Marriott Extends Employee Furloughs Into the Fall

The hospitality brand won't bring back workers until Oct. 2

marriott hotel
The hospitality company said its corporate employees in Bethesda, Md., would be most directly affected by future layoffs. Marriott
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Marriott, the world’s largest hospitality brand, has extended furloughs that began in April with the outbreak of Covid-19 through the summer, until Oct. 2.

“The Covid-19 pandemic is having a more severe and sustained financial impact on Marriott’s business than 9/11 and the 2008 financial crisis combined,” according to a company statement. “Today, Marriott informed its associates that the company will need to implement additional measures in light of the increasing likelihood that it will be some time before lodging demand and RevPAR [revenue per available room] levels recover.”

The furloughs and reduced work schedules are primarily for what the company calls “above-property” associates, including at Marriott’s headquarters in Bethesda, Md. So far, the company has furloughed “tens of thousands” of employees.

According to the American Hotel & Lodging Association, at least 70% of hotel employees nationwide have either been laid off or furloughed, while more than 8 in 10 rooms sit vacant.

The company had been expected to be the main sponsor of the 2020 NFL draft, which set records for viewership despite going virtual, but dropped out and was replaced by Lowe’s Home Improvement.

Although first-quarter earnings weren’t completely dire, executives in the hospitality industry cautioned that the worst is yet to come. While it still turned a modest profit, Marriott saw RevPAR fall by 90% in April. So did Hilton.

“Given the company’s expectation that prior levels of business will not return until beyond 2021, the company anticipates a significant number of above-property position eliminations later this year,” Marriott said in a statement. “The company is not able, at this time, to predict how many associates will be affected by these separations or any resulting charges or cost savings.”

This fall may be grim for the travel industry. Airlines agreed not to lay off any employees until Sept. 30 as a condition of accepting federal aid. Come October, airlines are expected to lay off a substantial amount of their workforce to match the drop-off in travel demand.

Marriott CEO Arne Sorenson is expected to speak publicly at a Goldman Sachs conference next Monday.

@RyanBarwick Ryan is a brand reporter covering travel, mobility and sports marketing.
Publish date: May 27, 2020 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT