The company began shutting down some of its managed properties last week, a Marriott spokeswoman said. The employees at these properties won’t be paid while on furlough but the bulk will continue to receive health-care benefits that are ultimately paid by the hotel owner, she added, which for the vast majority of the brand’s properties isn’t Marriott. Marriott is also trimming staff through furloughs at properties that are still operating.
The staff reductions include everyone from general managers to housekeepers. The Marriott spokeswoman said there has been no layoffs or furloughs at the corporate level but those are “under discussion.”
Marriott said it expected to bring back as many of the furloughed employees as possible when the novel coronavirus is contained and business returns. In the U.S., about 130,000 employees are on the Marriott payroll, the company said.
Marriott’s actions come during what hotel executives and owners say is the toughest lodging environment they have ever seen, as the coronavirus outbreak has led to widespread travel cancellations and government-ordered travel restrictions around the world.
Occupancy levels at Marriott’s and other hotels throughout the U.S. have plummeted to 20% or lower, and many hotels are in single digits, hotel owners say. As a result, hundreds of hotels across the U.S. are expected to close their doors Tuesday or later this week, and many have already started the process by giving employees notice, owners said.
For Marriott, which has 30 brands and about 7,300 properties, the move was a stunning reversal after starting the year strong. In January, the company said that it had 515,000 rooms in its global pipeline—its highest number ever —after signing 815 new agreements last year.
The furloughs come as top hotel executives from Marriott, Hilton Worldwide Holdings Inc. and other lodging companies are scheduled to meet with President Trump at the White House on Tuesday to discuss a government response, including the prospect of financial assistance, according to people familiar with the matter.