Marriott International is beginning to furlough tens of thousands of employees as it plans to increase its hotel closings around the world in light of the coronavirus outbreak, The Wall Street Journal reported.
The newspaper reported that the company began to shut down some of its managed properties last week and will make additional closures this week. Marriott employs approximately 130,000 people in the United States and has about 7,300 hotels worldwide.
"As travel restrictions and social distancing efforts around the world become more widespread, we are experiencing significant drops in demand at properties globally with an uncertain duration," a Marriott spokesperson emailed BTN. "We are adjusting global operations accordingly which has meant either reduction in hours or a temporary leave for many of our associates at our properties. Our associates will keep their health benefits during this difficult period and continue to be eligible for company- paid free short-term disability that provides income protection should they get sick. We are working quickly to mitigate the impact to our business while also focusing on assisting our associates, our guests and our owners. While the ultimate impact is difficult to predict at this time given the fluidity of the situation, we remain confident in our long-term prospects."
During its February earnings call, at a time when it appeared the virus still mainly was affecting the Asia/Pacific market, the company said that about 90 of its 375 properties across Greater China had been closed, and that February's revenue per available room in China had declined nearly 90 percent compared with the same period last year.
Marriott also has relaxed its cancellation policies for hotels globally.
During the week of March 1-7, 2020, U.S. hotel occupancy was down 7.3 percent compared with March 3-9, 2019, to 61.8 percent, according to STR. Average daily rate was down 4.6 percent to $126.01, and revenue per available room was down 11.6 percent to $77.82.
"We expect double-digit RevPAR declines for the foreseeable future," said STR SVP Jan Freitag on a Monday evening webinar.
Executives from several hotel companies, including Best Western, Choice Hotels, Hilton Worldwide, Hyatt Hotels Corp., InterContinental Hotels Group, Marriott and others are scheduled to meet with White House officials and members of Congress Tuesday, according to a release from the American Hotel & Lodging Association.
(Update, March 17): This report has been updated with Marriott's statement.