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Further hospitality redundancies expected as Marriott enters consultation process

08 June 2020 by
Further hospitality redundancies expected as Marriott enters consultation process

Up to 1,450 hotel employees could be made redundant across Marriott International's UK portfolio as the group enters a consultation process with staff.

The group's Renaissance Manchester hotel is already set for closure around 15 July. Marriott said: "the wellbeing of our associates is important to us and we are striving to proceed in the most thoughtful and respectful way possible".

Marriott also confirmed plans to restructure its UK operations due to the impact of Covid-19 on the travel and hospitality sector.

A spokesperson for Marriott International said: "As travel restrictions and social distancing efforts around the world became more widespread, we experienced significant drops in demand. We have therefore had to adjust our operations accordingly and are planning for continued reduced demand for an uncertain duration. After evaluating all options for our portfolio of hotels in the UK, and following discussions with our hotel owners, we have taken the difficult decision to restructure our operations. Associates at the UK properties have therefore been advised that we will begin a collective consultation process about these proposals.

"Our associates' wellbeing remains our utmost priority and we are actively supporting the impacted associates through this transition. We will proactively review any alternative opportunities across the company and have a dedicated team of HR professionals on hand to offer advice and support and talk through individual circumstances."

Crieff Hydro hotel group has also entered into a consultation period with its staff and the Best Western Grand Hotel Hartlepool has fallen into administration, with all employees made redundant.

Crieff Hydro runs seven hotels across Scotland, including the Crieff Hydro hotel, Kingshouse hotel, Ballachulish hotel, Peebles Hydro and the Murraypark hotel.

The group said that the consultation process will involve 241 people, but it hopes that through consultation the number of compulsory redundancies, if needed, may be less than half.

Chief executive and chairman Stephen Leckie said that although the group had taken measures to reduce costs, he anticipated bookings being down by 30%-50% for the next year, amounting to a revenue loss of at least £70m (50%) this financial year.

The group has had to pay £500,000 to keep the buildings safe and insured during the closure and to take out £5m in loans. "This would have a profound effect on any business," he said.

Leckie added: "When we closed our doors at the end of March, it was one of the darkest days in our 150-year history and this is another. The impact coronavirus has had on our industry and business has been immediate and drastic. As a family-run business built on the strength of our people, discussing potential redundancies is the toughest step we've ever had to consider. I am personally devastated for every one of our team who could lose their job…

"The effects of this pandemic can't last forever and our long-term vision is to rebuild the team in the future when business returns."

Marc Crothall, chief executive of the Scottish Tourism Alliance, said: "This is a harsh reality of the impact of Covid-19. Crieff Hydro is a really good, well-run and managed group of hotels which has always invested in its employees, and I know it will be hurting the family in having to take this action.

"But without any income coming in for many months, and coupled with high levels of monthly fixed costs and with no sign of any long-term grant support, businesses like this are now faced with little or no choice but to cut employee costs.

"Furlough, while it's been a massive intervention and support, is still a cost to businesses, and to protect their long-term survival and ability to trade their way out of this crisis, very sadly tough decisions like this have had to be taken. I suspect we will be hearing similar stories from many more tourism and hospitality businesses in coming days."

Willie Macleod, UKHospitality director in Scotland, added: "Unfortunately, this is not the first such announcement and we expect is likely to be followed by many more.

"Hospitality businesses in Scotland have been starved of revenue for almost three months at a time of year when they would otherwise be extremely busy. Instead, they are closed and burning cash to meet unavoidable fixed costs. This is an unsustainable position and it comes as no surprise that businesses have to take action like this in an attempt to survive until they are able to reopen on a viable basis.

"Hospitality businesses greatly value their experienced and loyal teams and have gone to great lengths to avoid the position that Crieff Hydro now finds itself in."

The news follows a number of redundancies announced last week. The Restaurant Group expects to make 2,000 to 3,000 roles redundant as it considers keeping a third of its 600 sites closed, while chef Richard Corrigan confirmed redundancies would have to be made at his London restaurants.

Meanwhile, OYO has also entered a consultation period with staff, as has InterContinental Hotels Group (IHG) across its managed portfolio. PPHE Hotel Group said in a business update: "It is possible that a large number of redundancies may be necessary in the UK region to ensure the group's operational structure is fit for purpose and accords with guest demand for the short to medium term."

Photo: Shutterstock

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