After a "disappointing" year in 2019, Expedia
Across the business, Expedia hopes to cut $300 million to $500 million in costs. Expedia reported adjusted fourth quarter earnings of $185 million.
"We recognize that we have been pursuing growth in an unhealthy and undisciplined way," company executives wrote in an internal email to employees. The change was telegraphed in call with investors earlier in February during which Expedia's chairman, Barry Diller, said the company had become "sclerotic and bloated".
Expedia's Chief Executive Officer and Chief Financial Officer both stepped down in December. According to Diller, this was due to disagreements between the board and management over the company's strategy. Diller and Vice Chairman Peter Kern stepped in to manage the company's day-to-day operations.
"Since our management change in December, we have re-focused the company on our core operations, which had suffered for much of 2019," Diller said when the company's fourth-quarter earnings report was released. "We have rapidly moved to simplify how we operate and increase efficiency. These changes helped us exceed the high-end of our revised guidance range in 2019 and will contribute to accelerated profit growth in our underlying business in 2020."
Amid the chaos of the coronavirus, travel companies like Expedia are being hit hard. American Airlines
After the swine flu outbreak of 2009, travel agency Travel Horizons surveyed 2,644 American travelers to see how much a global health scare affects travel plans. Only 10% said they would cancel their plans, but a third said they would change their plans. The largest portion considered postponing travel, a trend analysts predicted for travelers during the coronavirus outbreak.
If travelers simply postpone trips, that revenue can still be made up. Originally, analysts expected the virus to be contained in time for that "bounce" to come sometime this summer, but with the virus' spread becoming more alarming every day, it now seems more likely that those sales will simply be lost.