Hotel Chain Seeks Bailout Money While Workers Struggle to Survive

A pedestrian walks past a closed off entrance to the Mariott Marquis hotel in San Francisco on April 26, 2020. (Beth LaBerge/KQED)

If you’ve ever looked at San Francisco’s skyline, you’ve probably seen the Marriott Marquis, a luxury hotel located downtown. And if you’ve been inside one of the 1,362 rooms or 138 suites on the building’s 39 floors, you’ve probably encountered something that has been cleaned by Larrilou Carumba.

Carumba has worked as a housekeeper at the Marriott Marquis for eight years. She estimates that she’s changed tens of thousands of beds and folded hundreds of thousands of towels. But because of the coronavirus pandemic, she has been without work now for a month and a half — and counting.

The lack of income has been hard. Carumba is a single mom with three kids. She said she's spent the last two years saving tips and taking on extra shifts to pay off $35,000 in credit card debt from a toxic relationship that she escaped. Carumba was getting close to debt free, she said, until last year, when her landlord raised the rent by $800 a month.

Larrilou Carumba has been a housekeeper at the Marriott Marquis for eight years, but has been out of work for weeks due to the coronavirus pandemic.
Larrilou Carumba has been a housekeeper at the Marriott Marquis for eight years, but has been out of work for weeks due to the coronavirus pandemic. (Courtesy of Unite Here! Local 2)

Carumba couldn’t pay, so she moved her family into a room in her sister’s home. She took on more shifts, changed more beds, folded more towels and put away more money. At the end of February, she finally thought she had enough money to move out of her sister’s place.

But then the coronavirus hit, and for now, she’s stuck. There are nine of them in the house, including Carumba's 88-year-old mother.

Carumba chips in for rent and utilities, but she said the one-floor bungalow is crowded, especially now with the pandemic.

“I don’t want them to feel that they are burdened because of the four of us, but usually we are just hanging in the room,” she said.

Like tens of thousands of other workers that Marriott furloughed, Carumba is not getting paid by her employer. Instead, she said she’s collecting state unemployment and getting a little help from her kids’ school in the form of milk and PB&J sandwiches.

She said her kids are sad to be stuck inside all day.

“I tell them just to pray and just let’s hope this will end soon,” she said.

Larrilou Carrumba is sharing a house with her sister's family, where she said a total of nine people are living.
Larrilou Carrumba is sharing a house with her sister's family, where she said a total of nine people are living. (Courtesy of Larrilou Carrumba)

Corporate Philosophy Focused on Shareholder Profit

Carumba’s employer, Marriott International, and its investors have done very well in recent years. Like many major hotel chains, it has used its profits to buy back its own stocks and enrich investors with dividends. As the world’s largest hotel chain, it has sent the most money back to investors and over the last decade, funneled $16 billion into stock buybacks, according to Statista and S&P Global Marketing Intelligence.

In 1997, members of the Business Roundtable, an association comprising chief executives from major corporations, signed a declaration that said the primary duty of executives was to look out for shareholders — a logic that CEOs had been following for decades. Chicago economist Milton Friedman summed it up with a famous line published in the New York Times in 1970 when he wrote, “The social responsibility of business is to increase its profits.”

Late last summer, however, the Business Roundtable promised a shift in corporate philosophy. It issued a pledge signed by 181 CEOs from America's largest companies, saying executives should be concerned not just with shareholder profits but also with workers and the local community.

“Each of our stakeholders is essential,” the pledge said in part.

Marriott CEO Arne Sorenson was one of the executives who signed the pledge. Then, in February, the COVID-19 pandemic hit and put his promise to the test.

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Dividends Flow Even During the Pandemic

On March 19, Sorenson had a business update call with investors. Because of the pandemic, Sorenson said the company would not be repurchasing shares and would stop issuing dividends to investors for the time being.

Sorenson acknowledged that the public was not happy with the idea of companies doing things to enrich shareholders during a public health crisis.

“I know there is popular sentiment which is strongly against share repurchase and to some extent a crisis like this might fuel that,” Sorenson said.

Still, toward the end of the call, Sorenson echoed again the corporate philosophy of looking after its shareholders.

“The cash that we produce, if it is not needed to invest in our business, belongs to our shareholders,” he said.

On March 31, Marriott issued its last dividend payment for the time being. A spokesperson for Marriott said that payment was the result of a stock buyback initiated in February before the pandemic shut down much of the nation.

At times like these, however, workers like Carumba say the company should instead be investing in its own workforce, including raising their wages and benefits.

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Profits and Bailouts

While profits in boom times helped enrich shareholders, during the current pandemic, revenue is drying up. Nearly 80% of all hotel rooms are currently empty, according to the American Hotel and Lodging Association. That means executives like Sorenson are looking for ways to get funding so that they can pay down their debts and avoid defaulting.

In March, Sorenson, along with executives from other hospitality and travel companies like Hilton and Hyatt, asked President Trump for $250 billion in federal aid to offset their loss of business. They are lobbying particularly for money that, unlike funds in the Payroll Protection Program, would not have to go to workers, but rather could be spent on things like old construction debt or franchise fees.

Marriott has not yet received bailout money, but labor advocates say if they do, it should go to workers first.

Ted Waechter, a spokesperson from Unite Here Local 2, the union that represents Carumba and other workers in San Francisco, said he wants hotel chains to stick to the promises they made in August as part of the Business Roundtable. If there was ever a time to uphold the principles of caring about the community and workers, it is during a public health crisis like this, he said, and especially when it comes to the use of federal taxpayer dollars.

“Money that is coming from congress as relief for businesses that have been affected by the coronavirus crisis needs to be going to workers first,” Waechter said. “That needs to be the priority right now.”

The union successfully negotiated to have Marriott extend health insurance for Bay Area housekeepers like Carumba until the end of August, but the company isn't keeping their workers on payroll.

Waechter said 12,000 of the union’s 14,000 Bay Area members are currently out of a job.

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