The ethics of travel companies continuing to do business in Russia: Travel Weekly

Arnie Weissman

Arnie Weissman

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

Marriott and InterContinental Hotel Group (IHG) announced in mid-March that it was closing its Moscow headquarters and would suspend new openings, future development activities and investments in Russia. Likewise, hilton has closed its headquarters and is also suspending all new development activity. Yet hotels in Russia continue to operate under the flags of the three companies.

On April 15, Hyattwhich has just five hotels in Russia and previously said it would suspend development and new investment there, announced it would end service at one property in Sochi (meaning guests won’t cannot access World of Hyatt benefits) and that it was ceasing its “association, contracts and relationship” with Hyatt Regency Moscow Petrovsky Park.

best western went the furthest, suspending all participation in Russia, where it has five franchisees.

Many of these same companies announced war-related humanitarian relief: Marriott earmarked $1 million to support war-affected employees; Hyatt provided housing for refugees across Europe; IHG has also donated overnight stays and also contributed financially to the Red Cross and Red Crescent.

Hilton, in partnership with American Express, has donated one million room nights for refugees and those supporting humanitarian efforts. Hilton said he would also donate all profits from business operations in Russia to humanitarian relief efforts.

Although Accor has suspended openings and halted services and distribution of its hotels in Russia, CEO Sébastien Bazin, speaking at the Skift Forum Europe on March 24, defended his company’s choice to nevertheless leave its hotels remain open in Russia. He noted the company’s 50-year tradition of neutrality; the importance of maintaining accommodations for Western media, non-governmental organizations (NGOs) and diplomats performing their duties in Russia; and the need to distinguish Russian citizens employed by Accor from the actions of the Russian state and the imperative to ensure their continued employment.

Ukrainian travel trade associations, however, want nothing less than a complete withdrawal and have openly criticized anyone who stops there. Sidletska and Oleskiv rejected each of Bazin’s points in detail. Their arguments can be summed up as follows:

  • A precedence of neutrality is a weak argument for addressing an event parallel to Nazism, which preceded the founding of Accor. Would France-based Accor have remained neutral, they ask, as World War II broke out? Would they welcome the Nazi elite to their Black Forest spas after Germany invaded France?
  • A single hotel in Moscow would be enough to accommodate the dwindling number of media and NGOs who have not left or been kicked out under restrictive rules.
  • The majority of hotel staff are not Accor employees but work for the hotel owner and may be retained regardless of the hotel flag.

Ukrainian travel associations are not calling for a boycott of these companies but are seeking to put pressure on them through a conscience call to fully participate in the sanctions against Russia.

They say that whatever business difficulties the hotel companies face, they pale in comparison to the hardship and horror that Ukrainians are experiencing. They suggest that companies, like individuals, make choices that contribute to or frustrate responsible outcomes.

Although travel boycotts as a means of protest are not necessarily effective, as we saw in our March 7 cover story (“The Boycott Dilemma”), the coordinated global economic sanctions imposed on Russia appear to exert pressure on the Russian economy, a key pillar of the Western coalition’s efforts to end the war.

Given the unique relationships between hotel management companies and hotel owners, there is no doubt that extracting a hotel brand from Russia would be trickier than, for example, a global retail brand. .

Neither Best Western nor Hyatt, which appear to have taken the most concrete steps to exit Russia, have a large footprint there. These brands each own about a fifth of the 25 Hilton properties, 26 Marriott properties and 28 IHG properties, and only about a tenth of the 53 Accor properties.

But nonetheless, Best Western and Hyatt have shown it can be done. The fact that Hyatt only fully withdrew from one property and partially from another may indicate that each individual property deal presents a different degree of difficulty. Marriott and IHG said they are reviewing the contracts.

Given these complexities, perhaps additional takedown announcements, citing disengagement with individual properties, will be coming, incrementally, as attorneys work out the issues.

I hope to hear about other withdrawals. Western economic sanctions rely on the cooperation of Western-based global corporations, and among those corporations, I am not convinced that hospitality should be exempt.