Marriott International Inc.
is permanently laying off 850 employees from its hotel in Times Square, another sign that the hotel industry in New York City remains significantly hobbled by the coronavirus pandemic.
Marriott recently told the workers that they will be let go March 12, nearly a year after more than 1,200 employees at the New York Marriott Marquis were furloughed as rising coronavirus infections prompted the closure of nonessential businesses and tourist spots. Those who remain on staff are either working or are expected to return to work soon, a Marriott spokeswoman said.
“These are actions we never thought would become necessary at our location,” the hotel’s general manager wrote in a Dec. 9 letter to laid-off workers reviewed by The Wall Street Journal. “The unprecedented severity of the Covid-19 crisis, however, has forced the location to make these difficult decisions.”
New York City’s hotel industry has suffered disproportionately due to the pandemic compared with the rest of the country as demand from corporate and leisure travelers has plummeted, said
national director for hospitality-market analytics at CoStar Group Inc., a commercial real-estate data firm.
New York City hotel rooms reported 33.8% occupancy in the week that ended Dec. 5, compared with 90.8% occupancy during the same week last year, according to STR, a hotel-data firm owned by CoStar.
But that occupancy rate is based on actively available rooms and doesn’t take into account hotels that have closed temporarily during the pandemic, Mr. Freitag said. The occupancy rate for all hotel rooms—open and closed—in the city that first week in December was 24.7%.
“For about a third of the inventory, the owners said, ‘we are better off not being open,’ which is just an astounding number,” Mr. Freitag said.
The New York Marriott Marquis is located in the heart of New York City’s theater district and offers views of Times Square from its eighth-floor lounge as well as several ballrooms for large events or corporate gatherings. But the usually jam-packed neighborhood now offers little to draw hotel guests, with Broadway theaters scheduled to remain closed until June and many office workers continuing to work from home.
a server who has worked for Marriott hotels since 2000 and at the Times Square location since 2013, said workers haven’t been given details about possible severance packages. She said she had been preparing herself for the possibility that her job wouldn’t survive the pandemic, but the layoffs came as a shock to many of her co-workers.
“I was warning everyone, ‘Be aware, don’t be surprised if they let any of us go,’” Ms. Salcedo said. “People just kept saying, ‘No, no way.’ But I said, ‘We’re not in the union, they can do whatever they want with us. There’s no protection.’”
The Marriott spokeswoman said laid-off workers will receive information about severance benefits early next year. All furloughed employees have continued to receive health benefits during the pandemic and that coverage will continue for the workers who are being let go until their separation date, she said.
Across New York City, the number of jobs in the lodging industry in October, the most recent data available, was about 38% lower than a year earlier, according to the state’s Department of Labor.
Mr. Freitag said the distribution of coronavirus vaccines, which began Monday in the U.S., means the rebound for business and pleasure travel is within sight, although it will still be some time before the vaccine is widely distributed. How many hotels can hang on until then will depend on whether lenders continue to give owners concessions and whether owners continue to feel hotels are the best uses of their properties, he said.
“Not today, not tomorrow, but you can at least envision a future where offices will be open again and corporate transient travelers will be back in New York City again,” Mr. Freitag said. “And Broadway will eventually open again. The big question of course is, when?”
Write to Kate King at [email protected]
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