Marriott CEO Says Some Covid Cuts Permanent, Emphasizes Hotel Owners Vs. Guests

Jeff Bezos says the biggest mistake businesses make is not focusing most on what customers want.

If Marriott can’t deliver the most value to guests, those guests have options – more so than with airlines or car rentals in many markets. They don’t just compete against Hyatt and Hilton but also Airbnb.

However Marriott’s CEO – who says workers make too much money and guests need to have more sympathy for hotel ownership groups – says Marriott needs to balance “the expectations of our guests..and the financial realities that our owners and franchisees face.”

This means “hotels might have a different way of doing business going forward.” Brand standards will be enforced “sometime next year.” But they’ll be modified to “consider franchisee feedback and..focus on reducing costs” with moves like “elimination of daily housekeeping at certain properties.”

Brand standards around everything from food and beverage concepts to housekeeping were relaxed during the pandemic to allow owners to focus more on sheer financial survival. But Marriott leaders plan to return to these standards and making sure owners and franchisees are abiding by them by sometime next year.

Oberg and Capuano reiterated during the call that the reintroduction of brand standards will consider franchisee feedback and a focus on reducing costs. This could mean further emphasis on contactless features like mobile check-in and check-out, which reduces staffing needs at a front desk, and elimination of daily housekeeping at certain properties.

“You can expect us to continue to try to strike the right balance between the expectations of our guests as they get back on the road and the financial realities that our owners and franchisees face,” Capuano said. “Whether it’s housekeeping protocols, whether it’s food and beverage service, we’ll continue to evaluate service levels by market and quality tier around the world.”

Viewing franchisees as the customer, rather than guests, is at the heart of a problem at Marriott that began under the late Arne Sorenson. If you want to understand the mess Bonvoy is in,

  • The program was intended to lower owner costs
  • The basic offered benefits are richer than Hilton or IHG, from late check-out to suite upgrades
  • The problem is that benefits aren’t consistently offered at the hotel level
  • And the program isn’t proactive enough about enforcing consistent delivery of benefits (that would require financial penalties for owners)
  • And they aren’t investing in customer service that properly understands program rules and proactively helps guests, instead customer service usually gives wrong answers where disputes with properties are concerned (this reflects management’s predisposition and better customer service means higher costs)

Somehow management is in a bubble where they hear mostly from their true customers, hotel owners. Guests are the product they sell to owners.

But they are undercutting their business, stuck in mid-2020 when hotels lacked guests and revenue was scarce, rather than focusing on a future where there is significant business to compete for.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Totally agreed. I am currently checked in at the San Francisco Marriott Marquis. Despite there being a food facility open, we are not referred free breakfast with our Platinum status, only $10 per day (for two people!); the coffee was $4.50 per cup. My experience at the hotels I have stayed at has varied wildly–at a Residence in in Folsom, CA we were given a paper bag with a bottle of water and an apple for our “free breakfast,” while the JW Marriott SF is offering free cooked-to-order breakfast for elites. Suite upgrades are also an unholy mess–for my state at the Adagio SF last month, I used two Suite Upgrades, and was downgraded to a smaller room, with the hotel saying they don’t know why the Suite Upgrades were accepted (which is funny, since its they who have to accept them!); I still have not gotten them back, and I don’t have the two hours it would take to battle Marriott to reclaim these. I plan to initiate a status match to Hyatt in the very near future.

  2. Gary, why doesn’t any of this surprise you or any FT’er’s ? Once you take something away its almost impossible to get back. AsI have said in the past the biggest mistake I made was having 4400 room nights at Marriott and sitting here with 1.8 mm points thankfully ( SO FAR ) those are safe due to Lifetime Status and that essentially means I can get a cup of coffee and just defrosted muffin at most Marriott !!!

  3. After being Bonvoyed on my last stay, Gary Leff writes that Marriott’s Chief Executive Officer, Mr. Anthony Capuano, thinks guests need to have more sympathy for ownership groups. To help Mr. Capuano find “sympathy” in the 1995 film Major Payne, Daymon Wayans, playing the titular Marine, says, “You’ll get no sympathy from me! You want sympathy. Look in the dictionary between shit and syphilis!”

  4. First of all I am lifetime Titanium w Marriott and Hilton Diamond. It amazes me how self absorbed everyone on here is! All you care about is what’s in it for you without any regard (or even understanding) of the underlying business issues.

    If you don’t like Marriott you are free to stay somewhere else. However their customer (like ALL the major chains) are the hotel owners since all use a franchise model. Also as much as people on here just righteously indignant about how the programs are run rest assured:

    – people on these blogs are a rounding error and don’t materially matter to their bottom line.
    – before any change is made it is modeled to determine business impact (including worst case) and a business decision was made it was the best solution.

    PLEASE keep ranting (you too Gary) and stay wherever you want but you can’t fault businesses for making decisions in their best interest even if it doesn’t work for you.

    Get over yourselves!!!

  5. I have not stayed at a full service hotel in a year since February 2020 becasue there is NO service. I try to find the newest limited service hotel in the area and stay there. Brand no longer matters. Its 1/3 the cost. I can find my own breakfast. Lifetime Platinum no longer matters.

  6. But Marriott is going to give people what they want, Gary, which is a consistent price with less service, rather than a higher price and more service.

    Those of you who are not employers have no idea how the US labor market has changed since the start of the pandemic, and the dawn of unemployment benefits that often pay low-wage workers not to work.

    If you are a hotel owner, your only choices are to raise prices or offer less service.. Or you can go broke.

  7. After being Marriott Titanium for a few years, I made the switch to Hyatt this year and haven’t looked back. It’s just a vastly superior program in every regard except for the number of properties.

  8. @AC: If a loyalty program doesn’t engender loyalty, rather acrimony, there are a lot of independent hotels who would love my business.

    The hotels may be hurting but that is not MY problem.

    I’d never go to ABNB but these same franchise hotels can often be had for a discount without the meager benefits.

  9. I gave up on Marriott this year and am about to cancel my Bonvoy Amex. Complaining is useless since we are rightly called out as a rounding error – less than a rounding error, in the case of Marriott. I have a few stays with Hyatt (and Accor) coming up, but even there, the value I see isn’t in staying so much as higher-end redemptions, for which I can earn more points by using my Sapphire Reserve. Instead, my paid stays have been at truly independent properties. I’ve typically found them more affordable, better located, more polished service, and better value. I’d rather pay $10-$20 extra per night for a guaranteed breakfast than waste my time earning status with benefits that won’t be honored.

    I’m a lot happier.

  10. At the end of the day market forces will dictate if this was, or wasn’t, a good move on Marriott. Maybe consumers will continue to frequent Marriotts as they may still provide perceived value in the grand scheme of things. Maybe other chains will follow too. At the same time, Marriott may not be considered a good enough value in the future vs. the competition and the chain will lose market share; thus, hurting their customer-owners because they cannot provide enough “product” (consumers). Time will tell.

    On another note, if Marriott can line up their standards to be consistent, be it with Bonvoy and brands, that will go a long way. All it takes is inconsistency to lower the perceived value of the program or brand. For example, if I book a full service Marriott and get only the perks of Fairfield, why would I go for a full service Marriott again?

  11. I find the utter arrogance of both the Hilton and Marriott CEOs appalling. Customers need to know just how little they care about them. They are milking customers with fees and providing ever fewer benefits.

  12. I’ll probably keep using chain hotels for biz and start price shopping breakfast-included rates (chain and independent) for future stays.

  13. @AC 100%. Anyone foolish enough to stay at a 1000+ room Marriott regardless of uranium status held gets what they asked for.

  14. And the winning and smartest comment is @AC’s!

    Folks in here, who are “a rounding error and don’t materially matter to [a company’s] bottom line”, would gladly trade a hotel chain’s financial health or even survival for that hotel chain’s loyalty program keeping ‘guaranteed’ 4pm check-out. Such chutzpah!

  15. Short Marriott stock. If they don’t take care of their people and end customers (which are the staying guests and housekeepers, not the franchisees), the numbers won’t take care of themselves.

    Capuano and crew have started a financial cost cutting death spiral (IMO) by honking off their best customers. They are grabbing at straws to save their jobs. If the customers are happy, their franchisees will make $$ and their share price will increase. 101.

  16. This is about a lack of real leadership in both major chains. I have been to individual franchisees who are still serving hot breakfast and cleaning rooms because they know they need to be competitive. What this is about is the undermining of standards these brands used to uphold.

  17. LONG MARRIOTT STOCK. Marriott is cutting costs while charging guests the same or more. That’s a winning combination; the American business dream. The casualties of “elite” “status” are meaningless to most travelers, including high value business travelers who can bear the brunt of ancillary fees because they’re reimbursed.

    I’m still staying at Marriott hotels without concern for elite status. Why? Marriott provides reliably comfortable accommodations. The same cannot be said of Wyndham and Choice. Even IHG is iffy. Hilton is great too, but smaller footprint. Hyatt is greater still, but even smaller footprint.

    End of the day what guests care about is not a free breakfast or lounge or even suite. What guests care about is are the sheets clean, is the room safe and comfortable. Marriott enforces enough of a brand standard to meet these bare minimums that Wyndham, Choice, and independent hotels do not or cannot.

  18. I don’t agree. Marriott is lowering standards everywhere except their elite hotels, same as Hilton. This is a death spiral for the stock, the brand and the chain.

  19. It is interesting how Marriott and Hilton are focusing on reducing costs for their owners as if the only option is for customer’s to book direct with Marriott/Hilton which then generates the sale of points to these chains. However, many of these same owners who complain about the fees they have to pay to Marriott/Hilton and want the guests to accept less offer travel agents and 3rd booking websites better rates. Since many of these rates include breakfast and are less than the published rate at Marriott.com or Hilton.com but because they are available through a travel agent with slightly different cancellation policies then the official channel they are not eligible for the price match guarantee. However, the travel agent does earn a nice commission so these owners will just drive more business to these other offerings or competitors and thus their revpar will decrease since the rates are lower and they include benefits such as breakfast or even upgrades.

    At the end of the day, the only reason I value my elite status is for travel internationally and specifically Europe and Asia which treat elites much better. For domestic trips I am brand agnostic because club lounges are pathetic and don’t even usually include complimentary liquor and the breakfast offerings have been woeful.

  20. Hilton’s CEO saying they would reduce standards was more a sales pitch to franchisees of Hyatt and Marriott flagged properties who want to cut costs. Marriott’s CEO is probably responding to franchisees threatening to de-flag and leave for Hilton.

  21. If my stays at Marriotts and Hiltons this summer have taught me anything, it’s that neither is going back to the service levels of 2019. It has also taught me that status is no longer worth maintaining or chasing. Like many business travelers who can expense meals, I have little use for a $10 breakfast coupon at hotel restaurants that charge $5 for coffee and $6 for yogurt. My suite night certificates are worthless. Most properties now want to hold their suites until well after check in, hoping and praying that they can sell them last minute. I’d love to have a dollar for each time I was told “we just can’t give you a late checkout because COVID.”

    Getting off the status treadmill has actually been liberating. I hope others will do the same. If Marriott wants to model their customer service philosophy on Spirit Airlines, so be it.

  22. So much entitled and unnecessary bitterness when anyone who is unhappy with Marriott can move at any time.

    Capuano never said he was moving Marriott more to the owners — only that the current climate requires a shift in their direction in the ever present balance between owners and guests. Duh, anyone who isn’t aware of that should stay home and bury their head back in the sand.

    Whether those here want to admit it or not, Marriott’s hotel management is a business. Hotel ownership is a business. They’re there to earn profits. If you have a problem with that, then you’re all welcome to enjoy the lovely quality of hotels in North Korea.

    So much bellyaching from so many spoiled & entitled children. You’d all go elsewhere to be happier at hotels until actual reality smacks you in your ignorant faces and makes you realize the simple truth that the same issues confronting Marriott and its owners are also confronting Hilton, IHG, Accor, and even Hyatt and their owners. Yes, even Hyatt, or had no one noticed that’s the reason why so few hotel owners choose Hyatt brands in the first place?

    It’s so hard when things change for entitled people — and they realize so much that they took for granted wasn’t because they’re so special, after all. Suddenly, all the discounted govt contractors and corporate rate employees have to pay more and might get less despite their rates being lower than most.

    Cry me a river. Please go stay now with Hilton, Hyatt, IHG, Accor, or (gasp) Wyndham or Choice. We’ll be laughing at you as we continue staying at hotels with better expectations for the circumstances.

  23. What a lot of commenter here seem to not understand is where the issue lies. The issue is with the misleading nature of the stated benefits and the lack of enforcement. When Marriott says “stay 50 nights get free breakfast” then when this policy isn’t enforced that’s why people are so mad, they are entitled to that breakfast. They’re entitled to it because Marriott promises it in exchange for additional incremental business. A lot of people who disagree with Gary don’t seem to get that, they seen to be hung up on unrelated principles/values instead of the deceptive bait and switch business practices.

  24. Well, I was also reviewing my travel during the pandemic and came to a conclusion that some severe cuts to the number of nights and $$ I am spending with Marriott would become permanent based on the same criteria – more benefits for me for less or the same money. As a disclosure, I do not own a Marriott stock as a separate investment and I do not care what it is for Marriott and their shareholders.

  25. @Scott
    Marriott has kept it’s promises. They never specified what the free breakfast entails. It used to be a full buffet and now it’s a $6 coupon that covers coffee and half a scone. Sure. Technically that’s still in line with what is promised, so you have no beef.

    The point is that all the other hotel chains are doing the same thing (Hilton) or even worse (Wyndham and Choice cannot even promise you a safe and clean room). So Marriott remains competitive.

    Individual travelers who say they’ll cut spending on Marriott are meaningless to the macro picture. I personally may increase my spending on Marriott and that might outweigh all those who cut back.

  26. Lifetime Titanium and Marriott shareholder but also Hilton Diamond and am choosing accommodation based on what each property is offering regardless of if I have status. So I am now IHG Gold from actual stays, not platinum from having a credit card because it worked out better for me.

  27. J.P. That’s not true. If what Marriott provides doesn’t meet the definition of breakfast as would be reasonably construed they would be in breach of contract.

    Not defining it works against Marriott because a customer could argue and would probably prevail that it would be what a reasonable person would believe it to be.

    I’m not sure a judge (or jury) would by sympathetic to the argument that a paper bag with a bottle of water and a muffin to go would qualify given that the industry standard for years has been to identify the morning meal as either “breakfast” when they provide hot entrees or “continental breakfast” when pastries, coffee and generally juice are available (but often a lot more varied cold items).

  28. Tell you what, I stay at a hotel for convenience, which includes services like housekeeping and, if not room service, then a bar/restaurant or breakfast or something like that. I generally stay in luxury hotels. I do that because I appreciate being looked after while I travel. But I’ll damned if I’m going to pay hundreds of dollars a night and not get my room picked up each day and get a paper bag with a water and an apple in it. (And I am not messy but I appreciate someone coming in and replacing the towels, making up the bed, and emptying the trash.) I’ll stay in someone’s house via Airbnb.

  29. Jon i agree and this is what I call brand erosion. No one is going to sue over breakfast. We will just leave and find alternatives like Air b’n’b or Vrbo.

  30. Most travel booked with Hyatt this year as they have generally kept service levels intact. If Marriott doesn’t want my business that’s ok as I have other options at the same price or better.

  31. I hear a lot of Marriott blasting. I’m staying at Hotel Colonade Coral Gables Fl. 35K point free night cert.
    Suite upgrade. Elite breakfast. Vote with your wallet. If a property isn’t giving you value guaranteed there are one or two others nearby that will

  32. I think the problem is Marriott and Hilton give their status away. I’m Titanium, Diamond, and Globalist and it really didn’t take too much work. If there was a tier that they didn’t just give away, I think there could be a reasonable expectation for meaningful benefits.

    Marriott’s problem, I would imagine, is at any US hotel half the guests are Plat or higher leading to the “If everyone’s elite…” conundrum.

  33. @DCS – Like you’re any different….you’re an idiot as usual. Why don’t you come over and just let us mushroom stamp you? We won’t even buy you dinner.

  34. @jerry – I agree 100% about Hilton which is why loser DCS is an idiot. But while Marriott might have made it easier this year, it’s far from a gimme. All I know is were titanium and stayed in Louisville and they were like “oh you’re titanium thank you so much for your loyalty.” Which it is what it is but I do still think titanium means something….,not much but something.

    Maybe I should whine and cry and print a copy of the T&C but I have better things to do and still usually get an upgrade.

  35. This will all Come full circle really soon. My thought is next year Marriott will attempt to match Hilton but once they realize people aren’t spending money with a 10 bucks credit when a coffee is 4.50 and resis are down I expect a complete 180. I would argue Marriott will be the first for this. They still do seem to have two halves of a brain. It might be 1.2 filled but I think they’ll come around.

  36. @J.P. — “…now it’s a $6 coupon that covers coffee and half a scone.” Just curious: on what planet is that considered breakfast?

    /\/\/\/\/\/\/\/\/\/\

    As an SPG Gold elite, I’ll confess first skepticism when Marriott made the acquisition in the first place, but that was soon replaced with a sense of relief re: how they handled the points. Now I understand the necessity of cutting back during Covid…I *even* understand not returning to pre-Covid service until the business returns to normal (and it hasn’t).

    That said, I stayed with Marriott and Hilton due to a) their footprints, and b) the availability to book overseas vacations on points. For that reason, I will probably stay with them, but I don’t have to like the service cutbacks any more than I have to like the CEO’s attitude re: Marriott’s employees and its *real* customers (the paying guests, not the francisee). However, this doesn’t mean I can’t complain to “the powers that be” re: the service cutbacks and their failure to meet promised obligations. (Will it do any good? Probably not, but it will make me feel better.)

    If I could, I’d switch to Hyatt — and I will where I can. Hyatt is great, but I’ve been unable to stay in some favorite locations due to its very small (relatively) footprint.

  37. @DCS – Like you’re any different….you’re an idiot as usual. Why don’t you come over and just let us mushroom stamp you? We won’t even buy you dinner.

    — Shawn

    If you’d like to see a real idiot, capable of only launching unprovoked insults, just take a good look in the mirror. I have no idea who you are and I do not care to know. Just do not address me again because I have no interest in dealing with a moron whose little gray cells do not generate impulses beyond those of a troglodyte.

    Get lost.

  38. Marriott management brings up legitimate issues hotel owners have. Guests who built up status also have an issue with not being provided benefits they expect with their status. Marriott management itself is the real problem here. They shouldn’t have made getting status so easy for the wrong type of guests. They shouldn’t accept properties into their chain that don’t meet their standards. They need to better supervise hotels in their chain. They need to be willing to end partnerships with hotels. Hotels also need to walk if being in the chain is too costly.

    A significant segment of those with high status earned it from unprofitable spend or churning/hacking gimmicks (of course all here do so). Marriott may not feel it is that important to satisfy these type of guests who aren’t greatly profitable for the chain and are gifted at utilizing the point and mileage system for stays. A lot of people who aren’t professional low end business travelers or points/miles people are happy with the rewards program. There is plenty of value there. People staying in $129 Courtyards for work who earn high status with the program aren’t making the Ritz or high end Marriott properties/luxury collection/st. Regis much money when they stay with points and get all these upgrades.

  39. “Whether those here want to admit it or not, Marriott’s hotel management is a business. Hotel ownership is a business. They’re there to earn profits. If you have a problem with that, then you’re all welcome to enjoy the lovely quality of hotels in North Korea.”

    I believe in capitalism — which allows me to choose where I spend my money (unlike you know North Korea). Marriott and their hotels make an offer (we will not honor elite benefits such as a good breakfast even if you pay more to stay with us) and I and most people commenting here can find hotels that make us a better offer either on price or features we want. For businesses that treat me well I’m willing to pay more. Sadly Marriott is, under current management, not one of them at this time.

    The last few years have shown that being a “free agent” and choosing the best offer free of any hotel or airline allegiance makes for better travel. Capitalism at it’s finest.

  40. My goodness, the comments are amusing. It’s not entitlement to expect that what a brand promises will be delivered. Little mystery why franchisees are questioning the value they get for the fees. That said, I have long since voted with my feet. Ultimately the question for franchisees is whether the business can be sustained on corporate contracts alone amidst the race-to-the-bottom. In the leisure market, it’s going to be hard for legacy properties to ever match the holiday inn express model or airbnb.

  41. @Jackson Waterson: I have spent over $60,000 just on my own rooms since January 2020. I’ve spent another $110,000 on meetings and events with customers. I think I’m pretty profitable. I still can’t get breakfast at many properties, who think it’s okay to gip me over a cup of coffee and egg whites with spinach.

  42. AC be sure to check your VM I hear Marriott is going to offer you a job as the new Vice President of PR. Having recently stayed at a mix of US and foreign properties I noticed that the foreign properties were much more grateful for my business and went above and beyond in recognizing my status. I too am tired of all of the cost cutting measures in the name of safety / Covid. It is BS. I don’t spend $200 + dollars a night to make my bed, clean my room, take a cab to the hotel and eat out of a brown paper sack. I will judge each property on its own merits and I will not return to those properties who are not up to my standards regardless of which flag they fly under.

  43. They all keep going down and down. I’m LT Titanium and have not even spent one of my free nights in a Marriott since the switch. Between them and Hilton cutting housekeeping?? Why would I spend $250 a night, no housekeeping, miserable breakfast if offered and resort fees for stuff I get anyway? If I have to clean up, then I’m getting a place with a washing machine and (my own) decent and far cheaper breakfast. Save tips, parking and overpriced often subpar service. Absolutely no skin off my back, I’ve never looked back.
    I would certainly not be a stockholder of a company that doesn’t consider customers to be important.

  44. As a permanent gold member. My recent stays a 4 Marriott properties was nothing but very much disappointing. The lack of service is appalling. In on Texas hotel when we went for breakfast, the was no one in the restaurant, no one! I went to the manager and asked if I was supposed to cook my own breakfast? This was after I asked four days for the room to be cleaned. In the next city I decided to stay at a Hyatt. The difference between the two was unbelievable. This Hyatt actually cares about the guests.
    With Marriott’s current attitude toward its guest will cost the more than money, but loyalty. Which I harder to get back once lost.

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