Marriott International CEO Arne Sorenson has expressed concern that the company’s quick response to the coronavirus crisis in standing down tens of thousands of workers may come back to bite them when a recovery occurs.
“I am worried we are cutting so deeply that the rebuilding process will be more challenging than we anticipated and maybe, to some extent, that we might regret having moved as aggressively as we’ve moved,” Sorenson said.
Marriott has 1.4 million rooms across the world, but evaporating demand forced it to begin shutting down hotels last week.
Sorenson conceded that some hotels may never re-open, saying the current crisis is worse than the worst quarter ever in the company’s business, which saw roughly a 25 per cent decline on average in hotel revenue globally.
“In terms of our business, COVID-19 is like nothing we’ve ever seen before,” Sorenson said.
The steps Marriott is taking to stay in business include standing down perhaps tens of thousands of employees for at least 60-90 days; suspended all non-essential travel for employees; and suspending brand marketing and advertising.
Sorenson and executive chairman Bill Marriott Jr. will receive no salary for the rest of 2020, while the Marriott International executive team will take 50 per cent pay cuts.
In one glimmer of hope, Sorenson said “we are seeing some early signs of lodging demand beginning to return” in China, which saw a 90 per cent decline in its business at the height of the coronavirus pandemic.
To add to his worries, Sorenson is also battling pancreatic cancer.
“I feel good and my team and I are 100 per cent focused on overcoming the common crisis we face,” Sorenson said. “Together we can and will overcome this, and we’ll thrive once again.”