Impact Blog
Hotels: Laying off thousands, but making room for the sick and front-line workers

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      By Imani CampESG Senior Research Analyst, Calvert Research and Management

      Washington -- Operating at single-digit capacity and facing financial hardship worse than 9/11 and the Great Recession has forced hotel owners and operators to make tough decisions. Many hotel brands have shut their doors as COVID-19 social-distancing recommendations prevail.

      Globally, the most recognizable brands have laid off or furloughed their workers affecting employees from housekeepers to hotel managers, as well as those within corporate headquarters. While some executive and management team members are also taking significant salary reductions and steps to ensure that employee medical benefits remain intact, others are going even further to provide employees with opportunities to continue earning income even during the crisis.

      Serving Communities

      While layoffs have hit the industry hard, some brands have focused on helping workers stay connected to employment. For example, at least one major chain set up an online resource center and expedited hiring process in partnership with companies that have a corresponding short-term demand for increased staff, such as grocery chains and delivery services.1If successful, this approach would help its employees earn money elsewhere while the downturn in business persists, while allowing them to transition back to their old company when the situation improves.

      Others are utilizing vacant capacity to provide services to health care providers and patients impacted by COVID-19. The American Hotel and Lodging Association launched Hospitality for Hope in late March to connect vacant hotel properties with local health care providers and governments. The contracted rooms could house patients with mild cases of the coronavirus who do not need extreme medical care, but need to quarantine, first responders, medical staff or hospital patients not suffering from the virus. The City of Chicago is participating in this effort and estimates spending $1 million per each 30-day hotel block providing a critical source of ongoing revenue for an industry hit particularly hard by government-mandated shutdowns. Approximately 15,000 properties have registered for the program.2

      Finally, some chains have offered free or reduced room rates to US health care workers and first responders who are helping with the pandemic. This will allow workers a place to sleep or somewhere to self-isolate away from family. Specially-trained hotel employees will staff the participating locations and be compensated for their work.

      Bottom line: Though hotel brands are suffering exponential losses during this unprecedented global pandemic, servicing front-line staff and others could keep a spectrum of workers employed and benefit the local communities in which these hotels operate. Calvert will continue to monitor these companies to evaluate how these measures work in practice.