Consumer Confidence Is Down. Marriott’s CEO Explains Why the Appetite for Travel Won’t Waver.

As an Italian-American, Anthony Capuano spent lots of time in Italy growing up. That is where the Marriott International president and CEO first picked up on the importance of service and hospitality, he told Barron’s editor at large Andy Serwer in an interview for the At Barron’s video series.

“If you have the good fortune to go to places like Italy, you go to a restaurant and the waiter has been there for 40 years,” Capuano said. “There is tremendous dignity and nobility in those sorts of careers.”

Capuano said he gravitated toward the service industry back in the U.S. He studied hotel management at Cornell University, before joining Marriott in 1995, where he eventually led the company’s global development team.

In 2021, his “dear friend,” Marriott’s then-CEO Arne Sorenson, passed away. Capuano was appointed CEO.

“On a personal level, it was extraordinarily emotional,” he said.

It was also the middle of the Covid-19 pandemic. Marriott’s share price nose-dived in the early months of the crisis, shedding half its value. Bill Marriott, the company’s chairman, said at the time that it was the most significant challenge the company had faced in its nearly 100-year history, according to Capuano.

“I don’t think there was hyperbole in his comment,” Capuano said.

Marriott’s share price has more than tripled since its pandemic low. The company has expanded its offerings to include the Ritz-Carlton yacht collection and an outdoor collection of cabins. And it has added 500 million people to its loyalty program in the past six years—a 69% increase.

“Our guests like the consistency they find in our portfolio. They like the service that is offered within our portfolio. They love the loyalty platform,” Capuano said. “Those are the attributes of a stay with Marriott that give us an advantage.”

In conversation with Serwer, Capuano discussed Marriott’s expansion in China and the new headwinds facing the company: tariffs and plummeting U.S. consumer confidence. Below are some highlights from their interview, which have been edited and condensed for clarity.

Barron’s: Are you seeing any changes in travel trends, given what is going on in the economy?

Anthony Capuano: It is interesting. On a global basis, revenue per available room—which is the most important metric for our industry—was up about 6% internationally in the first quarter of the year. But it was barely up 3% in the U.S. So we are seeing relatively more modest demand growth in the U.S.

I think you saw U.S. consumers pull back a little bit because of uncertainty around tariffs and international relations. But April actually showed some encouraging signs. There seems to be a view from the consumer that maybe we are in for a little more volatility, but that doesn’t fundamentally change our appetite for travel.

What is the breakdown between domestic travelers and international travelers coming into the U. S.?

More than 90% of our demand in the U.S. is domestic. As you might expect, in the first quarter, we saw Canadian inbound drop about 5% because of some of the complexities in the U.S.-Canada relations.

What about Americans going overseas in 2025?

When you talk to our customers and when you look at our booking patterns, destinations in western and southern Europe—think Barcelona, London, Rome, Paris, Amsterdam—are top of mind.

And that seems to be holding up?

So far, yes.

What about tariffs, do they impact your company?

From a micro perspective, to the extent tariffs impact construction materials and the furniture, fixtures, and equipment that we use to either build or renovate hotels, tariffs could create additional pressure on the economic equation for our owners and franchisees.

From a macro perspective, I worry about consumer confidence. The U.S. is hitting lows in terms of consumer confidence. Generally, industries like travel and tourism thrive in times of stability and high consumer confidence. But this fundamental shift we have seen in consumer discretionary spending moving away from hard goods toward travel and experiences so far seems to have offset any dilution of demand from weakening consumer confidence.

What about China? What is going on with your business there?

Last year and the first quarter of 2025 set deal volume records for our greater China business.

We have about 600 hotels in China and 400 more in the pipeline. Those hotels tend to be owned by domestic owners, staffed by domestic associates. Inbound international travel into mainland China hasn’t recovered prepandemic levels—that obviously represents upside in the future for the performance of our business.

What you are describing in China speaks to your greater business model. Could you explain that?

We are an asset-light model. We have approximately 9,600 hotels around the world. We only own 20 of those.

The others are a mixture of managed and franchised hotels. Managed meaning it is owned by a third party, but Marriott International is the operator of that hotel. The alternative is a franchise model, where the hotel is independently owned. And it is either run by an owner-operator, or the owner engages a third-party management company to run it. In either of those circumstances, they are operating under a long-term license agreement with us.

And how do you determine between the latter two models?

It is determined by the owner. We have got a terrific group of owner-operator franchisees, whose core business is the development and operation of their own assets. Then there are more institutional investors, who want to own the asset but want flexibility because their investment horizon is relatively shorter. So they like to have a third-party operator that will consider a shorter-term management agreement.

Marriott operates many brands. On the high end alone, you have Ritz Carlton, Bulgari, St. Regis, and Le Meridien. Is that too many?

You asked that question more politely than some.

I always give the same answer because I really believe this: The breadth of choice that our brand portfolio offers both our guests and our owner community is a powerful advantage. For our guests, our objective is to get as close to 100% of their travel wallet as possible. So how do you achieve that objective? You make sure that we have the right product for every trip purpose, everywhere they want to go.

Similarly, for our development partners, we want to capture as close to 100% of their wallet as possible. Sometimes they come to us and say, “I have an amazing site and I really want to build a Marriott.” And we say, “Well, the Marriott brand is already taken in that market, but we could do a Sheraton.” That allows us to keep them in the Marriott ecosystem.

Hilton is outperforming Marriott on the stock market. Can you address that?

Hilton has a higher percentage franchised. We have a much larger managed portfolio. My guess is a high percentage franchise model like Hilton’s is more predictable—and the Street likes predictability of earnings streams.

If you have higher percentage managed, like Marriott, you earn base management fees on gross revenue and incentive management fees on profitability. Incentive management fees are viewed by the investment community as more variable because they are tied to profitability; they are also tremendously lucrative when you are in an up-market.

What is Marriott’s strategy going forward?

We want to make sure we are everywhere that our guests want to travel, and we want to have the strongest and most immersive loyalty platform. Our loyalty platforms were created ostensibly in a very transactional way: You stay with us, you earn points for that stay, and eventually, you redeem those points for a future stay.

Our aspiration is to see the relationship with our nearly quarter of a billion loyalty members go from that functional and transactional relationship to a much stronger, emotional relationship.

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