With Travel at Historic Low, Investors Buy Billion-Dollar Stake in Expedia


How does a little holiday in the Scottish highlands sound lovely? Even during this lockdown plenty of people thought so and reserve properties for rent on the global travel website booking dot com in fact so many tourists continue to putter about the Scottish countryside that it alarmed the locals like rural residents all over they feared travelers might bring Kobe. Nineteen with them at overwhelmed. Small hospitals and so in Blackford. The areas presumably exasperated member of parliament asked booking dot com to quit offering reservations for the bucolic countryside. Finally last week the giant travel company complied. Now you can't get a reservation at a cottage in the Scottish highlands until may ninth or later at least not on booking dot com so reports the Scottish newspaper the National. So why am I telling you this? Little story well because it offers a small taste of the big problems facing the travel industry like so many other industries. Covert nineteen is upended everyone in the travel business from tiny. Bnb's to the largest players that's especially true of booking dot coms biggest rival expedia travel and its parent company. Expedia group in addition to owning. Its namesake reservation site. Expedia group owns other household. Names including travelocity ORBITZ HOTELS DOT COM B. R. B. O. And home away just to name a few the multibillion dollar travel conglomerate however is far less steady than it had appeared to be back in December it ousted. Ceo REPORTEDLY DUE TO DISAGREEMENTS WITH CHAIRMAN. Buried diller and the board over Corporate Strategy Diller who also runs entertainment giant. I A C took over day to day responsibilities along with board vice-chair Peter Kern in February prior to the couvert nineteen onslaught in the US. The company announced what it called disappointing twenty nineteen earnings. It announced plans to lay off three thousand people or about twelve percent of its workforce at the time diller called the company's Sclerotic in bloated sclerotic by the way means rigid or slow to change. Not exactly a compliment. He planned to streamline the business which he believed had become too large and complex by the end of February. The company had put plans in place to save three hundred to five hundred million expenses annually and then the virus which had already been wreaking havoc globally hit the US hard. The effect on the travel industry is beyond devastating the US Travel Association estimates losses of more than five hundred billion dollars in direct travel spending. That's nine times worse than the impact on the travel industry after nine eleven according to Forbes sadly the travel association predicts more than eight million. Us travel industry workers will have lost their jobs by the end of this month. And if the pandemic is devastating most businesses those with fragile foundations like expedia are scrambling to ensure they'll survive last week. Expedia received a promise of a rescue package to private equity firms Apollo global management and silverlake are buying a stake in the company for one point. Two billion dollars that alone however may not be enough to help it withstand the travel slump. So expedia is also borrowing another two billion dollars to give it more liquidity. The company says along with announcing the deal expedia also named Peter Kern as CEO observers say. Kern who has roots in private equity will be well suited to the moment meaning. He'll be comfortable cutting jobs and expenses. The big question of course is not just who will survive. But who will thrive after the pandemic crisis abates and investment in a travel business? Even at CEO prices could be seen as a positive sign. Long-term read Raymond a partner at Apollo Management said in a statement. Expedient is a world class company with an unparalleled collection of online travel brands. He added that the firm which will take a seat on expedience. Board looks forward to collaborating on expedia growth and innovation

Coming up next