Marriott International has announced that the furloughs and reduced work week schedules which began in April are being extended through Oct. 2. In a statement issued May 27, the company said, “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.”
As a result the company warned its associates that it does not expect business levels to return until 2022 at the earliest. In its quarterly earnings call earlier this month, Marriott told analysts April’s revenue per available room, or RevPAR – a key metric in the hospitality industry – had plunged around 90 percent, with roughly a quarter of its properties closed worldwide at that time.
However, during the call CEO Arne Sorenson also sounded a cautious note of optimism. “The glimmer of good news is that overall, negative trends appear to have bottomed in most regions around the world,” he said, pointing to improving trends in Greater China. “We have seen examples of demand starting to come back in other areas of the world as well,” he added.
In addition to involuntary job cuts, Marriott said it is also rolling out a voluntary transition program for on-property and management associates in the US who may choose to leave the company to pursue other opportunities.
“Similar voluntary programs are being considered in other parts of the world,” the statement continued. “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.”
The company said at this time, it can’t predict how many associates will be affected by the separations or what charges or cost savings might result from the move.