Name: Hyatt CEO on coronavirus: 'The most challenging period of time in my professional life'
Uploaded: 2020-03-31
Duration: 8 min 13 s
Description: Mark Hoplamazian says it's difficult balancing employee needs and shareholder interests.

[ MUSIC ] Hi, Mark, thank you so much for joining us. I know that these are tough times at Hyde, and actually you told your employees that you had to make some painful and unimaginable decisions. So tell us about some of the actions that you've had to take because of coronavirus. Thank you, Susie, thanks for having me. I hope you and your family are doing well and the entire fortune family as well. Yes, it's been a very torturous time. The way I would describe it as a conflict between our purpose as a company which is to care for people and the things that we have to do because we're charged with ensuring the financial Future of Hyatt so that we can welcome people back and get back to travel. It's been very challenging time because we've had to put on temporary leave a very large number of people working in our hotels. And as to the corporate office, two thirds of our corporate colleagues have either been Put on temporary leave or have their work reduced very significantly. And this has to do with the unprecedented decline in demand because of COVID- 19. And you've also been required to close a number of Hyatt Hotels indefinitely. So when you're in a situation and crises like this, how do you balance between employees needs versus shareholder and financial demands? Yes, first of all, we are suspending operations in a large number of hotels. But we view that as temporary. That we have to get through this initial crisis phase of covid 19. We're not exactly sure how long that will be. But we measure this in a number of weeks as opposed to many months. But we'll see. The balance that you describe is exactly the source of this conflict that we feel because we at the core of everything we do is our purpose to care for people. And we will do that and even though we have to take some actions like putting people on temporary leave It's the way we do it that matters the most. So we're trying to extend ourselves. We're putting people out on furlough and not layoffs that allows them to apply for unemployment benefits but maintain health care. We've established the head care fund to help provide financial support for those who are in most need, most in need. And finally, We're partnering with over 10 companies that are currently hiring. Companies like Walmart and Pepsi and CVS and Walgreens. We're very grateful to them for allowing us to plug straight into their Their application processes are aligned to help our colleagues find work there, if they want to work during their furlough. You're not taking a salary during this crisis. And your entire executive team have taken a 50 % Pay cut. But Mark a report out today says that you and the executive team are still eligible for stock and option awards into the millions of dollars. So how do you justify, accepting those awards given that many of your employees Will not be getting a paycheck for a long time. Yeah, so the stock based compensation program that we have at Hyde covers over 400 people, and we, it is something that is scheduled far in advance our the timing of all of these grants is set two years in advance because they relate to a schedule, a calendar that we maintain for our board of directors. So this award that was made last week was part of the same process that we had in place since we'd been a public company. We had no influence over the timing of it. But that doesn't diminish or otherwise change our focus in providing Resources for all of our colleagues who are in need of assistance and that's why the hide care fund is so critical. And it is something that we are staying focused on making sure that we we provide support. Well, let me ask you this. Might you reconsider accepting that Big award financial award and use it in another way. Susie, we were committed from the very beginning to making sure that the executive team and our chairman were part of helping to fund this hide care fund through forgoing salary or reducing salaries. And we were early the first company to commit to that in our industry. So our minds are very much focused on continuing to stay focused on caring for our colleagues. And I would say that as this unfolds, that is our primary driver and motivator for our decision making. So we will consider all ways in which we can provide resources to our colleagues. If this crisis drags on, how can you prevent layoffs? Could that be in your future? We don't see that as a reasonable expectation at this point because we believe that this crisis will have a term associated with it that is measured in a couple of months as opposed to a year, if it did extend and we had We had guidelines that are in place right now, including shelter at home and restrictions on travel that are pretty severe. If that persisted for as much as a year, then I would say we we'd have to really reconsider a lot of things. So looking ahead, Mark, how long do you think it's gonna take until the travel business comes back? yeah, that's a that's a great question. I don't, of course know for sure. But what we've seen in prior downturns is that travel is one of the first things that does come back because there's always this desire to get out and and engage, whether that's businesses that are looking to engage with customers or their fellow colleagues. All people who want to take, you know, vacation, I think people are going to be looking to get back on the road. The key for us is, I think that we're going to be start restarting our operations and ramping back up before there's a vaccine, which means that we have to really think hard about our processes and procedures, how we reopen hotels, so that we instil confidence And are able again to reassemble the Hyatt family and care for everyone who comes to us. To what extent do you think that people will hold off on those vacations and business travel until there is a vaccine that could take a year or two Yes, I think it's possible that the travel will be somewhat diminished over the coming year. I don't I believe though, that we will be able to come come up with and and be able to instill confidence through the procedures that we use in order to operate our hotels. In a way that that assures people that it's safe to be there. And I do believe that there's a tremendous level of desire to get back on the road. And finally, Mark, what about you? How has this crisis changed you your priorities, the way you run the business, the way you live? Well, I can tell you that this has been the most challenging period of time I've ever had in my professional life. The strain of feeling the responsibility for so many members of the family has been extreme. And added to that or side by side with that, is also some personal strain thinking about my family. I have a mother who's 96 and thankfully doing well. So I feel these overlapping sources of strain. Most importantly, the sense of humanity that I have seen poured out across the family has been extraordinary sense of care and kindness and extension of assistance. From every one of our colleagues, even those who have been furloughed to help others, has been inspiring and humbling at the same time. And to me, that is actually what gives me super confidence in the future. I think once we can get back to work and and tap into that life force, that humanity that it's within the family That's what gives me confidence about a great future. [ BLANK_AUDIO ]

Mark Hoplamazian says it's difficult balancing employee needs and shareholder interests.

Hyatt CEO on coronavirus: "The most challenging period of time in my professional life"

Leadership

Hoplamazian has donated his salary to furloughed employees.