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Rockets owner Tilman Fertitta backtracks, won't cut employee benefits at hotel amid coronavirus crisis

Jack Baer
Writer

A posh hotel owned by Houston Rockets owner Tilman Fertitta has changed course after previously notifying employees that their benefits would be cut as the coronavirus outbreak continues in the United States, the Houston Chronicle reports.

The reversal came after a swift online backlash decrying the harm workers at the Post Oak Hotel would feel in order to support the billionaire’s bottom line.

Employees were reportedly informed of the decision by a memo earlier this week. Now, Kelly Roberts, the chief administration officer of Fertitta’s hospitality company, told the Chronicle that no hourly or salaried employees have lost their jobs at the hotel.

However, Roberts reportedly said employee pay and benefits would only be maintained until June 30, 2020, barring the resumption of normal hours. Roberts also said that hourly employees whose work has been cut will be able to make it up in their vacation pay.

Coronavirus creating tough times for hospitality industry

One of the industries hit hardest by the coronavirus has been the hospitality industry, where Fertitta has accrued billions in wealth over the years.

According to Axios, the American Hotel and Lodging Association forecasts that some 45 percent of all hotel jobs have been eliminated or will be eliminated in the coming weeks, thanks to a predicted 30 percent drop in hotel occupancy over the entire year.

Such a loss would equate to nearly 4 million jobs. In response, industry leaders are seeking a $250 billion bailout to keep the industry afloat and pay off suppliers.

The restaurant industry has been similarly hit as dine-in restaurants have been shuttered across the country and entire cities are told to stay at home. Fertitta \][pimself said on CNBC earlier this month that his global restaurant and hotel business is down $1 million a day from a base of $12 million a day in restaurant sales.

From the Chronicle:

"But remember, that last million in sales is your most profitable," he said on CNBC, which airs his reality show "Billion Dollar Buyer." "That's where your heavy profit is, so if you don't cut expenses than what can you cut? We're not going to cut the quality of the product. You can only cut labor."

While losing a “heavy profit” might be regrettable for Fertitta, he likely won’t have to face more dire worries like rent and healthcare as hours are cut like some of his employees.

Fertitta also reportedly complained of such a hit to ESPN’s Ramona Shelburne, as well as the one he took during the China backlash earlier this season that feels like so many years ago.

Rockets employees will be supported

While employees at Fertitta’s hotel faced a scary situation, the Rockets employees will reportedly be more secure.

Team CEO Tad Brown told the Chronicle on Friday that hourly employees at the Toyota Center will be addressed as the arena stays empty:

“We are putting those plans together right now,” Brown said. “As we always have in times of crises, we will take care of our part-time employees as well as all of our employees. We’re working internally to identify the best course going forward. But we are taking care of them.”

The decision falls in line with the broader trend of the sports industry supporting employees facing a sudden loss of income as events are canceled or postponed.

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