UPDATED: How Hotel Brands Are Responding to COVID-19

Coronavirus impact on economy

Leading hotel brands have responded to the COVID-19 pandemic in various ways—from temporarily suspending brand standards and cutting franchise fees to opening their services to front-line medical staff. Below are the ways in which brands are responding during this crisis. This list is being updated as new information is released.

Marriott 

On March 18, Marriott released a business update and, a day later, a video on Twitter of its President and CEO Arne Sorenson addressing employees. Sorenson said that the number of Marriott associates infected with COVID-19 is low, but the financial impact is more severe than 9/11 and the 2008 financial crisis combined. “The worst quarter we had in those earlier crises saw a roughly 25 percent decline in hotel revenues on average across the globe. In this case, which began in Greater China in January, we quickly saw a 90 percent decline in business in China.” Sorenson added that in most markets, business is running 75 percent below normal levels. 

At the property level, open hotels are taking measures such as closing F&B outlets, reducing staff, and closing entire floors or properties, depending on the local circumstances. The company has also temporarily deferred most brand standards for owners and franchisees, including delaying renovations due in 2020 by one year, deferring required furniture, fixtures, and equipment (FF&E) funding, and suspending brand standard audits.

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At the corporate level, the company has suspended all non-essential travel and spending, new hires outside of “mission-critical positions,” hotel initiatives for 2020, and brand marketing. Additionally, Sorenson said that he and Bill Marriott would not be taking a salary for the balance of the year, and executives would take a 50 percent cut in pay. The company is requiring temporary leaves in North America and shortening work weeks around the world. Marriott estimates these measures will reduce 2020 corporate general and administrative costs by at least $140 million.

Hilton 

On March 17 in a meeting between hotel CEOs and President Trump, Hilton CEO Chris Nassetta said that the bulk of Hilton hotels in major cities are closing and that occupancy would likely decline to 10-15 percent around the world. “If you look at the major cities around the United States, they’re running in the single digits, which means, for the first time in 100 years—Hilton has been around 100 years—we’ve never closed a hotel that wasn’t going to be demolished for rebuilding. The bulk of our hotels in the major cities are closing, as we speak,” Nassetta said.

Hilton has created a tool to connect furloughed workers with short-term jobs created by the current COVID-19 crisis. Hilton Workforce Resource Center lists temporary jobs at companies like Albertsons, Amazon, CVS, Lidl, Sunrise Senior Living, and Walgreens. In a news release, the company said it plans to expand the program globally and “welcome these team members back when travel resumes.”

Hyatt

On March 24, Hyatt released a statement on the actions the company is taking at the corporate level, which include suspending operations at some hotels, temporary furloughs, and pay and work reductions from April 1 through May 31. Corporate employees will still be eligible for healthcare and other benefits and can file for unemployment, the company said, adding that Hyatt is working to protect and fund full benefit coverage, including employee premiums, for furloughed workers on a company healthcare plan for up to two months. The company is asking temporarily furloughed colleagues to use PTO days to cover pay. 

Hyatt also reported that the company is setting up a global Hyatt Care Fund, with initial contributions coming from leadership salary reductions. President and CEO Mark Hoplamazian and Chairman of the Board Tom Pritzker are forgoing their full salaries, and the senior leadership team is taking a 50 percent pay cut through the end of May. “The proceeds of this fund will be distributed to those colleagues with the most pressing financial needs due to loss of income,” the company reported. 

Choice 

On March 17,  Choice released an update of its 2020 outlook withdrawing its previously issued guidance on February 18. That same day, Pat Pacious, president and CEO of Choice Hotels, met with President Trump along with other hotel CEOs at the White House to advocate for expanding SBA lending during the COVID-19 crisis. Pacious told President Trump that 90 percent of Choice Hotels are SBA eligible, and hotel owners are focused on what to do with employees and how to pay their mortgage when operating at zero occupancy. “It is this question of employee retention and liquidity so that you get through this period,” Pacious said. 

Wyndham

On March 24, Wyndham announced that franchisees may defer fees accrued in March, April, and May 2020 until September 1, 2020. Wyndham hotels that were restricted from the CRS in February or March will be reconnected without a fee until September 30, 2020, and there will not be any new CRS restrictions due to non-payment until September 1, 2020. Wyndham is deferring all brand standards except health and safety related standards, as well as property improvement plans until January 1, 2021.

For the months of April and May 2020, Wyndham is waiving 50 percent of SynXis PMS fees, 100 percent of RMS fees, and 100 percent of MOP fees. For the months of March, April, and May 2020, the Wyndham Rewards enrollment requirements and related fees are waived, as well as Quality Assurance and Wyndham Quality Circle inspections and fees. Through June 1, 2020, Wyndham is giving general managers additional time to complete its Hospitality Management Program and is waiving fees for rescheduling. In addition, hotels may still offer breakfasts that are not buffet-style and follow the sanitation guidelines from the CDC and WHO. Hotels may offer pre-assembled breakfast bags at the front desk during breakfast hours.

On March 18, Wyndham released an update on the company’s response to COVID-19, detailing its updated cancellation policies and temporary policies for its Wyndham Rewards loyalty program as well as its general response to the pandemic. “Due to the current situation with coronavirus, our hotels are implementing new processes to protect the safety of our guests and team members,” the company said in the statement. “This may result in a reduction in certain services and amenities that are normally available at our hotels.”

IHG

On March 20, IHG released a business update. “Demand for hotels is currently at the lowest levels we’ve ever seen,” said Keith Barr, CEO of IHG. The company reported that global RevPAR decreased 6 percent in January and February, with flat U.S. performance offset by a nearly 90 percent decline in Greater China in February. “During March, given the measures adopted by governments around the world to restrict travel and social contact, we are anticipating Global RevPAR declines of around 60 percent, with steeper declines in those markets most impacted by restrictions. Cancellation activity for April and May, and current booking trends, indicate continued challenging conditions,” Barr said. 

The company’s actions to reduce cost include reducing salary and incentives, including decreases for board and Executive Committee members, that will decrease fee business costs by $150 million. Additionally, the company is reducing marketing spend and containing costs across its owned, leased, and managed properties.

For owners, IHG is delaying renovations and relaxing brand standards. 

Best Western

On March 19, Best Western Hotels & Resorts (BWHR) released a news release on its response to COVID-19, which includes: waiving half of hoteliers’ monthly fees and property revenue management fees; reducing Best Western Rewards (BWR) loyalty point fees charged to members by half without lowering points awarded to loyalty program participants; increasing hotel redemption compensation for BWR loyalty guest stays by 50 percent; and waiving in entirety BWHR co-op marketing fees. Additionally, the company reported that it is delaying certain fees until November and will offer program extensions to its members.

In addition, the company’s Board of Directors and Executive Team announced that they are voluntarily reducing their compensation by 20 percent.

Radisson Hotel Group

In a letter to guests shared on March 15, Federico J. González Tejera, president and CEO of Radisson Hospitality AB and chairman of Radisson Hotel Group’s Global Steering Committee, announced an updated global cancellation policy and extensions for loyalty members while outlining the steps the company is taking in response to this crisis, including increased cleaning and sanitizing frequency.

MGM Resorts 

On March 27, MGM Resorts announced the availability of approximately $3.9 billion in operating cash to support liquidity during its property closures and believes this will fund its current obligations for the foreseeable future. Additionally, MGM Resorts announced strong operational performance in January and February 2020, with its net income being up to $1.3 billion from $27 million in January and February 2019.

MGM Resorts announced on March 23 several initiatives to support those impacted economically during the COVID-19 pandemic, including a $1 million crisis and disaster relief pledge into an employee emergency grant fund and donating the equivalent of 400,000 meals across the United States.

The MGM Resorts Emergency Relief Fund provides employees and their immediate families with short-term relief in making payments or to meet obligations during unexpected hardships and emergencies. MGM Resorts’ $1 million pledge will provide expanded coverage for the fund to assist those impacted by the coronavirus, including: full-time employees, on-call employees, and those facing layoff, separation, or furlough.

After temporarily closing its properties across the country on March 16, MGM Resorts is working with local food banks to ensure all available fresh food from its resorts is safely and quickly donated to charitable organizations in several underserved areas, and has donated over 480,000 pounds of food so far. 

Red Roof

On March 24, Red Roof announced the launched the Student Support Program to help students displaced as a result of college campus closures in response to COVID-19. The Support Program provides students with a 30 percent discount per room for stays at participating locations across the country including Red Roof Inn and Red Roof PLUS+ properties. Students looking for longer-term accommodation (seven days or more) will receive a $25 Amazon gift card to help purchase essential items.

Dream Hotel Group

On March 16, Dream Hotel Group released a statement on the COVID-19 pandemic, writing that the company is expanding policies around “cleanliness, frequency of cleaning, food safety, and associate well-being and support,” which might reduce services and amenities. Dream Hotel Group also modified its cancellation policies

GreenTree Hospitality Group

On March 26, GreenTree Hospitality Group released a statement waiving franchise and marketing fees for its U.S. franchise and management agreements. GreenTree had previously waived its reservation change fees and cancellation fees for its guests. Following CDC guidelines, GreenTree has implemented strict safety, hygiene, and housekeeping protocols.

Accor 

Accor announced on March 24 that it is opening its services to front-line medical staff, the French people fighting against the spread of COVID-19, and to the most vulnerable populations. Over 40 Accor hotels have opened a total of 1,000 to 2,000 hotel beds to homeless people throughout France. In collaboration with AP-HP university hospitality trust and its partners, Accor is also housing medical staff by offering accommodations near their jobs through the Coronavirus Emergency Desk Accor (CEDA) platform. Requests from public authorities and professional associations will also be centralized on the CEDA platform.

 


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