As hundreds of thousands of hotel workers lose their jobs, the industry’s largest union is calling on the major hospitality companies to forego returning capital to shareholders and instead use the money to pay workers.
The 300,000-member UNITE HERE union on Monday called on five publicly-traded hotel operators to cease dividend payments and share repurchases while workers laid off because of the coronavirus pandemic struggle financially.
“Hotel firms should preserve available cash to pay workers during the crisis, and especially to make sure that every hotel worker has health insurance,” UNITE HERE president D. Taylor wrote in a statement.
Taylor said five of the industry’s largest operators — Hilton, Marriott, Wyndham, Hyatt and Choice Hotels — have committed since the beginning of the year to returning billions of dollars to investors through buybacks and dividends.
“It is appalling that the industry is scheduled to make more than $200 million in dividend payments in the next few weeks as if people were traveling as usual,” he said.
Representatives for the hotel chains did not immediately respond to requests for comment.
Last week, the hospitality industry asked the Trump administration for a $150 billion bailout, warning that without the additional cash half of the hotels throughout the country may be forced to close this year.
The issue of corporate America returning money to shareholders through stock buybacks at a time of national crisis is a politically charged one.
In Washington, D.C., Democrats cited stock buybacks as a sticking point Monday when they blocked a $2 trillion relief bill for the second day in a row.
A growing list of companies including Royal Dutch Shell Plc, Coca-Cola European Partners Plc and Best Buy Co is pressing pause on stock buybacks, the Washington Post reported.
The hotel industry is one of the earliest and hardest hit sectors to feel the impact of Covid-19 as occupancy rates plunged, causing hotels to shutter and lay off workers.
Contact Rich Bockmann at rb@therealdeal.com or 908-415-5229.