Marriott CEO on shifting loyalty from transactional to emotional

Hotel loyalty programs often bring to mind points and - eventually - a free night in a member property.

But Anthony Capuano, CEO of Marriott International, believes the company’s loyalty platform can go far beyond traditional expectations.

“As I tour around the world and talk with our teams, one of the questions I'll often ask, 'If somebody comes to the desk and they're not a Bonvoy member, and you offer them the chance to enroll … Why was somebody not signing?’” Capuano said on stage at Skift Global Forum in New York City Wednesday.

And the response he often hears from Marriott team members: “Often the answer you get - particularly for younger or less frequent travelers - is ‘It's going to take me forever to earn enough points for a free stay. It's just not worth it.’”

Most hotel chains started their loyalty programs focused on what Capuano called “transactional” platforms, designed for travelers to earn and redeem points for stays. And while that’s still a pillar of a programs like Marriott Bonvoy, Capuano believes there’s a need for a broader view.

Ultimately, he said, he wants Marriott to evolve from “a more transactional relationship to a more emotional relationship” with its members, tying into the ever-expanding importance of experiences in travel decision-making.

Some of that is already happening at Marriott. Capuano gave an example that resulted from its recent joint effort with MGM resorts dubbed MGM Collections with Marriott Bonvoy, which is focused on crafting experiences “to transform a stay into a once-in-a-lifetime memory.”

“We had one of our members who … was able to program the entertainment and the music at the lake at Bellagio, and they had a beautiful dinner sitting lakeside. And I think there may have been a proposal involved,” Capuano said.

He listed other Bonvoy-enabled experiences, pointing to Sunday’s Emmy Awards in Los Angeles, during which a number of Bonvoy members were able to walk the red carpet. And to Marriott’s partnership with the National Football League as part of Marriott Bonvoy Moments, which offers curated experiences.

“Those are good indications of where we want to take the loyalty platform,” he said.

Part of what Capuano believes will be essential to bolstering the loyalty program is finding partnerships that will allow for more immediate gratification for members - especially those that believe it will take too long to build a points bank to redeem for stays.

He mentioned the company’s recently announced Starbucks partnership that allows travelers to link their Starbucks account to their Bonvoy account. Marriott Bonvoy also has partnerships with United, Norwegian, Carnival and Royal Caribbean cruise lines among others.

“If you talk to Peggy Roe, who's our chief customer officer, the phrase she uses is ‘You want the program to be stickier and stickier,’ … I think these partnerships allow us to achieve that,” said Capuano.

The company has been working on implementing partnerships to bolster its loyalty program since the beginning of Capuano’s tenure as CEO in 2021. In April of that year, the company partnered with Uber to give Bonvoy members the chance to earn additional Marriott points.

Even with the partnerships forged over the last few years, revamping loyalty has remained a frequent conversation topic for Marriott as it has updated its back-end systems.

Drew Pinto, executive vice president and chief revenue and technology officer for Marriott International, talked about that transition in a May interview with PhocusWire.

If you talk to Peggy Roe, who's our chief customer officer, the phrase she uses is ‘You want the program to be stickier and stickier,’ … I think these partnerships allow us to achieve that.

Anthony Capuano, Marriott

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The technology transformation has led to the replacement of three core systems for Marriott - for property management, central reservations and loyalty.

At the time of the May interview, the loyalty tech was still in early stages of developments. Bonvoy loyalty program members were on the rise and so were bookings with 22% more nights year over year in 2023.

“It’s really early days. We don't have vendors all figured out. Underneath it all, our loyalty platform runs on a system that's on a mainframe,” said Pinto in May. “It's many years old, it’s not cloud-based, it’s very inflexible. We're looking for capabilities, where we can customize the loyalty program, make it more personalized and be much more streamlined for our Bonvoy members.”

Pinto said at the time that the company has “great ideas” that it’s been able to bring to market. “We have many more that are on the shelf, and we're running into those limitations of just what an old mainframe can and can't do.”

As for the end goal with Bonvoy and its potential to drive growth for Marriott, Capuano said Wednesday there isn’t a cap on what he hopes to achieve - given Bonvoy is “such a powerful driver” as the company seeks to expose its wide range of brands. While there’s not a cap, he did share a point of inspiration.

Capuano visited South Korea and stayed at a JW Marriott a few months back. Before he arrived, he looked at the hotel’s operating statistics to find that everything was up except for Bonvoy enrollment rates. He asked the general manager why that might be - if there was an impediment to that progress, especially at a property that Capuano called “maybe the most beautiful” JW Marriott he’d seen.

“He got a big smile on his face. He said, ‘We're trying, but we're running a 97% Bonvoy penetration, so virtually everyone that shows up in the hotel is already a member,’” said Capuano. "And you know, in some ways that should be our aspiration.”