Marriott International chief executive Arne Sorenson’s voice cracked with emotion in a video message in March as he warned employees to brace for the toughest times the hotel industry had faced.
“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,” Sorenson said in a video that was widely praised for its honesty and transparency.
That was then, this is now.
Turns out there is something worse, and it has happened at the Boston Marriott Copley Place: laying off employees and not paying full severance because it’s a pandemic. The move is straight from the playbook of the Four Seasons on Boylston Street, where employees in May were shortchanged on their severance — until the media shone a spotlight on a multibillion-dollar company behaving badly.
The five-star hotel reversed course, apologizing and giving full severance packages. The Four Seasons felt the heat because powerbrokers from CEOs to members of Congress refused to go back to the hotel’s Bristol Lounge, where Boston’s elite have for decades broken bread and sealed deals. In other words, money talks.
Newsflash: Marriott Copley, you too, could pay a price for treating employees poorly. It’s one of the few Boston hotels that has a ballroom big enough to host more than 1,000 people, and organizations routinely spend tens of thousands, if not more than $200,000, to hold annual galas and dinners there.
Some of these groups are closely watching how the Marriott Copley handles these layoffs, and that could determine whether they will return to the venue.
The New England Council was supposed to hold its annual dinner with 1,700 attendees at the Marriott Copley in October, but COVID-19 forced the group to hold a virtual event instead. While the influential business networking and lobbying group doesn’t expect to have its next in-person annual dinner until 2022, what happens in 2020 matters.
“We look at how they treat their employees, in particular during COVID,” said Jim Brett, president of the New England Council. “That would be a factor we would take into account in making a decision.”
For a decade, GLAD, the Boston-based legal advocacy group for the LGBTQ community, has had its largest event of the year at the hotel. The 2019 celebration drew more than 1,000 attendees.
“It’s important to GLAD to work with vendors that operate in line with our values, which includes treating employees equitably,” the group’s executive director, Janson Wu, said in an e-mail. “We’ve always appreciated the high level of service and commitment from all the employees we’ve worked with for our events at the Marriott Copley over the years and look forward to returning when large gatherings are again possible. That said, looking at how any hotel or venue where we hold events treats their employees will continue to be a factor in our decision making.”
Let’s be clear here: COVID-19 has dealt the hospitality industry a bad hand, and hotels are hurting. Government restrictions are preventing big gatherings, and companies have cut business travel. When revenues drop sharply, layoffs are unavoidable.
But there’s a right way to let go, and then there’s the Marriott way. More than 230 workers and about 30 managers were terminated, according to hospitality union Unite Here Local 26. Severance packages were rewritten so that employees received a maximum of 10 weeks of pay, instead of the previous limit of 26.
A group of employees recently sent the company a letter demanding they be first in line for their jobs once business picks up. They also want the hotel to honor the original one week of severance pay for every year of service. (Marriott Copley is nonunion, but other Marriott brands ― including the Ritz Carlton, Sheraton Boston, and Westin Copley — are part of Local 26.)
“I absolutely understand the need for layoffs at this time. We are all suffering in that regard,” said Dusty Rhodes, president of the event-planning firm Conventures, who also had to lay off employees this year.
Still, Rhodes thinks Marriott Copley employees are getting a raw deal. She said she would advise clients to think twice about going back. In 2019, Rhodes organized eight events at the hotel with more than 1,000 people at each one.
“As a member of the hospitality community, I have great empathy for those employees,” Rhodes told me. “I very much believe they should get full severance and wish that they be reinstated to their original jobs when the time comes.”
I reached out to the Marriott Copley’s general manager, Alan Smith, for comment. I also contacted Host Hotels & Resorts. (Marriott manages the property, but Host owns it.) No response from Host, but Smith wrote in an e-mail that the hotel has “worked diligently to offer a severance that is competitive within the industry, and to provide support and resources for our valued employees under these challenging circumstances.”
Beyond losing business, hotel chains like Marriott could be shut out of federal rescue money, Senator Ed Markey warns.
“The hotel management’s handling of these massive layoffs, without proper severance or benefits, is disgraceful,” the Massachusetts senator said in a statement. “Throughout the pandemic, big hotel owners have consistently asked for massive government bailouts, but their actions prove that these corporations cannot be trusted to put people over profits. We must focus on protecting workers, not bailing out hotel moguls or investment trusts.”
Yes, times are tough for both Marriott and Host, but hold the tears, please. These companies have deep enough pockets to pay employees their full severance. So will they do the right thing?
“It’s hard to say,” said Michael Bellisario, senior research analyst at Baird Equity Research, who follows global hotel brands. “It comes down to these are public companies. Like any company in a situation like this, it is an opportunity to right-size your business.”
There’s a false equivalency when big companies such as Marriott and Host get a free pass just because it’s a pandemic, while laid-off hotel employees like Patricia Tchoumi are asked to fend for themselves.
In the third quarter, Marriott reported that it had $1.6 billion in cash — or nearly sixfold what it had a year earlier. The company also has the ability to borrow $3.6 billion.
Meanwhile, after 17 years, Tchoumi, a 53-year-old concierge attendant who was furloughed in March and laid off in September, gets severance pay that’s half of what she expected.
Tchoumi, who made about $56,000 a year, told me she had to cash out her 401(k) to pay her mortgage and college bills for her children. She has only $1,000 left in savings and soon will run out of unemployment benefits.
Asked what will happen to her and her family, she began to cry: “I don’t know.”
Marriott could easily ease her fear and uncertainty. All it has to do is show some humanity.