Travel has returned after COVID-19 suddenly halted jetsetting—but trip trends don’t resemble those prior to the pandemic.
Reports consistently show that domestic leisure travel has bounced back, while business travel hasn’t picked up. According to Tony Capuano, CEO of Marriott, who joined Senior Editor Amy Farley at the Fast Company Innovation Festival, when guests are traveling for businesses, they’re also tacking on leisure days to those same trips, effectively blending business and pleasure.
Marriott’s revenue had dropped 49% in 2020, a tough situation to counter when Capuano became CEO in February 2021. And there were worries travel wouldn’t pick up again. “You had Bill Gates saying 50% of business travel would never come back,” Capuano said. “He was saying that as he was selling us Microsoft Teams for video conferencing,” he added. Joking aside, there’s a chance that business travel won’t rebound fully until 2026—or ever. Business travel raked in $697 billion in 2021, far off from the $1.4 trillion generated in 2019. Forty percent of U.S. respondents to a survey said they would never travel for work again.
On the other hand, leisure is back to normal, with domestic vacations back at pre-pandemic levels. But: “The strength of leisure is not necessarily a pandemic-driven phenomenon,” Capuano said, stressing that Marriott saw leisure rise starting in 2017, when it became its fastest-growing segment. That’s when the company entered the all-inclusive space, and “aggressively” increased its resort portfolio.
Now, travelers are mixing the two, in what some have called a “bleisure” segment. “I hate that word,” Capuano said. Whatever the terminology, Marriott is seeing that those traveling for business, say to a city like New York, are tacking on a few more days to see the sights. “The first two days, you’re dressed in business apparel, the second two days, you’re in shorts and flip flops,” he said.
Even back in 2017, the chain knew that city hotels, typically more conservative in design and programming and catering to the business crowd, had to get more creative. That’s still true now, but it’s harder with blended trips when it’s harder to predict what guests will want, and when. Hotels will have to cater for those arriving for business, who just want to grab a keycard and go up to their rooms unbothered. Those coming with families may want to talk to the front desk and concierge, and get restaurant and attraction recommendations. “We’ve got to be able to serve both sets of needs,” Capuano said. “And often, those dual sets of needs are from the same customer.”
“If you check in for that four day trip that I described, I’m not gonna interrogate you at the front desk,” Capuano said. But, they have to be prepared. And they’re starting with programming, tweaking food and beverage outlets, fitness and wellness amenities, and ensuring there are pool lifeguards and activities. “It’s not easy in the blink of an eye to change the physical layout, but [with] the programming, we’ve made some pretty significant pivots,” he said.
Marriott’s loyalty program may also play a part in helping to accommodate leisure, when it’s been business-focused in the past. Capuano wants Bonvoy, which has 170 million members, to evolve into having a more “emotional” connection with travelers. “Our relationship with our Bonvoy members today is too transactional for my taste,” he said. Soon, the chat functionality could help vacationers build their Hawaii trip itineraries, for example, leading them directly to the concierges at the Ritz Carltons in Capu and Maui.
But Marriott will have to be careful for now, as it’s hard to forecast the balance of business to leisure. “I do not, for a minute, believe that travel is permanently impaired,” Capuano said. “What I do think is that it may be harder and harder for us to tell you, a year or two from now, precisely the mix of our demand by segment.”
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