The financial ramifications of the COVID-19 pandemic are worse than a combination of the 2009 financial crisis and the aftermath of the 9/11 terrorist attacks put together.
That is the bleak assessment of Marriott President and CEO Arne Sorenson, a pancreatic cancer survivor, in a video message to employees of the world’s largest hotel chain.
Sorenson revealed that business is down a staggering 75 percent as a result of the ripple effects of the coronavirus. He acknowledged that the negative economic impact is unprecedented for the 92-year-old company which has been destabilized by global travel restrictions and the resulting depressed demand for hotel accommodations.
“As a result, we have hundreds of hotels around the world that can’t operate without incurring substantial economic losses and risking permanently their ability to reopen once this gets behind us,” he explained.
Hundreds of Marriott hotels have already closed or planning to do so.
Although he mentioned some cost-cutting measures, Sorenson noted that more details and contingency plans would be forthcoming for its workforce. However, according to media accounts, effective in April, Marriott plans to furlough two-thirds of thousands of its employees both at its Bethesda, Md., corporate headquarters as well as corporate employees worldwide. U.S. employees stand to receive 20 percent of their pay during a 90-day furlough, which apparently will include about 117,000 employees (or associates).
For Marriott properties that are still open, Sorenson explained that those locations are shutting down restaurants, reducing staff, and closing floors. Marriott has 7,300 locations around the world under the Marriott name and as well as other brands.
The CEO added that he and Executive Chairman Bill Marriott will decline any pay for the rest of the year and that Sorenson’s inner circle will see their pay cut by 50 percent. Rank-and-file workers obviously face far vastly greater challenges than those who work in the executive suite.
A message to Marriott International associates from President and CEO Arne Sorenson. pic.twitter.com/OwsF14TZgb
— Marriott International (@MarriottIntl) March 19, 2020
Legislation working its way through Congress aims to provide a bailout for the hotel industry, among other sectors. As reported by BizPacReview earlier today and as widely condemned, however, House Speaker Nancy Pelosi, the San Francisco Democrat, sabotaged an agreement between Republicans and Democrats on a COVID-19 stimulus package to benefit individuals and industry.
Pelosi prepares her own draft after halting Senate’s attempt to get emergency bill passed https://t.co/wBWzqEgaIw pic.twitter.com/0ISGyjLR1U
— Conservative News (@BIZPACReview) March 23, 2020
A visibly emotional Sorenson concluded his video message with a note of encouragement. “I wish you good health and a sense of optimism. Together we can and we will overcome this. And we’ll thrive once again.”
Not everyone was impressed with Sorenson’s heartfelt message, especially for non-furloughed Marriott employees deemed ineligible for immediate unemployment benefits.
https://twitter.com/TheDanielaNoemi/status/1240387678060896257
Let's get this straight:
Marriott, a hotel company that last year paid their CEO $12.9 million, made $21 billion in profits, all while only paying a 13% tax rate—cut workers' hours to 0 so that they can't earn a wage OR claim unemployment benefits?
That should be criminal.
— Patriotic Millionaires (@PatrioticMills) March 18, 2020
On a more hopeful development, the Bloomberg news agency is reporting that CVS plans to hire furloughed Marriott workers as part of adding 50,000 full-time, part-time, and temporary workers to its outlets.
CVS plans to hire 50,000 people in full-time, part-time and temporary jobs to tackle surging demand, including furloughed workers from Marriott, Hilton & others. http.s://www.bloomberg.com/news/articles/2020-03-23/cvs-health-to-hire-50-000-in-response-to-coronavirus-demand
— Lisa Abramowicz (@lisaabramowicz1) March 23, 2020
President Trump more than hinted on Twitter this morning that America needs to get back to work to get the country out of its downward spiral and that some reasonable decisions need to be made in this regard at the end of the 15-day social distancing period.
As economy teeters, Trump to evaluate restrictions: ‘We cannot let the cure be worse than the problem’ https://t.co/nEzwj8GPpN
— Conservative News (@BIZPACReview) March 23, 2020
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Robert Jonathan is a staff writer for BizPac Review. He is a longtime writer/editor for news aggregation websites and has also developed content in the legal and financial publishing sectors as well as for online education. He earned a Juris Doctorate from the University of Connecticut School of Law, “a law school the basketball teams can be proud of.”
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