David (2:43)

Is that right?

Tony Capuano (2:45)

Yeah. He loves the hotel. He loves the destination. We toured the hotel, and in his normal way, he was talking to the general manager, and he knew the P and L better than the GM did. And at the same time, around every corner, he had housekeepers hugging him, thanking him for the opportunities he had created. But we were waiting to go into lunch, and he grabbed me by the arm and he said, come on, let's go in the kitchen. And so we walked down the line. We were shaking hands with all the chefs, and eventually we made our way to the dish area, the dishwashing area. And there was a young man back there working hard. Mr. Marriott walked right up, extended his hand to say hello, and I could tell this young man was a little uncomfortable. And in his amazing way, Mr. Marriott put him right at ease. He said, I've washed more dishes than you'll ever wash. And we all shook hands, we chatted for a little bit, and then the team called us to go to lunch. And Mr. Marriott looked at this young man and said, is there anything you need to do your job? And if you've ever worked in a commercial kitchen, you know, at the dish station, there's this big high power sprayer that you use to clean the dishes before you run them through the dishwasher. And this guy reached up and he squeezed the handle and the water kind of dribbled out. And Mr. Marriott said, well, you can't do your job that way. And he said, it's okay. The engineers are busy. They're aware of it. Mr. Marriott patted him on the back and said, don't worry, I'll take care of it. And off we went to lunch. I didn't look back, but this kid probably rolled his eyes a little bit and said, sure you will. So then we had lunch, we did a bunch of additional hotel tours. We overnighted there at that hotel, and the next day we were flying to Oahu. So we drove from Kaanapali 45 minutes to Kahului Airport. About 20 of us on the bus and. And as we're pulling onto the tarmac, Mr. Marriott says, we need to go back to the Maui Marriott. So everybody says, oh, if you forgot something, we'll stay behind. And he kind of smiled. He said, I'm not asking. So sure enough, we turn around the bus, we drive 40 minutes back, we pull into the port cachere, and everybody starts to get up. And he says, no, everybody Wait here. And I'll never know why, but he said, tony, come with me. So the two of us got off the bus, we walked through the lobby, and you can guess the end of this story. We walked into the kitchen, straight to the dish station, same young man's there working. Bill Marriott walked right back there, grabbed the sprayer, squeezed it full power, and he patted him on the back, said, had a great day, and off we went. And it was such a. I mean, it's a great story, but it is such an illustration of the humility and the sincerity that Bill Marriott has always had as a leader. He's right. He started washing dishes and he knows that's important. And he made a commitment to this young man, and he wouldn't have felt right not following through on that commitment.

David (5:39)

Yeah, that's a classic walk the talk story. You know, people often judge themselves by their intentions and, you know, but people judge you by your actions. And he took actions there, which. Great. I gotta ask you, Tony, how many Marriotts do you stay in in the year?

Tony Capuano (5:55)

Yeah, well, I probably. I've been in the job. Next month will be 5 years as CEO, 31 years with the company. And I think for these last five years, I've spent 200 to 220 nights a year on the road. So a few hundred and.

David (6:15)

So what's your favorite mattress? And why?

Tony Capuano (6:17)

Oh, gosh, whichever one is waiting for me at the end of a long night, I think is the right answer. I. I started with the company in 1995, and I'd only been here about a month when a legendary leader of the development discipline, a guy named Jim Sullivan, asked me to help him because he thought we had an opportunity to acquire Ritz Carlton. And so I might say Ritz Carlton, but, you know, I'm. I'm not objective. I think I have a special place in my heart for that brand because. Because I had the privilege to be involved in our investment. But they're all great.

David (6:56)

You know, Marriott has been around a long time, about to celebrate its 100th anniversary, and it has a very unique history. Can you just give us a little brief snapshot of how it started?

Tony Capuano (7:08)

Of course. It's an amazing story. So, you know, Bill Marriott, I was just with him and he laughed. He said somebody asked him whether what he was doing when the company was founded, suggesting he was over 100 years old, which he isn't. But it was his parents that founded the company. JW Marriott Senior and his wife Alice. And JW Marriott Senior was a sheep herder. In Utah. And he kind of saved his money and saved up enough money for he and his, his new bride to get a Model T and drive cross country from Washington or from Utah to Washington D.C. and he had visited Washington, I think it was during the World's Fair and said, boy, this would be a vibrant economy to try to start a business. And so they opened a nine seat root beer stand in 1927 here in Washington. They lived in a little apartment upstairs from the root beer stand and they opened in May. So right into the start of a normal hot, humid summer here in Washington. And the business was booming. And every night Mrs. Marriott would wash all the sticky nickels that were sticky from root beer and then she'd go make the deposit at the bank. And they lived upstairs and the business was doing great until fall came and then the temperatures and the climate started to change. There was less demand and they said we're going to have to expand the offerings here. Now interestingly, in college she had studied and developed a fluency in Spanish and, and so she literally went and knocked on the front door of the Mexican Embassy, convinced the chef to spend a little time with her sharing recipes. And she took those recipes and started making those, the hot chili and hot tamales in the apartment, bringing them down during the day and selling them in the root beer stand. And that root beer stand became the first of a multi unit chain called Hot Shops. And so that was really the start of the company. And as that business started to grow, Mr. Marriott senior noticed more and more customers coming in and ordering food to go. And he started, he was very inquisitive and he started to ask why. And they said, well, we're flying out of what was then national, now Reagan Airport and there's no food on the plane. So he convinced the airport to give him a concession. And in our archives there are these amazing old photos of Mr. Marriott with a cart filled with box lunches standing at the foot of the stairs, going up to an old, probably DC9 selling these lunches for a dime. And that turned into our big inflight catering business. And so it was really those two businesses. For 30 years we weren't in the hotel business. We were a food service company. And then in 1957 we opened the first hotel, the Twin Bridges Marriott here in Washington.

David (10:11)

Very few people really know that story. And here you are, 9,700 properties later. And you know, when you're that big, Tony, it's easy to, to, to have a bureaucracy. How do you keep such a big company small?

Tony Capuano (10:28)

Yeah, a few ways, I think. Number one, the continued involvement in the FA of the family, I think, is a huge secret weapon. Mr. Marriott is still our chairman emeritus, and I pity you if you use the retirement word with him. He is still deeply and actively engaged in the business. Two of his children, Debbie Marriott Harrison and David Marriott, sit on our board of directors. David is our current chairman of the board. There are a number of family members that work in other areas of the business. And I think as I travel around the world, one of the things that's clear is our associates, despite our industry leading scale, they feel like they work for a small family business. And it really is a tremendous advantage, I would say. Secondly, Arne Sorensen, my predecessor, made a brilliant decision to decentralize our business as we got bigger and bigger and we were growing further and further afield and, and so we created these continent structures around the world. And I think the real opportunity is to lean on those amazing leaders, make sure they understand the broad strategy, make sure we've given them the tools to execute that strategy, make sure they know those of us here at center are available to support them, and then really get out of the way and let them run their businesses.

David (11:53)

That's great, you know. And you followed Arnie Sorensen, who is a tremendous person.

Unidentified Male Guest (11:58)

I had the pleasure of meeting him. Just a great person, a great leader.

David (12:03)

And he passed away from cancer. You know, what was it like coming to the helm of a company like.

Unidentified Male Guest (12:09)

That under those kind of circumstances?

Tony Capuano (12:12)

Yeah, it's. I've called it a battlefield promotion, which is really what it was. You had the loss of this beloved leader. And we were still. This was February of 21, so we were still very early in the pandemic, which Bill Marriott has characterized as the most significant challenge this company and this industry ever faced. And so it was, you know, it was an extraordinarily difficult time. It was a very emotional time because we'd all lost our friend and mentor. And again, I'm sure during the course of our conversation, I'll talk about Mr. Marriott a lot. But here's another great leadership lesson from him. He called me that Sunday evening to let me know I'd been appointed by the board as only our fourth CEO in nearly a century. And he said something to me that was invaluable. He said, nobody wishes more than me I could get the world to stop spinning for a few months so that we could properly grieve the loss of our friend. He said, you're going to have to figure out in your own personal way, how to go through your own grieving process, he said. But you're going to have to figure out a way to compartmentalize it a little bit, because whether you like it or not, tomorrow morning, hundreds of thousands of hard working, loyal Marriott associates are going to wake up, they're going to put on their name badge proudly, and they're going to expect you and the rest of the leadership team to lead them out of the most difficult crisis the company's ever faced. And it was such valuable advice for me because it got me focused on the task at hand and really didn't give me time to think about the enormity, the enormity of the challenge that I'd been given.

David (14:01)

Yeah, that's interesting because knowing Arnie, you know, I'm sure that's exactly what he would want you to do too, you know, lead that company and help the team members succeed. And I can't wait to dive more into your journey to becoming CEO of the world's largest hospitality company. But, you know, take, let me take you back a little bit, Tony. You know, what's a story from your childhood that shaped the kind of leader you are today?

Tony Capuano (14:25)

Yeah, that's a good question. I. It's a big year in, in my family. My dad turned 80 last month, I'll turn 60 this month. So there's only a 20 year gap between my father and I. When I was born, he was a student at Johns Hopkins, just up the road here in Baltimore. And of course, I don't remember this, I was a baby, but I heard the stories. He would come home from school, he'd spend a little time with his wife and his newborn son. And then he worked graveyard shifts at UPS, loading trucks. And then when he was finished his graveyard shift, he'd come home, sleep for a couple hours and, and head right back to school. And when I would hear these stories, the, and then get advice from him. Throughout my childhood, as I, as I worked my way through school and college and started my career, this idea that there are many disadvantages that are beyond your control. There's always going to be folks that have a better education or better experience or, you know, more hair or less gray hair or taller or whatever it might be, none of that is within your control. But if somebody outworks you, it's because you let them. And so from the earliest days, this idea of having this extraordinary work ethic really came from my dad.

Unidentified Male Guest (15:50)

Fantastic.

David (15:51)

And what was it early in your life or your career that made you feel like the hospitality Industry was a good place for you to be because you've been at it a long time.

Tony Capuano (16:02)

Yeah, it's sort of a confluence of unrelated events. I was a lacrosse player growing up, and one of my coaches owned a restaurant in my hometown. And so, as you might expect, because he didn't want us getting in trouble, all the lacrosse players worked in the kitchen there. So David Marriott and I always tease each other. David says he started at the bottom as a dishwasher. And I said, no, the bottom was pot washer. I started as a pot washer and had to get promoted to dishwasher. But I, you know, I worked there for a few years and I think started to develop an appreciation for the industry. And at the same time, my father was commuting into D.C. and he carpooled with one of our neighbors who was the then lead lobbyist for the American Hotel and Lodging Association. And he was the one that really recommended that we look at hospitality schools. And so I visited a bunch of them. I went up to Cornell, fell in love with the program, fell in love with the campus. I was there on one of the few sunny, warm days that they have in Ithaca, New York, and that really is what caused me to pursue an education. And I've never looked back. I just fall in love. I fell in love with the industry.

David (17:19)

Now, that's great. And as you mentioned earlier, you joined Marriott back in 95, although, you know.

Tony Capuano (17:24)

It was not my first job.

David (17:26)

Is that right?

Tony Capuano (17:27)

Cornell has an amazing career services division there, and they help the kids immeasurably. And if you apply yourself, you end up with lots of job offers. Hopefully lots of, well, lots of interviews. Hopefully lots of job offers. And when I was a senior in 1987, I was lucky enough to interview with seven companies. Even luckier to get six job offers. But I held onto that one rejection letter for a long time because it was from Marriott.

David (18:01)

How great is that?

Tony Capuano (18:02)

And, you know, but I've reflected on it over the years, and I think it's a funny story to tell given where I ended up. But as I reflect on, I think that recruiter was probably right. One of the things I treasure about our company is its humility. And they probably thought, this is a reasonably smart kid, but he probably needs to go out into the real world and get beat up a little bit, and then we'll take a look. And so I did. I worked for two consulting firms on the real estate side before I joined the company in 95.

David (18:34)

Well, speaking of getting beaten up a little bit, what's a story from those early days, maybe a project that no one else even remembers but you that taught you an important leadership lesson. Yeah.

Tony Capuano (18:47)

So I. Gosh, there's a few. Maybe I'll tell you one. By then I had made my way into development at Marriott. I was working on a project in Atlanta and the owner happened to be a dear, dear friend of Bill Marriott. And I was doing what I had been taught to do, trying to drive a very tough but fair deal for both sides. And the owner called Bill Marriott and said, you got to call off your attack dog. He's pushing too hard. Just tell him to cave on a few of these deal points so we can get it done. And Mr. Marriott called me and he said, ah, you should take it easy on these guys a little bit. And I heard him, but I thought, you know, I'm not being unfair. I'm, I'm sort of following the types of deals that we've done historically. I owe a debt or responsibility to our shareholders to stand firm and fair on a bunch of these deal points. And so I wouldn't say I ignored Mr. Marriott's request, but I continued to push and we got the deal done. And Mr. Marriott sent me a note about a week after we signed the deal. And he is, is famous for his handwritten notes and I've saved every one of them, but this one is particularly important to me. And he said thank you, not for getting the deal done, but for following your, your conscience and not listening to some old man and doing what was best for the company. You know, best Bill and you know, on the long list of, of attributes that I've admired over my 30 plus years here is he doesn't think he knows everything, right? He always has a point of view, but he is quick to listen to what he calls subject matter experts. And that's something I think he and Arnie shared was this ability to be a great listener. There are lots of leaders that are great talkers and great speakers. There are probably some subset that are great listeners and both of them shared that attribute. And, and that's something I've tried to emulate during my time with the company.

Kula (21:03)

Hey everyone, it's Kula. I hope you are loving this episode with David and Tony. All the stories he tells about all of the incredible guest experiences at Marriott's across the world has me so inspired. So I hope you are loving them too. Don't forget to stay tuned for the debrief. David and I are going to give you some really practical tools from this episode that you can apply to your own leadership and to your own life. So stay tuned to the very end of the episode and do not miss, miss the debrief.

David (21:29)

And, Tony, you built quite a reputation because you were instrumental in Marriott's growth across the Western United States, in Canada, and eventually globally. For any leader who is wanting to grow their company, what advice would you give them? What's the key?

Tony Capuano (21:47)

Gosh, maybe a few things. I would say, number one, you've got to be naturally, intellectually curious. I could have spent my whole career in development and been very happy and had a wonderful career at Marriott, but I always had this natural curiosity to learn about other aspects of the business, the operating side of the business, loyalty, finance. And I think any great leader has that curiosity. They just want to learn more and more, not only about their company, not only about their sector, but across business broadly. Number two, I touched on earlier, I think leaders have to be great, engaged listeners. I think if you spend all your time talking, you're missing the most important lessons from the folks sitting across the table from you. And I would say, number three is be humble. As leaders, it's easy to, to read your own press clippings and think you know everything. You might know a fair amount about a very narrow area of your business, but to have the humility that allows you to be a lifelong learner, I think is critical if you want to grow as a leader, you know, can.

David (23:07)

You give me an example of where your intellectual curiosity took you down a path that led to some growth?

Tony Capuano (23:14)

Yeah, I mean, I, you know, we're quite thrilled. We've just launched our third Ritz Carlton yacht as part of the Ritz Carlton Yacht Collection. And over the years, we'd had lots of folks approach us about opportunities at sea. I think Mr. Marriott had a bad taste in his mouth. We were in the cruise business decades ago, and it didn't pan out the way he had hoped. And many of the early approaches we had, I didn't think we had the right course, cultural compatibility with our prospective partners. But I was intrigued with the space, and so I tried to learn as much as I could about it so that if and when the right partner presented themselves, we would have enough knowledge to understand whether we had permission to operate in that space, whether we could add real value and whether it was scalable.

David (24:07)

You know, Marriott Pro purchased Starwood, I believe, in 2016. That's one of the biggest deals ever in hospitality. What did you learn from that whole.

Unidentified Male Guest (24:18)

Experience as a leader?

Tony Capuano (24:20)

Yeah, a lot of things. But Again, it starts in some ways with Mr. Marriott. So Arnie was CEO at the time, I was head of Global Development at the time. And you know, the deal presented itself. Arnie and I sat on a board called Iraq, which is the, I think it stands for Industry Real Estate Finance Advisory Council of the AH&L A. And we were at an Iraq meeting in New York and the interim CEO of Starwood pulled us aside at the break and said, I know you passed, but are you sure you don't want to jump in? And when we had passed, Starwood stock traded at a pretty significant premium to Marriott's stock. In the interim after we passed, the stocks had inverted and the economics looked a bit more accretive and more compelling. And Arne's response was, well, maybe, but aren't we too late? And he said, no, but you didn't need to move quickly. And so we spent a bunch of time talking about it. We had the teams do some work and arnie went to Mr. Marriott on a Friday and said, this opportunity exists, but I don't want you to give me an opinion. I want to give you one sheet of paper that summarizes the opportunity and I don't want you to call me until Monday. And you could tell Mr. Marriott's initial reaction was the company's doing great. We're at an all time high in the stock price. The investment community loves us. Why would we rock the boat? That was his feeling on Friday. So then Monday he came back in and he sat with us and he said, you ought to go after it. And I think everybody was a little stunned. And he said, on Friday, I realized I had fallen into the trap that I advise all of you to avoid, and that's the trap of complacency. We're doing fine. Why rock the boat? But this has the potential to be a transformational transaction. You ought to do the work and see if it makes sense. And so that was probably the biggest lesson I learned, was even an iconic leader like Bill Marriott understood the risks of complacency.

David (26:34)

And now speaking of attacking complacency, what's the biggest change that you're driving inside the company?

Tony Capuano (26:42)

There's a few, I would say, number one, we're in the midst of the most significant technology transformation we've ever undertaken in our history. We, we're replatforming our three biggest systems, our reservation system, our property management system, and our loyalty platform. And I think technology is table stakes for most companies, certainly for companies in the travel vertical. But it also is a Bit of an interesting riddle because thankfully we've all chosen careers in the human connection business. Right. You're never going to have a hotel full of robots, at least not a successful one. I don't think. We are in the business of connecting people through the power of travel. And so technology has the potential to be an enabler of that. Right. If you work for us as a front desk agent and I give you technology tools that create 90 seconds of incremental capacity where you don't have to be staring at a screen and instead you can pick up on the visual and verbal cues of that weary traveler who's shown up at the front desk at 11 o' clock at night, and based on those cues, do some things to enhance their travel experience, then that's a massive win for us. But we've got to have the right technology tools to create that capacity.

David (28:08)

And what else are you driving?

Tony Capuano (28:10)

Well, I think I'd. Next I'd probably go to the Bonvoy loyalty program. You talked about that at the outset. We're about 260 million members and growing rapidly. If you look at these loyalty platforms across travel, whether those are hotel platforms, airline platforms, they all started in a very similar sort of rudimentary form. You enrolled in the platform, you stayed with us, you earned points for those stays, you accumulated those points, and eventually you redeemed those points for a future stay. And while that facet of the loyalty platform is still foundational to what we do, shame on us if we don't evolve that in a really significant way. That rudimentary early platform I described, our relationship with our members was very transactional and you only had occasion to go to the website or now the app if you wanted to conduct a transaction today, through content, through partnerships that we've forged, we have the opportunity to unlock this almost limitless world of experiences. Also, given the scale of our geographic footprint and the breadth of our brand portfolio, it's really the connective tissue that pulls together that whole portfolio and allows our members to explore what's possible with a company that's approaching 10,000 hotels in 143 countries and territories across 40 brands to really help them understand everything they could desire in the world of travel they can find within the framework of Marriott.

David (30:00)

Bonvoy, you know, when you, when you're trying to, you know, develop new technology platforms and take, you know, a loyalty program to the, to the next level, you got to take a lot of people with you as a leader. You know, what's your approach to taking people with you when you face these new challenges and opportunities.

Tony Capuano (30:19)

Yeah. Although I might invert your question a little bit. I think in the best of ways they're taking me along. Right. They understand our, our overarching macro objectives as an enterprise, but I'm a big proponent of leaning on subject matter expertise. So I think about loyalty. David Fleck, who interestingly came as part of the Starwood transaction, he ran SPG for them. He now runs our loyalty platforms and he's got such a deep, deep expertise. I can tell him some of the overarching objectives, but he's really going to teach me and bring me along on the journey that Bonvoy has started. And I think that's true across every facet of our business.

David (31:06)

And you know, it sounds like you have a tremendous respect for others.

Tony Capuano (31:10)

I do. We have remarkable leaders and some of that I think. I mean, I can thank all the leaders that preceded me and their focus. When you think about the company's five core values, the first one is putting people first. And we're an asset light company. Of our 9,700 hotels, I think we have own about 20. And I'm anxious to sell those. And so if you really are asset light in terms of physical hotel assets, what are your most valuable assets? The equity in our brands, the value of our contracts and our people. And so our people are so valuable. And having these incredibly passionate, thoughtful, forward looking leaders is really what's going to drive the company's success into that second century.

David (32:00)

And you know, speaking of culture, and you have a great one, I mean, you have one of the most trusted brands in the world. What's one behavior you want to see from every Marriott associate, no matter where.

Tony Capuano (32:11)

They, where they're working at one, they need to believe in and embrace those five core values that our founders built this company on 100 years ago. But just as importantly, the way I talk about core values, those are etched in a block of granite. Our core values are never going to change. However, sometimes I think people sort of exchange freely core values and culture and I find them to be quite different. Culture is built on those core values. But while the core values are etched in granite, the culture is a living, breathing entity that needs to evolve and needs to be nurtured. The day we are self satisfied with the health of our culture, I worry about our future every day. We've got to think. And this goes to your specific question. I want every associate to be thinking about what they can do to contribute by their actions to the health of the company's Culture, you obviously are very.

David (33:11)

Focused on your guests. You know, do you have a guest experience story you go back to? Because it perfectly captures what hospitality looks like when it's done right.

Tony Capuano (33:22)

I got a note from a guest once. There had been a massive snowstorm in a city where that's rare. And she was staying at a courtyard. And she realized she didn't have enough medication to last her the next few days. The roads hadn't been plowed. The. The ability to get a cab or an Uber or anything was not available. And she was genuinely concerned about her well being. She called down to the front desk and said, do you have anybody that you know that's got access to four wheel drive that maybe could figure out a way to get there? And this young front desk clerk said, let me work on it. And not because somebody told him, but because he believes in providing warm, genuine care to our guests. He walked about two miles in the snow and picked up her prescription and brought it back.

David (34:15)

That's awesome.

Tony Capuano (34:16)

Not for accolades, not for awards, but because he thought it was the right thing to do. And then similarly, I had a father reach out to me and he said, I've done a little research. I know you have a daughter. I want to tell you a story. And he had a daughter that had survived cancer. But as a result of her cancer treatment, she had to have one of her legs amputated. And so she was cancer free. She got to ring the bell. And to celebrate as a family, they decided to take her to New York for the first time. And she wanted to see a Broadway show, she wanted to eat a slice of New York pizza. She to wanted, she wanted to do all. See the Statue of Liberty, all these things. And so the family saved up, they booked one of our hotels, and he innocently called the hotel just to explain why they were coming and to say, you know, I don't need any favors, just if there's anything available, we would love a view of Times Square. And so again, a front desk manager heard this, and on his own accord, they arranged transportation for her. When she arrived, there was a red carpet to the car. All the hotel's associates were there to recognize and applaud her arrival. They arranged for Broadway tickets, they arranged for pizza delivery. You know, they just wanted to make sure she had a special experience. But when you asked the question, I was hesitant to pick any because I hear hundreds of these stories every day.

David (35:45)

I'm glad I asked the question because I love, I love hearing stories like that.

Tony Capuano (35:48)

Yeah, me too.

David (35:48)

It's Amazing.

Tony Capuano (35:50)

It's. I've had some folks, both investors and media, accuse me of being the eternal optimist. And they say, gosh, you have so many headwinds and socio political and macroeconomic challenges that, that make your business tough to navigate. Why are you such an optimist? And I say there's a maybe. I'm naturally an optimist, but what really makes me optimistic is spending time in our hotels around the world, spending time with our frontline associates, seeing how passionate they are about taking care of our guests and taking care of each other. And when you see that thousands and thousands of times every year, it's really hard not to be optimistic.

David (36:31)

You know, it's interesting because when I was CEO, I had the great blessing to be able to meet with Warren Buffett many times. And you know, I didn't. I never worked in the investor community. And I asked him, I said, what advice would you give me? He said, he said, well, you love your brands, don't you? You're really optimistic and you love your brands. And I said, yeah, I do. And he says, do you ever, do you ever say anything, you ever tell investors what could go wrong? And I said, no, I'm always talking about, you know, the positive. So, you know, you need to start talking about the things that could go wrong. People respect, respect you more for it because you at least acknowledge what might happen even though you're an optimist. What's your response to that?

Tony Capuano (37:13)

He's right, of course. I'm never going to argue with Warren Buffett. And I think it'd be interesting for you to talk to our investors. But if you listen to our earnings calls, I do think we get a lot of appropriate credit for being as transparent and candid as we can about the macroeconomic challenges that both we and our owner community have. The macroeconomic pressure that the lower end of household income households are feeling and the impact that could have on travel. Some of the challenges with the construction cost environment, the interest rate environment, the labor market. I think we're quite realistic and candid. And then you layer in some of the socio, socio political challenges that we have to navigate given the breadth of our geographic footprint. I think you absolutely have to be candid and transparent with all of your stakeholders about the realities of the environment that you find yourself doing business. But the optimism is not sort of manufactured. You know, I am very confident because of the reasons I described in our company's ability to navigate those challenges. And part of that confidence comes from the fact that we're nearly 100 years old, you talk to Bill Marriott or Arnie, their ability to navigate these extraordinary challenges and come out thriving feeds my optimism about the long term future of this company and this sector.

David (38:51)

That's great. And you've obviously done a great job communicating your story to, to Wall street and the investors. Your, your stock has really done fantastic the past few years. And I have to tell you, once I started talking about some of the downsides, you know, with our business, I, I did gain more credibility.

Unidentified Male Guest (39:07)

And you know, I think it's, you.

David (39:08)

Got to navigate the, the, the, the optimism and also the, the realities of.

Unidentified Male Guest (39:13)

The tough things that you face.

Tony Capuano (39:14)

And, and so, and I also think for our business in particular, all of us gladly, willingly choose that by its nature is cyclical. I would love to tell you every year is going to be fantastic, but that's just not realistic. Right. So much of our business is driven by how GDP is trending around the world. So much of our business is driven by the mindset of the consumer and where consumer confidence is. I talked about this with a group of investors the other day. They asked me, you know, how do you feel about the relatively muted performance in the U.S. your biggest market? And I said, well, it's, it's tracking relatively well with gdp. But I would say to you, you know, I think it was three or four months ago the US hit a 50 year low in consumer confidence. And if you had told me a year or two ago that statistic, I'm not sure even I would have predicted the business would be performing as well as it is.

David (40:18)

You have a lot of competition, obviously. You know, whether you have traditional rivals like Hilton and Hyatt or disruptors like an Airbnb, you know, what's your philosophy for staying competitive across such different types of players?

Tony Capuano (40:36)

It starts with doing what we do as well as we can. Right? Making sure we're aligning with the right owners. They are being good, thoughtful stewards of the assets. Making sure we're populating those hotels with amazing associates who embrace our core values and culture. Being laser focused on the guest, making sure we anticipate and at a minimum meet, hopefully exceed their needs for every reason they travel. But we can't be satisfied comparing ourselves to ourselves. Right. We've got to be aware of the point that you made so well. It is a highly competitive environment. There are traditional competitors, there are intermediaries, there are disruptors. And we've got to be painfully aware of what that competitive landscape looks like. And we've got to do Our best to peer around the corner. What are our guests going to expect in the future, what are our associates going to expect in the future? And what might our competitors do in the future? And try to do everything we can to stay at least one or two steps ahead.

David (41:47)

You know, when you peer around that corner and you look at the future of travel, Tony, what's the most exciting thing you see coming? And, and what's your personal leadership challenge? You have to stay ahead of it.

Tony Capuano (41:59)

Yeah, I think the most exciting thing for me we have these amazing partnerships with credit card partners, partners American Express and JPMorgan Chase. And on the long list of benefits of those partnerships, we get extraordinary data in real time around how consumer discretionary spend is evolving. If you looked at that data prior to the pandemic, you had the younger demographics already starting to shift their spending away from hard goods towards travel and experiences. If you look at that data today, the pandemic essentially accelerated that trend across every demographic. And there had been industry analysts that thought that was going to be a one year revenge travel phenomenon. But here we are several years into the recovery and if anything, that trend is accelerating. And so my personal view is there has been a fundamental shift, shift in how consumers think about prioritizing their discretionary spend. And I am certainly not a sociologist, but my sense is while folks were locked down, they weren't buying as many shoes, handbags, watches, et cetera. And they didn't miss it as much. But boy, did they miss exploring the world. Boy, did they miss traveling to see friends and family, to explore new places, to immerse themselves in new cultures. And they are hell bent on ensuring they don't miss that opportunity this time. And so this, this shift and this prioritization to exploring the world gives me tremendous enthusiasm about the long term future of the sector. And certainly for Marriott, in terms of my mindset, it's really about making sure we are listening to the constituents we serve every day. I have often said, in some ways, the challenge for Marriott leaders is every day, figuratively, when we show up at work, there's this Rubik's Cube on our desk. Because every decision of consequence that we make, we've got to look at through the lens of those three constituents we serve. How will it impact our associates, how will it impact our guests? And how would impact our owners? And to be candid, sometimes what they want and need is at opposite ends of the spectrum. So trying to strike the right balance to meet the needs and expectations of each of those incredibly valuable critical constituents is the most important thing that we've got to make sure our leaders are focusing their efforts on Tony.

David (44:46)

When I look back at my career, I made a ton of mistakes as a CEO. You know, has there been any decision you made so far that you wish you could take another swing at?

Tony Capuano (44:57)

Yeah, I'm sure there's a thousand of them, big and small. I'm not one that necessarily you need to learn from mistakes you made, but I'm not sure I want to kind of dwell on them. I want to continue to look forward the way I think about it a little bit. My family is Italian. I spend as much time as I can in Italy. And the first time I rented a car there, the guy at the car rental, he said, have you driven in Italy before? And I said, no. And he said, well, it's easy. He said, let me just give you one lesson. He said, you see these side view and rear view mirror? Ignore those. Just look forward. Don't look behind you. Don't look to the side. Just stay focused on where you're headed. And it was good advice for driving in Italy, but I think it's good advice for how our leaders should think about driving the business forward.

Unidentified Male Guest (45:49)

Love it.

David (45:49)

You know, this has been a lot of fun, and I want to have some more. And I have a lightning round of questions. So are you ready for this? Okay. What are the three words that best describe you?

Tony Capuano (46:00)

Optimistic, passionate and humble.

David (46:03)

If you could be one person for a day besides yourself, who would it be?

Tony Capuano (46:07)

Abraham Lincoln.

David (46:08)

What's your biggest pet peeve?

Tony Capuano (46:10)

People showing up late for meetings.

David (46:11)

Who would play you in a movie?

Tony Capuano (46:13)

Whoever drew the short straw.

David (46:15)

What's a belief about travel you've changed your mind on in the last three years?

Tony Capuano (46:19)

How extraordinary hotel, food and beverage can be.

David (46:23)

When was your last trip to Italy?

Tony Capuano (46:25)

Just two months ago, I think, for the WTTC conference in Rome.

David (46:31)

What's the best Italian food that America hasn't mastered yet?

Tony Capuano (46:34)

Tortellini Ambroto from Bologna.

David (46:38)

What's something you've been curious about lately that has absolutely nothing to do with work?

Tony Capuano (46:43)

Whether we'll ever make a manned spacecraft, will ever make it to Mars.

David (46:48)

What's the one thing you do just for you?

Tony Capuano (46:50)

Probably just read. I love to read physical books.

David (46:54)

Besides your family and friends, what's your most prized possession?

Tony Capuano (46:58)

Probably the St Christopher medal my grandmother gave me.

David (47:01)

If I turned on the radio in your car, what would I hear?

Tony Capuano (47:04)

Either the NFL network or espn.

David (47:07)

What's something about you few people would know.

Tony Capuano (47:09)

I really wanted to be a pilot in the Navy. And I was too short to get accepted into flight school.

David (47:19)

What's one of your daily rituals? Something that you never miss?

Tony Capuano (47:22)

I have a set of websites that I read every morning no matter how early I have to get up. Wall Street Journal, New York Times, Washington Post, ESPN.com and TMZ. So I can pretend to be relevant.

David (47:41)

We're out of the lightning round. Tony. Great job. That's fantastic. I got a few more questions and I'll let you go. You and your wife live in Potomac and you've built a great life there. How do you lead at home?

Tony Capuano (47:54)

Yeah, well, I am very fortunate. My wife and my daughter, for as long as they've known me, I've traveled like this. They are extraordinarily supportive. They love travel. My daughter followed suit and went to Cornell hotel school. She's in the industry, although she refuses to work for us. She wants to pave her own way. But I think they both share my passion for travel. They share my passion for hospitality. And one of the things we talk about often because we spend so much time in Italy, every time I come back, the thing I'm most taken with, and there are other cultures, to be sure, that are like this, but the Italians really embrace and celebrate careers or celebrate the dignity of careers in the service of others. You know, we go to the same restaurants and we have waiters that have been there 30, 40, 50 years. It's their chosen career. It's not a job, part time job. While they look for a, quote, real job, There is a real celebration of service careers in Italy. And I think my family all loves and appreciates that idea.

David (49:06)

You obviously have a great deal of respect for the front line.

Unidentified Male Guest (49:09)

And you told the dishwasher story earlier.

David (49:12)

You started out as a pot washer. You know, how do you stay in touch with the front line today?

Tony Capuano (49:17)

Well, somebody asked me the other day, what's the best part of the CEO job? And I said, you know, early in my career when I was in development, I certainly spent a lot of time in our hotels, but it was often sprinting to a meeting room to negotiate a deal. Today I get to tour hundreds and hundreds of hotels and shake thousands and thousands of hands of our frontline associates and just thank them, thank them for the amazing work they do. Thank them for taking such great care of our guests and thank them for taking such great care of each other. Thank them for representing the company so well. That's the best part of my job. I love it.

David (49:57)

You know, that's the high touch part of the job, no question about it. And here we are. Now. You talked about the need to lead on the technological front. Artificial intelligence is the buzzword for everything. Not just the buzzword. I mean, everybody's into it. How is AI going to impact Marriott? And two part question, and how are you as a leader preparing yourself to lead during this revolution?

Tony Capuano (50:23)

Yeah, so maybe I'll take the second one first because that's a little easier. I mentioned in response to one of your earlier questions, this need for leaders to have this natural intellectual curiosity. I'm consuming as much as I can about AI. I'm reading as much as I can, a few of my leaders and I spent a good week in Silicon Valley meeting with some of the most important thought leaders. Some of the conferences I attend, I choose to attend just because some of the thought leaders around AI are there presenting and I want to hear their perspective. So it's really, I'm just in the learning phase. I'm trying to be as much of an AI sponge as I can in terms of how it'll affect our business. I think that story remains to be told. I am a firm believer AI is going to impact every business, every industry in unique ways. Ours again will be a bit more unique because we've got to retain that human connection, that human touch. I think our scale makes AI particularly relevant. I traveled to one of our big customer engagement centers in in Cork, Ireland not long ago. And as part of that visit we have five or six hundred agents there. I put on a headset for two hours just to listen to the nature of the calls that come in. And that's a place we're already using AI. But imagine being an agent in Cork, Ireland and a very thoughtful guest calls with very specific needs in terms of the type of destination they want, the type of rooms they need, the types of food and beverage they enjoy. Imagine trying to navigate a nearly 10,000 hotel portfolio manually. Right? AI is critical to be able to navigate that in a split second so that we can be responsive to that guest needs. You think about functions like the traditional concierge. I think AI can be highly impactful. You think about some of the processes that have historically bin manual behind the door or the front desk, whether that's the rooming assignments that are prepared at night, whether that's night audit function. So there are clearly lots of touch points in our business and we're exploring how we can incorporate AI not simply to eliminate jobs, but again to create capacity for many of our frontline associates to be more engaged with Our guests.

David (52:53)

You know, one of your core principles, I believe, at Marriott is that success is never final. You know, how do you drive that in your organization? What do you keep front and center in your own leadership to make sure that you don't fall trapped to, you know, being complacent?

Tony Capuano (53:15)

Yeah, I talk about the dangers of complacency almost every day. It is hard to lead from the front. Right. We're the world's largest lodging company. We have these extraordinary category leading brands. We have the industry's largest loyalty platform. These are all wonderful things and none of them matter if we're ever satisfied with any of them. So whether we use the words of our founders, success is never final, whether we continue to warn our leaders about the risks of complacency, I think waking up every day and trying to be incrementally better than the day before is the key to our success. It's the key to success for our sector. It's the key to success to almost any business. You've got to aspire to get better each and every day.

David (54:09)

You know, I always felt that the feel that the best thing about business is the unfinished business. You know, what do you see your unfinished business?

Tony Capuano (54:18)

Well, you know, it's funny, when I ran development, the question I got most often is, what's the company's development strategy? And in many ways I thought then, and I think now it's the easiest question to answer. I want to make sure I have the right product everywhere you want to go for every trip purpose. Because if I succeed in that lofty aspiration, there's no need to ever leave the Bonvoy ecosystem. And that drives a lot of the strategy. You know, when we launched Marriott Homes and Villas, the question I got all the time was, are you trying to go head to head with Airbnb? I said, absolutely not. I have tremendous respect for Brian Chesky and what his organization has created. But what we hear from our customers is for a very specific trip purpose, think a multi generational vacation, a multi bedroom luxury home, better fit their needs. Well, if they can't find that within the Marriott ecosystem, then they have no choice but to go to the welcoming arms of our competitors. We heard from our luxury guests, we'd really like a luxury experience at sea that in many ways was the catalyst to the launch of the Ritz Carlton Yacht collection. And so I just think we've got to continue to be driven and by that simple idea, we want to make sure any travel needs you have, you can find within that ecosystem all Right.

David (55:48)

That's an exciting vision you have there. Last question. What's one piece of advice you'd give to anyone who wants to be a better leader?

Tony Capuano (55:56)

Be humble.

David (55:57)

And how do you do that? I'm going to ask you how you do it. Because here you are, you're leading, you're leading the largest hospitality business in the world. How do you stay grounded? You have all these associates. You walk in, you might want to come in unannounced and have people not know who you are, but they know who you are. How do you stay grounded?

Tony Capuano (56:15)

I remind myself every day how much more they know than I do. I'll give you one quick story. I was in China for the grand opening of our 600th hotel in China. And we had a great grand opening event. And afterwards I did a town hall for about a thousand of our associates. And I really had not, you know, I had a few jotted, a few bullet points jotted down for my remarks, and this wasn't part of it, but I got on that stage and I'm looking out at a thousand associates and I said to them, there aren't a thousand people walking planet Earth that know more about developing, staffing, opening operating hotels in greater China than. Than the thousand people sitting in this room. You are our subject matter experts. You know, I'm available to help you. I can make sure you understand our overarching strategy. But boy, I hope I'm not making many of those decisions because I have this extraordinary pool of subject matter expertise here. And that's how I feel when I walk through every one of these hotels, right? I get out of the car and I meet a doorman. He knows more about where to catch a cab, where the best Irish pub is, you know, where to get a newspaper, all those things than I could ever know. He's the subject matter expert. Right. And if you remind yourself of that, it's really easy to be humble. Everyone has their own sort of bucket of subject matter expertise and it's fantastic.

David (57:46)

Well, Tony, you're obviously the subject matter expert on how to be a great CEO. I mean, you, you know, you care.

Tony Capuano (57:53)

About very much a work in progress. I told Bill Marriott I would try to get one degree better every day. I got a long way to go.

David (58:00)

Well, you're doing well. You're doing well, let's just say that. And I want to thank you so much for taking the time to be on Halleaders lead and sharing your insights and stories. Just a lot of fun.

Tony Capuano (58:10)

Anytime. Thank you so much for having me and thanks for giving me a little forum to talk about our incredible associates around the world.

David (58:18)

All right, great.

Kula (58:25)

David, Tony's got me really wanting some Italian food.

David (58:30)

Well, I thought you were going to say he's really wanting you to stay at a Marriott.

Kula (58:34)

I want to stay at a Marriott in Italy while eating Italian food at that restaurant that he talked about, that's in Bologna.

Unidentified Male Guest (58:40)

And, you know, you probably took his recommendation that he made for the. The best bed.

Kula (58:46)

Absolutely. Absolutely, I did. I love this episode, David. And we're going to get into some of the key ideas that Tony shared so that our listeners can something really practical to take away from this episode. Of course, one of the core values as we heard Tony talk about a lot at Marriott, is that success is never final. And he talks a lot about fighting complacency. And I know, David, that you've said many times that every leader should have a healthy dissatisfaction with the status quo. So kind of that same idea of fighting complacency. What are some of the things that you do personally, David, to fight complacency? And what advice can you give others on how to do the same?

David (59:25)

Well, I think, you know, I picked.

Unidentified Male Guest (59:27)

Up something that I know Jamie Diamond, Jamie Morgan Chase did all the time, is he benchmarks competition not only internally, but externally, you know, in different categories of who's the best at processing orders or whatever. Okay. And, you know, he tries to find people that are doing something better than you and then let the people know that this is, this is, we gotta, we gotta up our game to get this, that level. I think that's great. I think the biggest thing, I think that really drives finding complacency is the voice of the customer. I think you just gotta be all over the voice of the customer. And, you know, you gotta keep learning on what you need to do to get better and how you can improve and, you know, how can you get better execution or whatever, but just keep bringing that voice of the customer back to you. And, and then, you know, never get intoxicated by your financial performance. Okay. Yeah, it's great that you, you've done well. Get focused on, get intoxicated with how you got there. Okay. In other words, if you're a CEO, don't get so excited about your stock price. Get, get, get excited about, you know, what it takes to build that stock price, and that, that, that gets people.

David (60:40)

If you want to keep growing, you.

Unidentified Male Guest (60:42)

Got to keep, keep growing. And I think that's very important.

David (60:46)

So you can't really reap the rewards without Growth.

Unidentified Male Guest (60:50)

And so I think as a leader, you got to just keep telling everybody that this is what we do. This is why we get paid. We get paid to grow the business. And you can't grow the business by staying the same. Just did a podcast with Chuck Robbins, the, the Cisco CEO. You know, they're the, they dominate across the board in the Internet services and incredible leader. But he said he had somebody in his company say that in six months they'll be as good as competition. He goes, what makes you think that it's competition going to stand still for six months while you catch up? But I think it's that mindset of having a healthy dissatisfaction with the status quo, which is great and healthy. By that, I mean, it's like, hey, you know, at least celebrate the success that you have, but don't be, don't be, you know, satisfied with it. You know, I always say, and I love this line, and I don't know if it's my line or not, because I don't know where a lot of these things come from.

Kula (61:48)

I'll give you credit out of my.

David (61:49)

Mouth, but it's the best thing about.

Unidentified Male Guest (61:51)

Business is the unfinished business. And the best thing you need to do as leaders just to keep identifying it. What haven't you done?

Kula (61:58)

He talks a lot about the importance of that intellectual curiosity. And he also is on the road 200, 250 days a year. So he's the leader that I think knows the importance of the voice of the customer and going there first for ideas on how to innovate and continue to get better. David, another story that I loved from the episode Tony tells, it was early in his career and he was trying to get this deal done. And Mr. Marriott calls him and says, hey, back off this deal. They say, you're being too aggressive. Like, let's just get it done in the way that works for them. And Tony stuck to his guns and kept pushing forward and got the deal done and all of the points in the deal that he wanted to get done. And Mr. Marriott then goes on to actually thank Tony for not listening to his advice, but rather trusting his gut and doing what was best for the business. So I love the story. It's a younger leader telling the founder of the business, hey, I, I think that my gut is right here and I'm going to go with it. For leaders listening that might be in a similar position. What would you, how would you advise them on how they should handle situations like that where their gut is telling them one thing that might Be different from the boss.

Unidentified Male Guest (63:10)

I think this, this is a truism that works every single time. Kula. Do the right things and the right things happen. And what Tony did there was, he did what he thought was right and then the right things happened. Bill Marriott sends him a note and says, hey, you know what? I was very satisfied with all the progress we were making. And he, he admitted that he maybe had too much satisfaction with the status quo and thanked him for pointing out that the way they had been successful was by challenging convention and doing things different. And I love that story for two points. Number one, you know, do the right things, the right things happen. And that's what Tony did. And then I also love the fact that Mr. Marriott really pointed out the fact that, you know, maybe he had gotten a little bit complacent. And, you know, as leaders, we gotta have people around us. They're always pushing, pushing us forward. And Tony obviously did that at, does that at Marriott and did that for Mr. Marriott, and that's why he's the CEO. He did it enough times where it became sort of a trait that said, hey, if we follow this guy, good things going to happen.

Kula (64:13)

I love all the stories he tells about Mr. Marriott. He's still such an integral part of the business. David, as we wrap up this debrief, if there's one thing about Tony that you are really taking away from this conversation and going to incorporate into your life, what is that thing?

Unidentified Male Guest (64:29)

Well, first of all, you know, Tony's very accomplished. The company's done extremely well. He's made lots of acquisitions. He's trying to own basically the world of, of rooms. You know, they're different kind of hotels and you know, he's trying to compete in every aspect of the business and he's done extremely well. You know, so he's accomplished, their stock's really doing great because of the things, the wins that he's put up on the board. But the thing that I took away the most there was just how much REVERENCE he gave Mr. Marriott. Yeah, I love the fact that Marriott has an icon. It's Mr. Marriott and the Marriott family. And he gave, you know, Mr. Marriott the cred that he deserves. And that's the shout out, that genuine shout out. That genuine respect that he had for Mr. Marriott really, really, really impressed me.

David (65:25)

You know, too many times leaders want.

Unidentified Male Guest (65:27)

To be in control and that means they've got to wipe out the pass. They got to be the new sheriff in town. They, they, they can't celebrate the, the, the person that helped build the company or get the company to where it is. I think whenever you can give homage to, to. To someone, you know, for, for the work that they've done that allows you to. To have the opportunity that you have, then, you know, I think that's great. You know, tonight I'm having dinner, for example, with the current CEO of Yum Yum Brands and the last CEO of Yum Brands. You know, so there'll be three young brand CEOs going to Limoncellos tonight here. And, you know, but, you know, they go out of their way to give homage to me not because I'm anything special, but because of the culture that we build at Yum Brands. And, you know, I think that's important not because of the recognition I get, but because it's the culture that I want to see sustained at Yum Brands that I think is going to help them grow results and put people capability first. And that. That's what, that's what really matters. And that's what Tony's trying to do with Mr. Marriott. Mr. Marriott put the culture in place, put the principles in place, and he's sustaining it, but he's not sustaining it exactly the way that, that Mr. Marriott did it.

Tony Capuano (66:51)

He's.

David (66:51)

He's raising the bar in many different.

Unidentified Male Guest (66:53)

Ways and doing things differently, whether it's developing new approaches to AI and customer satisfaction. He's doing things that Mr. Marriott never did. Okay. And that's what you got to do. Keep finding that unfinished business, turning over new leaves. And yeah, that's what I know the CEOs at Yum Brands are doing as well. I'm history, and they're writing new history.

Kula (67:15)

Well, you've certainly cemented your name in the history of young brands. That dinner's gonna be so special. I can't wait to hear the report on what you guys talk about.

Unidentified Male Guest (67:22)

Well, I'll tell you that I hope that the linguinean clams are good.

Kula (67:25)

You love the Linguinean clams. I have no doubt they will be good. David. That does it for this week's episode of How Leaders Lead. Thank you so much for tuning in. And we will see you next.