By Bill Marriott
This year has been a year like no other. For a company that’s been around 93 years and witnessed the Great Depression, a world war, terrorist attacks and numerous other economic downturns, that’s saying something.
We started off 2020 with tremendous strength and momentum globally. But by mid-February, occupancy in mainland China was under 10%.
By late February, after we saw that COVID-19 had spread from China to South Korea, Iran and Italy, we knew the virus was going global. The impact turned out to be unprecedented. We were forced to close hotels around the world, furlough associates and develop entirely new cleaning and F&B protocols for more than 7,400 properties globally. Our immediate concerns were supporting our associates, sourcing cleaning supplies for our hotels and closing our corporate headquarters.
In the months that followed, we offered voluntary separation plans to help associates who were considering retirement or ready for a new chapter. We eliminated jobs both above property and on property. And with our headcount down meaningfully, we rebuilt our organization. It’s been a painful , heartbreaking time.
What we learned from China
From the beginning of this crisis, we were deeply engaged with our teams in China. We learned a lot.
The contrast between the U.S. and China is worth studying. Both countries are domestic travel markets, which gives them a huge advantage. The hospitality industry can rebuild in these countries without being dependent on long-haul international travelers, who will surely be slow in coming.
But the difference in national responses to the crisis has led to very different results. China, of course, has a centralized government system. It exercised its authority to implement nationwide travel restrictions and strict control measures. Consequently, China managed to put the virus largely behind it. Incredibly, September 2020 occupancy levels in mainland China were a bit higher than they were in September 2019. Those occupancy numbers were driven by two things. The economy is recovering— first with leisure travel, then business, and now meetings. Secondly, fewer Chinese citizens are traveling abroad for vacations or business.
The good news we’ve learned from all of this is that when the virus is perceived to be under control, demand returns for our industry. Unfortunately, the virus is not under control in the U.S. Our best hope here lies with the promise of a vaccine.
When business travel returns
Every day, I’m asked about the future of business travel. Will we all go back to traveling for work or will we stay home indefinitely connecting virtually with our coworkers, clients and partners? In my opinion, as great as video technology has been during this crisis, it’s not a substitute for face-to-face meetings. There really is nothing like in-person collaboration, in-person mentoring and in-person planning.
Business travel is how we built Marriott International. For most of my career, I spent more time on the road than at home. It was hard—for me and my family. But I used those frequent trips to inspect hotels around the world, negotiate with developers and build relationships with general managers and their teams. When I was visiting—whether it was the Middle East, Asia, Caribbean or Canada—I could talk to associates in person and encourage them to tell me their fresh ideas and their challenges. I could meet with business partners to head off potential problems and entertain local officials in person at one of our beautiful properties. That kind of memorable relationship building isn’t going to happen on a video call.
When the time is right and it’s safe, I have no doubt that we’ll all be reaching for our suitcases.
Why I’m optimistic
As an octogenarian, I’ve lived through my share of challenges. But I’m encouraged when I remind myself that my parents survived the last pandemic, the Spanish Flu of 1918.
My dad, J.W. Marriott—who founded this company with my mom Alice Marriott—was a senior in high school when everyone in his household got sick. My mother was a young girl when she lost her father to the virus.
As difficult as it was, they were both resilient and emerged from the experience.
They would go on to open our doors as a root beer stand in 1927, just before the Great Depression. That first cold winter of 1927, they quickly realized they needed to serve hot food if they wanted to survive, so The Hot Shoppes was born.
After the 9/11 terrorist attacks, everyone predicted the end of travel. But our business recovered and grew.
In 1990, we got hit with three things back to back—the real-estate recession, the Gulf War and the Tokyo stock market crash. We were in bad shape financially. I wasn’t sure if we’d make payroll. I started getting calls from investors interested in a hostile takeover. We pushed through, cutting costs and changing how we operate. We stopped building and froze or cut some salaries and unfortunately laid off some associates. It was a difficult time, but we became a leaner, more efficient company.
Today we’re facing a new set of challenges. But I really believe that once we have a vaccine that is available to be widely distributed, our industry will slowly begin to rebuild to the levels we saw in 2019 and, over time, grow beyond that.
There is huge pent-up demand to get on the road and get together in person. So many life events have been postponed—weddings, vacations, anniversaries. There is simply no virtual replacement for them.
We have a lot of work ahead as we continue to navigate through this pandemic. But I have great confidence in the strength of this industry. Working together, there is no doubt the hospitality industry is here to stay.