Not since the days following 9/11 has the U.S. hotel industry experienced a wave of layoffs like that set in motion by the economy's recent free fall. The cuts raise some concerns about hotels' ability to maintain service standards.
With third-quarter earnings reports for 2008 taking a steep dive, major hotel chains InterContinental, Marriott, Starwood and Wyndham announced they would be forced to implement significant cost-cutting strategies, including global work force reductions.
In Mashantucket, Conn., the 1,416-room Foxwoods Resort Casino announced the layoff of 700 employees, about 6 percent of its work force, due to the weak economy and sliding profits. This included cuts at the resort's MGM Grand, which had debuted an expansion in May.
"I will definitely speak with them about this as I get closer," said Kim Zielinski, conference manager for the Connecticut chapter of the National Association of Professional Agents, which has long been set to hold its annual meeting at Foxwoods, March 16-17, 2009. "I have done a lot of events at Foxwoods and always had a good experience. I expect them to deliver the same," added Zielinski, whose event draws about 400 attendees.
Foxwoods remains confident regarding its service ability. "None of the positions that were affected impact our guest services," said a company spokesperson. "We continue to maintain full services throughout."
Also trimming its work force is the luxury 2,000-room Borgata Hotel Casino & Spa in Atlantic City, which was forced to cut 400 employees in early November, the first staff reduction in the property's five-year history. "We have done everything we possibly can to avoid this step, but we have no choice," said a Borgata spokesperson. "The Borgata employs about 7,500 people, and the reduction amounts to approximately 5 percent. We leveraged the reduction so that our service standard would not be compromised."
According to Washington, D.C.-based meetings industry lawyer James Goldberg, making a case for slippage in hotel service is never easy, because there are no objective standards of measurement to go by, and hotels are not required to inform guests of changes in staffing levels.
Nevertheless, Goldberg noted, a property's service standards can be addressed in the contract, by including specific requirements such as the need for X number of servers per X number of banquet guests. "Once the hotel agrees, it becomes a mutual measurement the hotel can be held to," he said.