What reopening? Hotel layoff notices pour in

At least 22 New York City hotels face reality, belatedly report staff cuts

Marriott Essex House, Knickerbocker Hotel and the New Yorker Hotel
Marriott Essex House, Knickerbocker Hotel and the New Yorker Hotel

Hotels across Manhattan are letting staff go as rooms remain empty during the city’s reopening.

At least 22 hotels have filed notices with the New York Department of Labor this month to announce that they will lay off their staff because of Covid-19.

No hotel is safe, it seems. Those dismissing their staff include at least six operated by Marriott, luxury hotels such as the Knickerbocker, and brand names that have shaped the city skyline, including the New Yorker.

Many of the layoffs started when the city began shutting down in mid-March, but the notices were only filed recently as hotels became increasingly fearful that they will be closed for a while, according to the Department of Labor.

Some note that layoffs are expected to exceed six months or that they will continue for an undetermined period of time.

Under New York law, private companies with at least 50 employees experiencing mass layoffs must file notices 90 days in advance or as soon as possible if there are circumstances such as the pandemic. The Department of Labor would not comment on whether any hotels violated regulations by just submitting notices now.

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“Each WARN notice has its own set of circumstances and so each case needs to be looked at individually to determine if an action violates a WARN,” a Department of Labor representative wrote in an email.

Some hotels, like the Fitzpatrick, managed to keep their staff on payroll after receiving a Paycheck Protection Program loan. However, as the eight weeks of forgivable funding nears its end, hotel owners are forced to consider closing again.

New York’s hospitality industry has been wrecked by the shutdown, especially as it limits tourists during its peak summer season.

In New York state, the hotel industry was projected to lose more than 200,000 of 500,000 hotel-supported jobs by the end of March, according to the American Hotel and Lodging Association. Nationally, 4 million such employees were expected to be let go.

“Due to widespread travel and social distancing restrictions, we have experienced significant drops in customer demand,” Marriott International said in a statement. “Hotels are adjusting operations accordingly, which has impacted employment, resulting in staffing reductions, temporary leaves, and in some cases, termination notices.”

Nationally, hotels have started to rehire staff, but progress remains slow. As of June 7, hotel employment was at 40 percent of pre-pandemic levels. In mid-April it was at 28 percent, according to a CBRE report.

Contact Sasha Jones at sasha.jones@therealdeal.com