The coronavirus has hit Marriott International’s business worse than 9/11 and the Great Recession combined, CEO Arne Sorenson said Tuesday.
“What we’re seeing is dramatically worse than what we saw in those two prior crises,” Sorenson said on CNBC’s “Squawk Alley.”
In those two crises, the worst quarterly declines in global revenue Marriott experienced was around 25%, Sorenson said in a Twitter video last week. Sorenson told CNBC he used to think those declines would be “the worst we’d ever seen.”
“We’re now seeing revenue down 75% plus, probably I suspect nearing a 90% decline in the United States. And obviously at those levels there just isn’t any business in hotels,” said Sorenson, who suspended his salary for the year.
Shares of the world’s largest hotel company were soaring Tuesday, rising more than 11% to around $78 each as Wall Street optimistically awaited Washington lawmakers to pass an economic stimulus bill.
Marriott stock, like so many in the travel sector, has been pummeled as the coronavirus spread around the world and upended daily life. It is down around 48% for the year.
Sorenson, who is battling pancreatic cancer, said Marriott has seen its business pick up in China and elsewhere in the Asia Pacific region, including Taiwan and Singapore. Occupancy in mainland China, where the global pandemic began, has picked up from the single digits to near 20%, he said.
Yet as the pandemic was taking root in the U.S., Marriott recently furloughed around two-thirds of its 4,000 corporate employees, The Wall Street Journal reported.
Marriott announced last week it was beginning to furloughing tens of thousands of workers at the properties it manages. They will not be paid but those who receive health benefits will continue to have them.
Sorenson said the company took a “furlough approach,” instead of terminating employees, while ensuring the impacted workers are still “eligible for the unemployment insurance and other tools that are out there.”
The U.S. tourism industry has asked for $150 billion in relief to offset a dramatic decline in travel due to the coronavirus. Sorenson said the money would be used to support workers and the operators and owners of the hotel buildings.
“They tend to be locally focused. They’ve got mortgages. They’ve got capital that they need to make sure they can tap into to survive this crisis and reopen,” he said. “When you talk about the $150 billion, we’re really talking about tools that might be available to both of those communities in order to support them as we go through it.”