The late J. Willard Marriott, founder of the world’s largest hotel chain, built his empire by adhering to a few key principles, two of which are relentless hard work and a “put people first” culture. As Marriott’s granddaughter, Deborah Marriott Harrison, told Our Town DC:
Well, my grandparents and my father really set up our culture and our culture is a put people first culture. And my grandfather started it by making a sign he put over the kitchen doors in the Hot Shops that says, “If you take care of the employee, the employee will take care of the customer and the customer will come back again and again.” And we really pride ourselves in taking care of our associates.
In addition to his keystone business principles, Marriott was a proud American. “[Marriott’s] concern for others also extended to church, charity, and country. He…chaired two presidential inaugural committees and organized a special “Honor America Day” in 1970 at the request of then President Richard M. Nixon.”
Marriott’s son, J.W. “Bill” Marriott, Jr., served as CEO and Chairman of the Board of Marriott International for 40 years and kept his father’s legacy and the corporate culture intact. When he stepped down eight years ago Arne Sorenson, who’s not a part of the Marriott family, was appointed as CEO. Long-time customers have noted a decline in adherence to the founder’s principles during that time, but Sorenson’s actions over the last week in response to the coronavirus pandemic would never have been approved by J. Willard Marriott.
At the beginning of the week, in response to a steep decline in occupancy, the company announced that it would be temporarily shuttering hundreds of properties and furloughing tens of thousands of employees at those properties. The Wall Street Journal reported:
The employees at these properties won’t be paid while on furlough but the bulk will continue to receive health-care benefits that are ultimately paid by the hotel owner, she added, which for the vast majority of the brand’s properties isn’t Marriott. Marriott is also trimming staff through furloughs at properties that are still operating.
The staff reductions include everyone from general managers to housekeepers. The Marriott spokeswoman said there has been no layoffs or furloughs at the corporate level but those are “under discussion.”
Wow. While protecting corporate employees he chose to send home lower-level employees, who are more likely to live paycheck to paycheck, without pay, and to leave the hotel owner – who has no stream of income at the moment – holding the bag for health-care benefit costs.
And, some furloughed employees are finding out that since they’re still listed as employees (though scheduled for zero hours), they’re ineligible for unemployment benefits. Even if they are eligible for unemployment, they’ll still only be receiving a percentage of what their normal pay would be. Unlike other mass “layoff” situations, these employees can’t just go out and find another job.
That move isn’t sitting well with stockholders and customers who hold elite status in the chain’s loyalty program, Marriott Bonvoy.
— Thom Hartmann (@Thom_Hartmann) March 19, 2020
Marriott has not issued a statement as of press time explaining why they opted for a furlough instead of simply laying off employees until occupancy rebounds, the fact that employees can keep their health insurance as employees without having to go through some type of COBRA procedure could have something to do with it. If that’s the reason, why couldn’t Sorenson have found a way to pay these employees at least for a couple of weeks?
Thursday morning Sorenson posted a video to social media explaining that he and Marriott Jr. will not take a salary for the rest of 2020, that the executive team is taking a 50 percent pay cut, and that they have completely cut the advertising and corporate travel budgets for the time being.
A message to Marriott International associates from President and CEO Arne Sorenson. pic.twitter.com/OwsF14TZgb
— Marriott International (@MarriottIntl) March 19, 2020
Sorenson’s attempt at identifying with the company’s “highly valued associates” was piss-poor and fell flat.
I can tell you that I have never had a more difficult moment than this one. There is simply nothing worse than telling highly valued associates, people who are the very heart of this company, that their roles are being impacted by events completely outside of their control. I have never been more determined to see us through than I am at this moment.
Well, yes, these events impacting Marriott employees are completely outside of their control, but they’re not outside Sorenson’s control. Marriott International can’t print money, but Sorenson had better options than sending employees, who could have been exposed to coronavirus due to the public-facing nature of their jobs, home to their families without pay.
Before his weak attempt at compassion, Sorenson blindly parroted Beijing’s propaganda:
If there is any good news visible today, it is the signs of early recovery in greater China. China appears to have succeeded in reducing the spread of Covid-19 through strong counteractions. China is now bringing manufacturing back online and we are seeing some early signs of lodging demand begin to return. If this holds, it may bode well for the course of this epidemic in other parts of the world.
Oh, really? How much of the news coming out of China has turned out to be true relating to this pandemic? Not much.
Sorenson could have another reason for his apologetic stance toward the Chi-Comms. Since he took over as CEO eight years ago the company has been completely submissive to Beijing’s demands, but for that submission the company’s been handsomely rewarded:
Marriott International operates 375 hotels in China, and they’re outperforming their rivals based on some strategic partnerships within China and aggressive embrace of all things China at a corporate level:
Marriott International is faring better than its industry rivals in the increasingly important Chinese market, thanks to its Alibaba partnership and expanding market portfolio in the country.
While U.S. hotel chains Hyatt and Hilton, and Paris-based Accor reported declines in revenue per available room growth (RevPAR) in China in the second quarter, due to ongoing protests in Hong Kong and the nation’s trade war with the U.S., Marriott disclosed on Monday night positive results in both inbound and outbound Chinese travel. RevPAR in China for the chain rose 2.6 percent for the period ending June 30, .
The hotel chain is also encouraging properties around the world to have Chinese speakers on hand, along with Chinese cuisine and newspapers in “gateway cities,” where Chinese outbound travels are going.
A long-time Marriott customer and Republican insider (who didn’t wish to be named) believes Sorenson’s actions over the last week are on brand, telling RedState:
“Marriott ceased being the Marriott of the Marriott family years ago even though the company still drags out Mr. Marriott as board chairman from time-to-time. Arne Sorenson’s tenure has seen the company become woke political actors, cheat loyalists with a constantly changing loyalty program in which a free breakfast isn’t a free breakfast, focus on quantity over quality and, most egregiously, sell-out to communist China as reflected this morning when the CEO parrots Chinese propaganda vis-a-vis the Chinese virus.”
Indeed, Sorenson has publicly opposed Indiana’s Religious Freedom Restoration Act and North Carolina’s House Bill 2. He wrote President Trump a long letter after the 2016 election encouraging him to “govern collaboratively,” to “not pursue retribution against Hillary Clinton,” and asking that not deport illegal immigrants. He’s lobbied the federal government to drop sanctions against Cuba’s government so Marriott can tap into that tourist market (human rights be damned when one can make money), and spoke out against the so-called Muslim Ban, again, because it might be bad for business.
It’s fair to say that Sorenson isn’t a big fan of either Vice President Pence (former Governor of Indiana) or President Trump. Are those biases playing into his willingness to spread Beijing’s propaganda?
All of that attention on politics is taking Sorenson’s focus away from where it should be.
J. Willard Marriott believed that his company’s associates were the secret of his company’s success. From his biography:
A true hands-on manager, he thoroughly enjoyed visiting Marriott’s increasingly far-flung locations, as well as spending time with the ever-growing ranks of associates who – in his eyes – were the secret of his company’s success. “Take care of associates and they’ll take care of your customers,” he constantly advised Marriott’s managers, voicing a deeply held belief that remains the keystone of the company’s culture.
A leader’s priorities aren’t what they claim publicly and verbally; a leader’s priorities are evident from their actions. Arne Sorenson’s priorities are glaringly evident.