HotelsNot every Western hotel group has pulled out from Russia, and Ukrainian travel associations have hit out at these chains for their unethical stances.

Why are global hotel chains still operating in Russia?

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Mercure Moscow Paveletskaya, an Accor property in Russia.
Mercure Moscow Paveletskaya, an Accor property in Russia.

I recently received an email from Iryna Sidletska, president of the Ukrainian Hotel & Resort Association, and Mariana Oleskiv, chairperson of the State Agency for Tourism Development of Ukraine. In it, they make a case that all global hotel brands should join other Western companies in pulling out of Russia completely, in protest of its attack on Ukraine.

Marriott and InterContinental Hotels Group (IHG) announced in mid-March that they were closing their corporate offices in Moscow and would put new openings, future development activity and investment in Russia on hold. Similarly, Hilton closed its corporate office and is also suspending new development activity. Still, hotels in Russia continue to operate under all three companies' flags.

On 15 April, Hyatt, which has only five hotels in Russia and had earlier said it would suspend development and new investments there, announced it will end service provisions at a property in Sochi (meaning guests can't access World of Hyatt benefits) and that it was ceasing "association, contracts and relationships" with the Hyatt Regency Moscow Petrovsky Park.

Best Western has gone the furthest, suspending all participation in Russia, where it has five franchisees.

Many of these same companies have announced war-related humanitarian assistance: Marriott earmarked US$1 million to support employees impacted by the war; Hyatt has been providing accommodations for refugees across Europe; IHG has donated room nights, as well, and has also contributed money to the Red Cross and Red Crescent.

Hilton, in partnership with American Express, has donated 1 million room nights for refugees and those supporting humanitarian efforts. Hilton said it will also donate any profits from business operations in Russia to humanitarian relief efforts.

Although Accor suspended openings and stopped services and distribution to its hotels in Russia, CEO Sebastien Bazin, speaking at the Skift Forum Europe on 24 March, defended his company's choice to nonetheless allow its hotels to remain open in Russia. He noted the company's 50-year tradition of neutrality; the importance of maintaining accommodations for Western media, nongovernmental organisations (NGOs) and diplomats as they carry out duties in Russia; and the need to distinguish Russian citizens employed by Accor from the actions of the Russian state and the imperative to provide them with continued employment.

The Ukrainian professional travel associations, however, want nothing less than complete withdrawal and have openly criticised anyone stopping short of that. Sidletska and Oleskiv rejected each of Bazin's points in detail. Their arguments can be summed up thusly:

  • A precedence of neutrality is a weak argument for addressing an event that parallels Nazism, which predated Accor's founding. Would France-based Accor have remained neutral, they ask, as World War II broke out?
  • Would they host the Nazi elite in their Black Forest spas after Germany invaded France?
  • Just one hotel in Moscow would be sufficient to host the dwindling number of media and NGOs who haven't left or been forced out under increasingly restrictive rules.
  • The majority of hotel staff are not Accor employees but work for the hotel's owner and can be retained regardless of which flag the hotel flies.

The Ukrainian travel associations are not calling for a boycott of these companies but are seeking to pressure them with a call to conscience to participate completely in sanctions against Russia.

They assert that whatever business difficulties the hospitality companies encounter while pulling out pale compared to the difficulties and horror that Ukrainians are experiencing. They suggest that corporations, like individuals, make choices that either contribute to or work against responsible outcomes.

Although travel boycotts as a means of protest are not necessarily effective, as was discussed in this Travel Weekly story, "The boycott dilemma", the coordinated global economic sanctions being imposed on Russia do appear to put pressure on the Russian economy, a critical pillar in the Western coalition's efforts to end the war.

Given the unique relationships between hotel management companies and hotel ownership, there's no doubt that extricating a hotel brand from Russia would be thornier than would, say, a global retail brand.

Neither Best Western nor Hyatt, which appear to have taken the most concrete steps to quit Russia, have large footprints there. Those brands each have about a fifth of Hilton's 25, Marriott's 26 and IHG's 28 locations, and only about a tenth of Accor's 53 properties.

But nevertheless, Best Western and Hyatt have shown it can be done. That Hyatt has only withdrawn fully from one property and partially from another may indicate that each individual ownership contract presents a different degree of difficulty. Marriott and IHG have said they are reviewing contracts.

Given these complexities, perhaps additional withdrawal announcements, citing disengagement with individual properties, will be forthcoming, rolling out incrementally, as lawyers work through the issues.

I hope to hear about more withdrawals. The West's economic sanctions rely on the cooperation of Western-based global companies, and among these companies, I'm not convinced that hospitality should be exempt.

Source: Travel Weekly

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