So you think you’ve had a rollercoaster year? Consider the tumultuous times of hospitality leader Arne Sorenson, the president and CEO of Marriott International.
In early 2020, the bottom began to fall out of travel, taking with it the fortunes and prospects of the hospitality industry. Sorenson felt forced to make the unprecedented move of furloughing the majority of the executive, managerial, and support staff (“above-property associates” in the industry parlance) in the very building where he works (Marriott headquarters in Bethesda, Maryland), as well as to make other painful cuts and related decisions across the company.
Micah Solomon had a chance to catch up with Sorenson this week to get his read on a variety of issues. Here’s his take.
Travelers who resist wearing masks are risking the recovery of the hospitality industry.
Sorenson refers to the “overwhelming science” that shows masks to be essential for protecting employees and individual guests at hotels and resort properties and goes on to make the point that they’re also essential for guest comfort–and therefore for the continued recovery of the entire industry.
This point is one that’s often overlooked: With some guests continuing to resist the mask-wearing imperative, whether because they feel concerns about COVID-19 are overblown, or they’re standing on their feelings of independence, or they dislike the aesthetics of a mask on their face in a leisure environment, the problem, says Sorenson, is that in the very same hotel, “we know from the feedback received that there are many [mask-wearing] guests who feel jeopardized by the conduct of their fellow guests and will not travel again until they believe their stay will be safer.”
Marriott’s experience reopening in China is an encouraging bellwether.
At the nadir, Marriott closed a staggering 90 hotels in China; today, every single hotel has reopened. Sorenson takes “great pride” in this. “We are not an industry that is designed to be closed; we’re designed to be open 24 hours a day.” Even more encouraging is that occupancy is returning, reaching 40 percent in May. “While in normal times it would be hard to imagine celebrating that number, it is significant to achieve that [number] coming from a near standstill; it’s giving us encouragement and a view into the path forward.” Instructive but not surprising, Marriott’s Chinese operation is seeing the return of domestic travel first: 80 percent of the guests now staying in hotels in China are local Chinese, with millennials being among the first to return to travel. “We are watching the China recovery closely,” says Sorenson, “and using it to help inform our approach in other markets.”
The corporate furloughs carried out in April at Marriott headquarters will be extended until October, and may ultimately be coupled with outright position eliminations.
The crisis is a small-business problem, even within the Marriott family.
Although Marriott is the largest publicly traded hotel company in the world, “many of our owner and franchise partners are small business owners facing their own unique challenges, to which we need to remain responsive.” In the face of the near-term cashflow “challenges” (as Sorenson gently puts it) faced by individual hotel operators, Sorenson says that Marriott has reduced costs and deferred its requirements that they participate in investment-intensive initiatives. “We are living in complicated and challenging times. Working together, we will come up with new and creative ways to move our industry forward.”
This is the worst crisis the industry has faced–but experience gleaned from prior challenges is helpful in its navigation.
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