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Thursday 6 August, 2020
TOP STORY
Booking.com slashes 25 per cent of global workforce
Booking.com is to lay off 25 per cent of its global workforce, affecting an estimated 4000 employees, just four months after landing a $4 billion loan to navigate the Covid-19 crisis.
If you missed our last newsletter....
1. Expedia's second quarter bookings drop 90 per cent
2. Furniture rental startup Føerni launches in Hong Kong
3. Traveloka raises $250m to boost travel confidence
4. Join our LinkedIn group here
5. Landing expands network and leadership team
Editor's comment
06•08•20 Welcome to the latest ShortTermRentalz newsletter!
• The latest bombshell to rock the travel sector arrived on Tuesday when it was announced that Booking.com was slashing around 4000 jobs, or 25 per cent of its global workforce, following on from similarly devastating cuts at online travel agency rivals such as Airbnb and Expedia.
Expedia cut 3000 jobs in February and announced that its second quarter bookings had dropped 90 per cent on 2019 figures, while Airbnb laid off 1900 employees and scaled back its investment in transportation and luxury business ventures. Booking is yet to reveal the details of which and how many workers will be affected but the redundancies come just four months after it landed a $4 billion loan with Dutch government aid.
But looking beyond the job losses alone, it is revealing how the visions for post-pandemic travel vary across the OTAs and the approach each is likely to take in terms of promoting vacation rentals on their platforms.
Airbnb CEO Brian Chesky has repeatedly pointed towards a “redistribution of where people travel”, whereby travellers will visit less well-known destinations over bustling tourist hubs.
Peter Kern predicted the vacation rental sector was in for a "bumpy and inconsistent recovery", however he will have been encouraged by the resurgence of Expedia's rental unit Vrbo, whose bookings improved markedly in June compared to an 85 per cent decline in March and April on 2019 figures. As interest in domestic bookings in non-urban locations rises, Expedia looks set to turn to Vrbo to revive its fortunes.
While details are scarce on Booking.com's cuts, the sheer scale of the reported redundancies suggests CEO Glenn Fogel does not expect the rate of recovery in travel to be as swift as we hope. In May, CNBC reported that Booking.com had $9 billion of funds in reserve after the $4 billion loan, but the seismic restructuring of the organisation implies the company is planning for further downturns as the peak season dies down.
With Google emerging as a more visible booking engine and Asian OTAs such as Traveloka strengthening their brands, market competition across the channels only looks set to accelerate.
If you'd like to hear more about how the pandemic has affected distribution, you can watch the recording of the latest Urban Living webinar session distribution disruption - will the OTAs bounce back? here.
• Don't forget to register for our next in our Urban Living webinar series, which takes place on Wednesday 12 August at 14:00 BST, when the panel will be discussing money v meaning [social purpose] and the role of ESG in the investment case mix. Adam Maclennan, managing director, head of UK and Ireland, PKF, hotelexperts, will be the guest host.
Joining Maclennan for the discussion will be:
• Richard Berridge, Blackbird Real Estate Advisory
• James Fry, founder, Beyond Aparthotels
• Leslie Gent, head of responsible investing, Coutts
• Josh Littman, VP Development - Europe, SH Hotels and Resorts
Click here to register for the no cost webinar.
If you have a story you want us to tell the industry, please click here and get involved with the community by joining our ShortTermRentalz LinkedIn group here.
Paul Stevens, editor
paul@internationalhospitality.media
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