriott’s business model of not going after long-term real estate ownership will stay in place,” he said. “We will inherit a fair amount of owned real estate, and I think we’ll work through an orderly disposition of that real estate.”
- How the company views its expansion of the Canadian Delta Hotels and Resorts brand: “It gave us a platform for growth on a global basis,” he said. “It’s a brand we’ve termed a flexible full-service conversion platform. It gives us the ability to look at other branded hotels and bring them in. It also serves as a platform if there are other Marriott full-service hotels—core Marriotts, Renaissances—that are in (revenue per available room)-challenged markets. … It gives us a platform for loyal owners and franchisees where they can stay in the Marriott Rewards system … but have some renovation requirements that are more commensurate with the RevPAR potential of that market.”
- On Africa’s importance to Marriott’s global expansion: “Africa is really gratifying for us. It was a tough market for us,” he said. “At the time of the Protea (Hotel Group) acquisition, we had no single operating hotel in Sub-Saharan Africa. … Not only did it give us instant distribution, we inherited several hundred associates who had been working and developing hotels in Africa for 30 years. Just this year, we signed the first core Marriott hotel in South Africa, and we have a pipeline of probably a dozen and a half hotels behind that.”
- On the bid-ask gap: “There is a bit of a disconnect between the perspective of buyers and sellers,” he said. “We had an epic strong market for a number of years and you have some sellers clinging to the notion that we’re still in the fourth inning of this cycle. You have buyers who want to be at the leading edge, and they’re saying we’re at the end of the cycle and there should be opportunities for deeply discounted asset acquisitions. So, you might see a lull in transaction volume until those perspectives reconcile a little better.”
- On where he would like to see Marriott hotels: “The Maldives is a luxury market that has weathered economic cycles as well as any market in the world,” he said. “We will inherit some distribution in the Starwood acquisition, but no legacy Marriott brands are in the Maldives. … Here at home we would love to have a Ritz-Carlton in Beverly Hills. … I think the third is the Edition brand. … There are some gateway cities we are pursuing heavily, markets like Paris and Moscow.”
Watch the full video interview for more details from Capuano on Marriott’s outlook for its AC Hotels by Marriott and Moxy Hotels brands, his outlook on development financing, and more.