Marriott CEO Says Modest-Income Households Show Increasing Interest in Travel

It’s not just the well-heeled who want to explore the world.

During an appearance from Japan on the CNBC show Squawk Box, Marriott International’s top executive said the global hotel company is seeing an increased demand from modest-income households. And to meet that demand, the hotel company is introducing more mid-scale properties around the world.

Marriott CEO and President Anthony Capuano explained during his appearance on the show that there’s an increasing “bifurcation of the consumer.”

“In the high-income households, you continue to see this almost insatiable appetite for travel and a great deal of price elasticity,” Capuano explained.

“So, if you look across all quality tiers where we operate, we saw the strongest growth rate in the luxury tier, where we have a clear leadership position," Capuano added.

At the same time however, Marriott is also experiencing significant growth among more cost-conscious travelers.

“At the other end of the spectrum, in more modest income households, there’s still a strong appetite for travel, but there is a real desire to find a value alternative,” Capuano said. “And it’s that desire that’s really driving our entry into the mid-scale tier on a global basis.”

Capuano said Marriott plans to continue to expand its mid-scale Four Points Flex by Sheraton properties to accommodate this growing demographic of modest-income travelers.

The hotel company CEO was visiting Japan this week to introduce Marriott’s first Four Points Flex by Sheraton in the country. The expansion of that brand is likely to continue, he said.

“We will continue to evaluate the applicability of our brands on a global basis, but the strategy right now for Europe and Asia pacific is to use this Four Points Flex platform,” said Capuano.

As Marriott’s website explains, Four Points Flex by Sheraton is a new brand that’s separate and distinct from the Four Points by Sherato brand.

Four Points Flex by Sheraton was created as a response to a growing guest segment demand for a simplified guest experience focused on the essentials and delivering value in convenient locations across Europe, Middle East, and Africa.

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