With global travel at a near-standstill due to the COVID-19 pandemic, Hilton Worldwide has announced the enactment of some dramatic actions “to significantly reduce expenses and preserve liquidity,” which will impact both its workforce and investors, in order to preserve the core of its business until the crisis passes.
With all-but-essential travel paused around the world, Hilton said that its “operations have been suspended across many managed and franchised hotels, and those hotels that remain open have reduced services for guests because of decreased occupancy levels.” On March 10, the company had already issued a statement withdrawing its formerly released 2020 financial outlook in view of the novel coronavirus’ cascading economic effects.
The major hotel operator said in a statement on March 26 that it will now be eliminating all non-essential expenses, including capital expenditures, halting share buyback and suspending payment of investor dividends for the time being. Other policies being implemented at the corporate level include:
—Hilton President and CEO, Chris Nassetta, will forgo his salary for the rest of 2020
—Hilton’s Executive Committee will take a 50-percent pay cut while the crisis continues
—Many of Hilton’s corporate Team Members will be furloughed for up to 90 days or be given reduced schedules, beginning April 4, 2020.
—Furloughed corporate Team Members will retain their health benefits and will also be eligible for unemployment benefits during this time
—Corporate Team Members who are not furloughed will have their pay cut by up to 20 percent for the duration of the crisis
“While difficult to make, these decisions will allow the company to weather the current crisis and emerge in the best position to welcome back its team members and guests when it is safe again to travel,” Hilton wrote.
Hilton is partnering with leading companies including @Albertsons, @Amazon, @CVSPharmacy and @Walgreens to connect our Team Members whose employment has been impacted by COVID-19 with hundreds of thousands of immediate opportunities. Learn more: https://t.co/yiEjqCaZm0 pic.twitter.com/2F0OqrcdUS
During this challenging period, Hilton is, however, actively working to provide its furloughed workforce with alternative options for employment during this tough period, working with over 30 leading companies such as Albertsons, Amazon, CVS, Walgreens, Lidl and Sunrise Senior Living to offer direct access to temporary jobs via the Hilton Workforce Resource Center. These companies are among those currently coping with a spike in demand as a result of the COVID-19 pandemic.
Hilton has also activated its Team Member Assistance Fund to aid its staff members who may have suffered directly, or have family who’ve suffered directly from the coronavirus. The company is also contributing to the cause by rerouting food from its hotels to local pantries, providing housing for first responders and healthcare workers, and, through the Hilton Effect Foundation, supporting several outside organizations that are working to fighting the spread of COVID-19 and aiding affected communities.
For more information, visit Hilton.com.
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