A very slow recovery started this year, but the turnover is still only one-fifth of the usual - János Parti told növekedés.hu. According to the director of sales and marketing at Marriott, international events are expected to restart in March next year, while foreign tourism can come close to 2019 levels in 2023-2024 at the earliest. He also said that the relatively lower wages in the hotel and catering sector need to be adjusted to other sectors.
How much has your turnover dropped since March 2020, i.e. the outbreak of the coronavirus?
The turnover of Budapest Marriott fell by 70 percent in 2020 on an annual basis. This, however, included January, February and the first half of March, which was a period that brought very high revenues last year. If we compare the second, third and fourth quarters of 2020 with the previous year, we can already see a 90 percent drop in turnover.
A very slow recovery has already started this year, but the turnover is still only one-fifth of the usual.
How did you manage to get through the lockdown period? How did the headcount change at Marriott; were there significant redundancies?
We were open throughout the whole coronavirus crisis, receiving guests on business trips and also holding online events that were permitted by the regulations. However, virtually the entire period was about minimizing losses.
As a result of the pandemic, the number of employees decreased from 280 to 190 in one year.
On the one hand, when the epidemic first broke out we were forced to lay off some employees who were on a probationary period, worked as trainees, or were leased staff. After that, we had to make some minor redundancies in May last year.
On the other hand, among the approximately 90 employees that left there were several who gave in their notice themselves because of the uncertainty of the situation. Among office workers, it was typically employees in junior positions who left; and their posts were not filled in during lockdown.
What proportion of the staff worked reduced hours?
We applied different solutions to get through the past one year. Reduced working hours was one of these solutions; so there were months when we employed certain workers part-time. We had several colleagues who asked for the opportunity to work part-time themselves, as they took on a second job elsewhere. We granted this opportunity to everyone that requested. In addition, in some cases, we used our corporate relations to try and help our employees find part-time jobs at other companies.
There was also a period when we modified the employment contracts of some employees, so they continued to work for us but at reduced wages; in such cases the reduction was proportionally higher for executives than for other employees.
Thanks to these crisis management measures, the hotel has survived the epidemic, it is operating at the same standard as before and we continue to have the owner’s trust.
Which state measures were the most helpful in the hardest period?
What helped most was tax and contribution reductions, and the wage subsidy program for the sector. Only a very low turnover was added to this, about one-tenth of the usual.
When do you think foreign tourism can restart and how long will it take for the turnover to go back to normal? How many foreign guests do you have?
Nearly 90 percent of our guests are foreigners. As far as we see, the number of visitors arriving on holiday from European countries who book their trips on their own may start increasing relatively fast as soon as international flights resume.
On the other hand, in the case of organized tourism, for example international business conferences or tourist groups on boat and bus tours, the situation is much harder. In my view, 2022 altogether will still be a transitional year. We can come close to the 2019 levels in 2023-2024 at the earliest.
What are your expectations regarding the restart of organized events?
The organization of events started almost immediately after the ban was lifted, although the domestic business events market may only start to return to normal from September.
As for international events, we expect a slow recovery from March next year.
Until then, there will be a few international events of course, but as the venue for such events has to be booked about 4-6 months in advance, I don’t think this segment will pick up until next March.
What has changed in terms of room reservations? How much flexibility is expected by guests?
We are now seeing booking times becoming shorter and shorter, which has already been a typical trend in the last few years.
The pandemic and the uncertainty inevitably have an effect on the willingness to travel, so guests wait until the last minute before making a decision. A significant proportion of reservations are made at an extremely short notice, which makes work apportionment really challenging.
Besides, guests also expect more flexibility regarding cancellations and refunds.
How easy do you think it will be to entice workers back? How much wage growth are you expecting in the sector?
During the pandemic, many workers left the sector, and they may have realized that they can make a living in other areas as well, where they don’t need to work in shifts in such a stressful environment like the hotel industry.
In addition, in some jobs, wages in the hotel industry are unfortunately lagging behind other industries.
It all depends on how we can manage wage growth. I think workers can be enticed back with competitive wages, but higher wages will need to appear in the prices after a while, and so all service providers are expected to increase their prices.
In my view, there is no other way forward; when the coronavirus situation is resolved, the relatively lower wages in the hotel and catering sector need to be adjusted to other sectors.