India's an extraordinary market. I would be stunned if all of our competitors were not doing everything in their power to try to catch us and the lead that we enjoy here.
How's your journey been in India?
We've got about 230 hotels open in India today across nearly 80 cities, but behind that there's another 200 hotels in the pipeline. There is overtourism certainly, but I think it's more an issue of under promotion.
So the year started off with some disturbing geopolitical developments. Even now the West Asia conflict sees no signs of ending.
Demand was still down 40% across the region.
We have Anthony Capuano, president and CEO of Marriott International at the Economic Times World Leaders Forum. Anthony, welcome to the podcast.
In an interview to ETN 2023, you had said that India is one of the bright shining spots in your global recovery. So from your recovery through the global pandemic to now, how's your journey been in India?
Amazing. And I think our momentum is accelerating. We've had, we continue to be the largest lodging company in the country as measured by rooms. The company just celebrated the opening of its 10,000th hotel and we chose a project here in India, the JW in Ranthambore. We are making a significant investment in technology. We created a tech accelerator in Hyderabad. And we just launched our new brand, Series by Marriott, here in India as well. And maybe a little atypical given our asset light model, we actually made a minority equity investment in that business as well. So really across the portfolio, lots of momentum.
Sure. And Marriott International's top line crossed $1.5 billion dollars India in 2025. From 1 billion dollars in 2023. The chain has also said that India could overtake Mexico to become the third largest market. So, how has this year been so far in India? And do you have any top line targets for India for the next 2 to 3 years?
So, your data is spot on. If anything, we see an acceleration and anticipate an acceleration in that revenue growth. We've got about 230 hotels open in India today across nearly 80 cities. But behind that, there's another 200 hotels in the pipeline. And so, we anticipate growing quite dramatically. Next year is Marriott's centennial year. We'll celebrate 100 years since our founding. And my guess is if everything goes the way we hope, we'll open in our 100th city in India during our centennial year. Absolutely.
How has the US fared so far? And did FIFA aid the business? Because you have spoken to us previously about the might of Indian origin hoteliers in the US. And we ended up speaking to them recently and they said that the interest for FIFA was fairly subdued due to stricter immigration checks, high ticket prices. So, your take on FIFA.
Yeah, our experience, thankfully, was quite different. In the run-up to the tournament, there was lots of negative narrative out in the media about high numbers of cancellations, disappointment around bookings. But we had looked at prior major global sporting events. And many of those trends were typical because folks didn't know who was going to advance in the tournament, whether it would be countries that had rabid fans traveling. And so, during our second quarter earnings call, we were thrilled to say not only did the impact on our business meet our expectations, it actually outperformed. Going into the tournament, we had said we expected about 40 basis points of RevPAR impact in the US, 35 basis points globally. We ended up being closer to 50 basis points in the US and 40 basis points globally. So, it exceeded our expectations both quantitatively and qualitatively.
Sure. So, the year started off with some disturbing geopolitical developments. Even now, the West Asia conflict sees no signs of ending. How big a dent could this cause to the full year financial performance for the chain and how's H1 been so far?
Yeah, it's just to ground you. The region, the Middle East region, represents about 3% of our global rooms inventory, about 6% of our global pipeline, and about 3% of our global fees. To be sure, we've seen weakness in Q2. It was a little better incrementally than we had forecast, but demand was still down 40% across the region. So, quite impactful for that region just because of our scale, less impactful on a global basis. There was some ripple effect and some of that ripple effect was felt here in India, also in markets like the Maldives that at the time had relied quite heavily on the Middle Eastern air carriers. But, our team's done a terrific job pivoting towards more domestic demand. And while we saw a bit of weakness in March, we saw it ramp right back up through the second quarter.
That's what we saw in India as well. I think the domestic demand really pushed up the results and the numbers for the chains in the first quarter year.
Yeah, and in fact, in the second quarter here in India, we saw RevPAR, which is our most important metric, grow by almost 12%.
Sure. So, are inflationary pressures pushing up utility, maintenance, and labor costs across key markets? What's our take on that?
They are. Among the biggest priorities we have on a global basis. As you know, we're an asset light model. And so the financial success of our owner community is critical. Their success is our success and vice versa. And coming out of the pandemic, while we've seen good recovery on top line revenue, during the pandemic expenses continued to grow. And so you've seen margin pressure. And we're doing everything we can to drive enhanced top line performance. Look at every expense line in the P&L statement. Look at affiliation costs with Marriott. In fact, last year, we lowered the charge out rate for the Bonvoy loyalty program by 5% and we'll continue to do everything in our power to try and return the margins that our owners experienced pre-pandemic.
Sure. So, there's always this constant chatter about AI. Now, I cannot talk not talk to you about AI.
I'm impressed that you waited this long. It's usually the first question.
