Travel

Expedia cuts 12% of its workforce; Booking forecasts 3% to 7% falloff in revenue

Amid the coronavirus outbreak, giants from the travel sector announce restructuring plans

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  • Expedia’s chairman Barry Diller said that the company had become “sclerotic and bloated”;
  • Booking Holdings, CEO Glenn Fogel, in his turn, said the company will be emphasizing cost-containments in 2020.

This week, two major groups in the travel industry announced restructuring plans and cost reductions. The announcements came not only because of the growing competition in the sector, but also because of the coronavirus epidemic, which, according to the World Health Organization (WHO) data of this Friday (28), has already reached 47 countries in addition to China.

On the 25th, the Expedia Group, one of the largest in the world in the field of tourism, with a portfolio of brands that gathers from its eponymous platform Expedia to companies such as Hotels.com, Egencia, trivago, Vrbo and HomeAway, announced that it will cut 3,000 jobs (12% of its workforce).

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According to the Financial Times, the company said in an email to staff that it will “reduce and eliminate certain projects, activities, teams, and roles to streamline and focus our organisation.”

The restructuring comes after a battle between former CEO Mark Okerstrom and chief financial officer Alan Pickerill and its chairman Barry Diller over the company’s strategy.

According to FT, at the time, Diller said that Okerstrom had led the company to a loss of focus. In this month’s earnings conference call, Diller added that Expedia had become “sclerotic and bloated” and that it was “all life and no work”. “We are stopping doing dumb things and starting doing what we think are good things,” he said.

Expedia expects the coronavirus epidemic to result in losses of between $30 million and $ 40 million.

Another tourism giant, that brings together brands like Booking.com and Kayak, Booking Holdings announced on the 26th that it expects a 5% to 10% drop in room nights booked in the first quarter, from 10% to 15% decline in gross travel bookings, and a 3% to 7% falloff in revenue. The information is from Skift.

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The company said the most significant impact occurs in China, followed by the Asia-Pacific region. There was also a slight drop in European bookings after the virus entered Italy (the country has 888 confirmed confirmed according to WHO’s data from this Friday, 28).

In a conference call with analysts, Booking Holdings CEO Glenn Fogel said the company will be emphasizing cost-containments in 2020, but unlike Expedia, he did not indicate how exactly the company would do this.

It was also mentioned that the company will seek greater synergy between the platforms it owns, but it was not clear exactly how. Today, the different Booking channels operate independently.