Marriott extends furloughs to corporate employees

The hospitality giant is looking to furlough about two-thirds of its 4,000 corporate employees at the company’s Bethesda, Md., headquarters. Photo credit: Google Street View

Days after announcing that the company was furloughing hotel employees and cutting the salaries of its leadership team, Marriott International is now looking to furlough thousands of corporate employees at its headquarters and other cities around the world, according to a report in The Wall Street Journal.

A spokesperson told the paper the hospitality giant would furlough about two-thirds of its 4,000 corporate employees at the company’s Bethesda, Md., headquarters as well as an estimated two-thirds of its corporate staff abroad.

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The new round of furloughs are poised to begin early next month to last between 60 and 90 days. During that period, furloughed U.S. corporate employees will receive 20 percent of their salary, which can be put toward health care and other costs, the spokesperson told the paper. Corporate employees who stay on reportedly are subject to a 20 percent decrease in pay and reduced work weeks.

 Downward Trend

The U.S. hotel industry reported negative year-over-year results in the three key performance metrics during the week of March 8-14, according to the latest data from STR.

In comparison with the week of March 10-16, 2019, the industry recorded a 24.4 percent drop in occupancy to 53.0 percent, a 10.7 percent decline in average daily rate to $120.30 and a 32.5 percent decrease in revenue per available room to $63.74 Performance declines were uniform across chain scales, classes and location types.

“To no surprise, the hurt continued and intensified for hotels around the country,” said Jan Freitag, STR’s senior VP of lodging insights. “The performance declines were especially pronounced in hotels that cater to meetings and group business, which is a reflection of the latest batch of event cancellations and government guidance to restrict the size of gatherings.

“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. However, the timeline for that decline and the eventual recovery are much tougher to predict because there is still so much uncertainty around the COVID-19 case numbers in the U.S. and how serious citizens are when practicing social distancing. China and Italy saw a more abrupt decline in occupancy because of stricter lockdowns. That will dictate the speed of recovery.”

Each of STR's top 25 markets registered double-digit occupancy and RevPAR decreases. ADR also was down in each market.