Marriott International CEO Tony Capuano told CNBC on Monday the distinction between business and leisure travel is fading, a welcome development for the hotel operator as it recovers from the coronavirus pandemic.
People going on vacations and other personal trips has led the hospitality industry’s rebound from the Covid-induced damage that hit more than a year ago. The return of trips for corporate purposes is crucial for a complete comeback, though, and there have been questions about how long it will take for that to return to pre-pandemic levels — if ever.
“We do think you’ll see a steady return of business,” Capuano said in an interview on “Squawk on the Street,” noting that, in mainland China, business-travel demand in March was 5% above where it was in March 2019. China’s economic recovery timeline is generally thought to be several months ahead of the U.S.
However, Capuano said Marriott could benefit from a broader shift in the way corporate travel is viewed after the pandemic, when many white-collar employees are expected to have greater flexibility around going into the office following the necessary embrace of remote work due to Covid.
As more people return to the office, business travel will pick up, Capuano said. “The thing that will be interesting to watch, I think it’s going to be less clear what the trip purpose is,” he said.
“Increasingly we’re seeing folks that say, ‘I can blend trip purposes. I can combine leisure with business travel.’ And we think that’s really good news for our hotels across the country,” said Capuano, who has led Marriott since February. He took over for the late Arne Sorenson.
Capuano’s comments Monday came shortly after the Maryland-based company reported first-quarter financial results. Marriott’s adjusted earnings per share of 10 cents topped consensus estimates of 4 cents, according to FactSet, while quarterly revenue of $2.32 billion was below projections of $2.38 billion.
Marriott shares fell by more than 3% Monday to trade around $142 apiece. The stock is up about 7% year to date.