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Anticipating long downturn, Marriott plans next steps

Amended credit card agreements provided Marriott with $920 million of cash earlier this month. Photo credit: Marriott International (Tucson Marriott University Park)

After a Q1 that was dramatically impacted by the COVID‐19 global pandemic and efforts to contain it, Marriott International announced an update to the company’s global workforce on the continuing impact of the pandemic on its business.

The outbreak is having a more severe and sustained financial impact on Marriott’s business than 9/11 and the 2008 financial crisis combined, the company said in a statement. While Marriott sought to reduce costs and improve its liquidity in the face of worldwide revenue per available room falling approximately 90 percent in April, the company is implementing additional cost-cutting measures in preparation for an extended downturn. Specifically, the company informed above-property associates in the U.S. that furloughs and reduced work-week schedules that began in April will be extended through at least Oct. 2. 

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Marriott also is rolling out a voluntary transition program for on-property and above-property associates in the U.S. who wish to leave the company to pursue other opportunities. Similar voluntary programs are being considered in other parts of the world. 

Given the company’s expectation that previous levels of business will not return until beyond 2021, the company anticipates a significant number of above-property position eliminations later this year. 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.

Earlier this month, senior executive Dave Grissen announced plans to step down from his position as group president, the Americas, toward the end of 2020 and retire from Marriott in the first quarter of 2021, after 36 years with the company.