Arne Sorenson0:02
Hello Marriott associates. I'm here to give you an update on the impact of coronavirus, or COVID-19, on our business and the steps we're taking to respond to it. Because of the profound impact COVID-19 is having on so many of us around the world, this is the most difficult video message we have ever pulled together. Our team was a bit concerned about using a video today because of my new bald look. Let me just say that my new look is exactly what was expected as a result of my medical treatments. I feel good, and my team and I are 100% focused on overcoming the common crisis we face now. Let's talk about that crisis: COVID-19. Let's start with the health challenge itself. Across our company, the number of COVID-19 infected associates is low, and I'm grateful for this. I want to acknowledge the associates who are dealing with it as a patient, a parent, family member, or friend, and the hundreds of Marriott colleagues who are at this minute quarantined. Our well wishes and thoughts are with all of you. In terms of our business, COVID-19 is like nothing we've ever seen before. For a company that's 92 years old, that's borne witness to the Great Depression, World War II, and many other economic and global crises, that's saying something. But here are the facts: COVID-19 is having a more severe and sudden financial impact on our business than 9/11 and the 2009 financial crisis combined. The worst quarter we had in those earlier crises saw a roughly 25 percent decline in hotel revenues on average across the globe. In this case, which began in Greater China in January, we quickly saw a 90 percent decline in our business in China. In the two months since, we have seen COVID-19 extend to the rest of the world. In most markets, our business is already running 75 percent below normal levels. The principal challenge we face is obvious: governments all around the world are taking steps to contain COVID-19. The restrictions on travel, gatherings of people, and required social distancing are having an immediate impact by depressing demand for our hotels. As a result, we have hotels around the world that can't operate without incurring substantial economic losses and risking permanently their ability to reopen when this gets behind us. This has caused hundreds of hotels to close or start the process of closing until such time as demand begins to return. Given these circumstances, we've been forced to take proactive steps to respond to the crisis and are putting into place business contingency plans globally. While pieces of these contingency plans vary given the differences in local laws and the geographies where we operate, certain elements are universal. We've worked to take controllable costs out of the business, like suspending all non-essential travel. We have paused all new hires with the exception of a small number of mission-critical positions. We have stopped all hotel initiatives for 2020 and have gone dark on our brand marketing and advertising during this period. Both Mr. Marriott and I will not be taking any salary for the balance of 2020, and my executive team will be taking a 50% cut in pay. Above property around the world, we are moving to shortened work weeks, and in the U.S., we are also putting in place temporary leaves for at least the next 60 to 90 days that will impact most associates at our headquarters and above property locations. At the property level, contingency plans vary by geography and hotel occupancy rates, but for open hotels include closing food and beverage outlets, reducing staff, and closing floors of hotels. More details about these actions and what they mean will be shared through local HR teams. 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. In two weeks, I will mark my eighth anniversary as CEO, a position I accepted on the heels of two legends in hospitality. As a leader, I've experienced so many wonderful highs and a good number of challenging lows. 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've never been more determined to see us through than I am at this moment. While it's impossible to know how long this crisis will last, I know we as a global community will come through the other side, and that when we do, our guests will be eager to travel this beautiful world again. When that great day comes, we will be there to welcome them with the warmth and care we are known for the world over. As I close, I encourage you to please take care of yourself, your friends and family, and the community around you. I wish you good health and a sense of optimism. Together, we can and we will overcome this, and we'll thrive once again. Thank you and be well.
