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Marriott warns of ‘significant’ further cutbacks

The 115,000 employees currently furloughed will remain out of work until the fall, according to the innkeeper. It’s now offering U.S. employees an exit deal.
Marriott Chicago
Photo courtesy of Marriott

Warning that the lodging industry is unlikely to see a recovery until 2021, Marriott International alerted staff on Wednesday that the layoffs and reductions in hours adopted in April because of COVID-19 will likely extend through October 2, with “significant” additional cutbacks anticipated at the corporate level.

The hotel giant indicated it will offer exit packages to property-level and other employees in the United States who wish to leave the company at this time and “pursue other opportunities.”

“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,” Marriott said in its announcement.

The alert to staff and investors is a reflection of the lodging sector’s critical problems from social distancing and its effect on travel. Last week, the American Hotel & Lodging Association (AH&LA) issued a statement whose headline began, “Hotel industry on brink of collapse.”

The statement detailed a Roadmap to Recovery that calls for a packet of emergency measures from Congress, including temporary tax credits that will encourage businesses to permit travel again. The rescue plan also calls for extending tax credits for the purchase of personal protective equipment (PPE) and providing some sort of mortgage relief for hotels facing default.

“The hospitality industry is in a fight for survival,” Chip Rogers, CEO of the AH&LA, said in the statement. “We are urging Congress to do even more to help the hotel industry so that our small business hotel operators can keep the lights on and retain and rehire employees.”

Marriott announced in mid-March that it was furloughing about two-thirds of its 174,000 employees worldwide—some 115,000 individuals—because of the coronavirus crisis. The company ended the first quarter with $12.23 billion in debt and $1.76 billion in cash.

Marriott is one of the world’s largest innkeepers, with 7,400 lodging properties across 30 brands in 134 countries. Its full-service properties typically include multiple restaurants, as well as extensive banquet and catering operations.

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