As the federal government closes U.S. borders to Europe, and President Donald Trump urges Americans to avoid traveling due to the spread of the coronavirus, the travel industry is facing unprecedented hardships.
Marriott International, the world’s largest hotel brand, is expecting to furlough “tens of thousands” of employees as it sees hotels closing around the world, Adweek confirms. The news was first reported today by the The Wall Street Journal.
The cuts will include everyone from general managers to housekeepers, but will not yet affect the corporate level. The employees won’t be given paid leave, although most will continue to receive health benefits.
Marriott said it plans on bringing back many of the furloughed employees when the coronavirus is contained.
“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,” said the brand in a statement. “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.”
Last week, Hilton withdrew its own 2020 financial outlook, citing “the evolving impact” of the coronavirus.
“It is times like these when the world needs our hospitality most, particularly in the communities that have been hit hardest by the outbreak,” said Hilton’s CEO Christopher Nassetta. “We believe that the potential negative impact will be greater than our previous estimate and have decided to withdraw our previously announced guidance.”
As confirmed cases in the U.S. continue to escalate, hotel search volume has plummeted, according to Koddi, a research marketing firm that aggregates data from online travel agencies and metasearch sites.
In Washington, the first state to confirm a coronavirus case in the U.S., hotel search dropped as low as 40% year over year. In New York, now the state with the most confirmed cases of the coronavirus according to the Centers for Disease Control and Prevention (CDC), hotel search volume has dropped more than 30%.
“You can see it was pacing to be a great year,” said Dillon Lockett, a spokesperson for Koddi. “As concerns domestically ramped up at the end of February, that [demand] fell pretty significantly almost immediately. Everything’s been in free fall since.”
According to Cowen Research, the research arm of the investment bank, hospitality and online travel could decline 65% year over year globally from March to June.
The Journal also reported that executives from Marriott, Hilton and other hospitality brands are expected to meet with President Trump today in Washington to discuss “the prospects of financial assistance,” in the coming weeks.
They’ll have to wait in line, as reports indicate the airline industry is also negotiating a bailout of more than $50 billion.