Marriott Playbook: Cut Costs, Push Midscale, and Boost Loyalty

04.11.2024 - 17:35 / skift.com / Anthony Capuano / Sean Oneill / Marriott International

Marriott International unveiled plans Monday for its biggest organizational overhaul in a decade, targeting up to $90 million in annual cost savings as the hotel giant repositions itself after doubling in size over the past decade.

The world’s largest hotel company will implement cuts of between $80 and $90 million a year, starting in 2025.

The effort is part of what Anthony Capuano, president and CEO, called an “enterprise-wide process to enhance effectiveness and efficiency.” The restructuring aims to help owners and franchisees “operate even more nimbly.”

During an earnings call, the Bethesda, Maryland-based company said it’s targeting about $100 million in restructuring charges in the fourth quarter of 2024.

“The company is quite different than the last time we looked holistically at the organization,” Capuano said. “We’ve more than doubled in size over the last decade.”

“With meaningful growth opportunities around the world across our more than 30 brands, we’re confident these efforts will make us even more competitive,” CFO Kathleen Oberg said.

With its newly branded City Express by Marriott chain, Marriott reported progress on its calculated move into the midscale hotel segment in North America. The company reported “extensive interest” from owners in this brand, with the first locations opening “within months.”

“Our progress in the midscale space around the world has been outstanding,” Capuano said.

Marriott’s interest comes as multiple hotel groups seek to capture a greater share of this high-growth market segment, fueled by rising demand from middle-class travelers.

Marriott International president and CEO Anthony Capuano spoke at the Skift Global Forum in New York City about the hospitality sector’s current state and future direction through the lens of the world’s largest hotelier.

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