Marriott International CEO Arne Sorenson was a guest on Travel Weekly editor in chief Arnie Weissmann's Backstage Pass, a featured program on the World Travel & Tourism Council's WTTC Channel last week at the organization's Global Summit in Bangkok. Sorenson's summit presentation dealt with the apparent conflicts between the populist movement, as represented by the election of President Trump and the Brexit vote, and the globalist movement, as represented by organizations such as the WTTC. In his interview, Weissmann explored related issues.
Q: At hospitality investment conferences during the last presidential campaign, many executives expressed concern about what a Trump presidency would mean to the industry. Now some of those same executives are saying it's not so bad. The stock market is performing wonderfully, the dollar is strong. Are you seeing the expected "Trump Slump" in your properties? Or is what you're seeing not so different?
A: I think mostly not so different. Obviously, the stock markets are up significantly; that is probably a sign that economic growth is expected to be better. It's possible we would have had that even if President Trump had not been elected; you can't necessarily clearly connect the two. But it could also be that [it's anticipated] that something around infrastructure investment or tax reform or something will help the economy grow faster. That's good news and will drive an increase in demand. When you look at industry data today, what you see is [RevPAR] growth that appears fairly anemic: a 2% to 3% sort of range, not really a bull market.
Q: Are you concerned particularly in the meetings space? If I were a multinational organization and I have employees and staff and perhaps even speakers whom I want to bring in but they are from countries on the travel ban list, I wouldn't want to leave anybody out. For big properties in Las Vegas, which has been a very attractive destination for global meetings, is this on their radar?
Arne Sorenson
A: Oh, yes it is. We've picked up maybe two handfuls worth of groups, sometimes social groups [like] a wedding, [or] business groups that have an international flavor, planning to come to the U.S. who have said, 'Can we look for something else instead in Canada? Or in some other hotel?' Or, 'We're actually going to change our location, and we're not going to talk to you any more about it, precisely because of this concern, which is that some folks traveling from abroad may have a difficult time getting into or getting out of the U.S.' But they're anecdotes mostly.
When you look at global travel trends so far what we see is, not surprisingly, inbound travel from the Middle East is down -- probably over 20% -- inbound traffic from Mexico is down nearly 20%, but inbound traffic from all international markets is flat or maybe up a little bit. Why? Maybe because the economy's up a little bit.
Q: Europe seemed generally appalled by the results of the U.S. election, but that hasn't translated into concerns about coming into the U.S. on a vacation.
A: One reason we have to be a little bit cautious here about the data we have today is that the most sensitive travel is leisure travel, which tends to have longer booking windows, maybe months in advance, and it seems to be concentrated in certain months of the year. So for travel to the U.S. from Europe, that's really about the summer. It's not until we get to the summer that it will be clear [whether] the noise about the travel ban, or the noise about whether you'll be welcome in the U.S, is actually impacting that discretionary travel.