Marriott's corporate job cuts are a fresh reminder that a travel demand rebound is likely years away from ever hitting pre-pandemic performance levels.
The world’s largest hotel company is slated to significantly streamline its headcount next month at its global headquarters in Maryland.
Marriott plans to lay off 673 employees on October 23, according to a Work Adjustment and Retraining Notification filed earlier this month with the Maryland Department of Labor. The permanent job cuts impact roughly 17 percent of employees at the Bethesda, Maryland, headquarters, where Marriott employs about 4,000 people.
Marriott confirmed the pending layoffs Monday morning to Skift but declined to elaborate which departments would be impacted by the decision.
However, the company is also expecting to welcome back in late September a “significant number” of employees currently on furlough, Marriott spokesperson Connie Kim said.
Marriott furloughed tens of thousands of employees in March as a result of the coronavirus pandemic’s catastrophic impact on travel demand. The company’s CEO, Arne Sorenson, has repeatedly described the global health crisis as having a worse impact on the company than the Sept. 11 terrorist attacks and 2008 financial crisis combined.
But Sorenson has also maintained he does not think the impact of the crisis would leave lasting damage to the hotel industry or the kind of group business travel it relies on.
“Having been through three crises [the Gulf War, the Sept. 11 attacks, and the 2008 financial crisis] … In every one of those, we have heard people say we will not go back to travel the way we did before,” Sorenson said last month at a Cvent webinar. “I take that with a grain of salt. Not that there won’t be a change, but people yearn to be together.”
There is significantly less capital flowing into the hotel industry today than there was at the beginning of 2020 due to the pandemic and ensuing travel demand uncertainty.
Design and development teams are likely to field a brunt of staff reductions due to the hotel industry seeing a slowdown in new construction activity and renovations, said Sean Hennessey, a professor at New York University’s Jonathan M. Tisch Center of Hospitality.
But Marriott’s layoffs likely won’t stop at just those departments.
“Most of the companies in my experience will try to spread the reductions in staffing across the platform so that one department doesn’t feel like it’s being singled out or treated unfairly relative to others,” Hennessey added. “Everyone feels the pain.”
Marriott’s job cuts are the latest in a wave of layoffs, as the hotel industry settles into what many expect to be years of travel uncertainty.
Hyatt laid off 1,300 employees in May. Hilton eliminated 2,100 corporate roles — or about 22 percent of its corporate workforce — in June. Accor’s corporate belt-tightening includes laying off 1,000 employees and a potential sale of its Parisian headquarters.
MGM Resorts announced in late August plans to lay off 18,000 staffers across its gaming resorts, but those roles weren’t limited to corporate staff.
While Sorenson indicated revenue at Marriott’s China portfolio could return to pre-pandemic performance levels as early as next year, U.S. hotels aren’t expected to fully recover to 2019 revenue levels until 2024, according to hotel data provider STR.
[UPDATE: After publication, this story was updated to include analysis on what departments may be most impacted by Marriott’s layoffs at corporate headquarters.]
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Photo Credit: Marriott plans to lay off 17 percent of staff at its global headquarters in Maryland later this fall. Bernard Gagnon / Wikimedia