Marriott begins to furlough employees

Worldwide: Marriott International has announced it is starting to furlough what could be tens of thousands of employees as it closes hotels globally.

First reported by The Wall Street Journal, cuts will include staff members from general managers to housekeepers. 

Employees will not be given paid leave, but the majority will continue to receive health benefits.

The company employs around 130,000 people in the US. Worldwide, it manages nearly 2,000 properties and 560,000 rooms.

Combined with its franchises, Marriott has around 7,300 properties globally.

In a statement, Marriott said: “As travel restrictions and social distancing efforts around the world become more widespread, we are experiencing significant drops in demand at properties globally with an uncertain duration. We are adjusting global operations accordingly which has meant either reduction in hours or a temporary leave for many of our associates at our properties.”

The company intends to rehire many of the furloughed employees once the coronavirus is contained.

The news comes as STR reveals that US hotel occupancy rates fell 24.4 per cent to 53 per cent during the week 8-14 March 2020. 

“The questions we are hearing the most right now are around how far occupancy will drop and how long this will last. Through comparative analysis of the occupancy trends in China and Italy over the past weeks, we can with certainty say that we are not yet close to the bottom in the U.S,” said Jan Freitag, STR’s senior vice president of lodging insights.

Additional insights from Cleveland Research Company reveal that Marriott is seeing high cancellations for 1H20 with many “tentatively rebooking” for 2H20. No meaningful group cancellations have been reported for 2021.

Other cost-cutting measures implemented by Marriott involve deferring most brand standards (including delaying renovations for one year), making significant cuts to senior executive salaries, and “dramatically reducing” programmes that are reimbursed through hotels, in particular marketing.

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