Hospitality sector sees loss of thousands of workers

June 24, 2020 | 17:24
The spread of COVID-19 worldwide has ruined the global tourism industry, resulting in a series of temporary or permanent shutdowns, flights cuts, and limited travel options. The situation has also caused hotel businesses such as Hilton Hotels and many of its rivals, including Marriott and Hyatt Hotels, to be severely affected.
1497p24 hospitality sector sees loss of thousands of workers
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Hilton Hotels has just announced that they will let go of 2,100 employees worldwide, equivalent to 22 per cent of the group’s workforce.

At the end of March, Hilton announced a temporary salary cut for leaders. Hilton chief executive Christopher Nassetta confirmed that the group had never witnessed a global crisis like this during its 100 years of development. “Hospitality will always be a business of people serving people, which is why I am devastated that to protect our business, we have been forced to take actions that directly impact our team members,” Nassetta said.

Marriott, the largest hotel chain in the world, has also released a number of employees since March. Marriott representatives stated that the effect of the pandemic on business operations is much more serious than both the terrorist attacks on the United States in 2001, and the 2008 financial crisis combined.

Last month, Hyatt announced the termination of contracts with 1,300 employees worldwide as part of a restructuring plan. “Due to the historic drop in travel demand and the expected slow pace of recovery, Hyatt has made the extremely difficult decision to implement layoffs and restructure roles across its global corporate functions, beginning June 1,” the company said on its website.

Two-thirds of Hyatt’s workforce also received unpaid leave or salary cuts in March to cope with the severe situation. Hyatt said affected employees will be eligible for severance pay, outplacement services, and benefits in line with their years of service.

The pandemic has also affected more than 200,000 employees of French hospitality group Accor, when the brand was forced to close more than 3,000 of its 5,000 hotels in April.

According to The World Travel & Tourism Council in March, 75 million jobs were at risk in the travel and tourism sector because of travel restrictions and other measures put in place to stop the spread of the pandemic.

A report by the Association of Hotels-Motels and the US Tourism Association also shows that the global health crisis has blown $30 billion in revenue of all hotels across the US. However, the situation began to show signs of improvement when the entertainment, tourism. and hotel industries created 2.5 million jobs in May, after cutting 7.7 million jobs in April.

Many tourism and hotel experts expressed optimism about the strong revival of the hotels in the future as the tourism industry begins to show signs of recovery. And although there are plans to lay off nearly 1,900 employees, equivalent to 25 per cent of the company, Airbnb CEO Brian Chesky believes that while tourism may be halted, it will definitely return.

By Thai An

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