The entire world has almost come to a halt due to the coronavirus pandemic. Countries are on lockdown, the economy is taking a hit with various industries sealed off and the government is trying to figure out how to get ahead of the situation. It doesn’t really come as a surprise that businesses that were just recently highly successful are now on the verge of going under.
While all the industries across the globe are wrestling with all kinds of issues, one industry which has been hit the hardest is the travel industry. This is because many countries, including Italy, France, Spain, the US and more have closed borders to stop the spread of the virus, or have placed extra restrictions on arrivals. Take a look at our exclusive report on the matter, when we spoke to 4 European travel tech startups on how they’re coping up with the impact of coronavirus pandemic.
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One such company that is currently struggling from the coronavirus fallout is another big name in the travel industry, Booking.com. One of the most profitable companies in The Netherlands, before the coronavirus crisis is now reportedly turning to the government for support. As per a report by de Volkskrant, the travel tech giant is facing huge losses in the wake of COVID-19 and is seeking state aid to lessen the blow on its employees.
Booking.com adopting hopeful solutions
It’s not easy to run a huge business while taking notable losses. Like multiple other companies, Booking.com is also going through the same dilemma and instead of taking drastic steps, the Netherlands-based travel tech giant is looking for hopeful solutions.
Reportedly, during a video meeting with his staff, Booking.com CEO Glenn Fogel said, “We are grateful to the Dutch government for this financial aid plan for companies like us that have been severely affected by the pandemic.”
When asked whether layoffs will be made at the Netherlands’ largest job machine of the decade, he answered ‘probably yes’. Fogel, who just recovered from coronavirus himself, said, “We’re only doing 15 percent of what we did last year.”
“We will use all state aid, everything we can do to limit the impact on our staff,” he added.
Booking.com operates globally and with over ten years of operations, the company expanded its operations and garnered over 18,000 employees worldwide of which, approximately 5,500 work in the Netherlands. It is looking to make use of the NOW scheme by the Dutch government that would cover 90 percent of costs for its 5,500 employees. However, the company had to let go off 48 customer service employees who were still in their probationary period, the report claims.
Sufficient liquidity until end of 2021
Till the coronavirus crisis hit, Booking.com was quite profitable. In 2019, it bought back $8 billion (€7.36 billion) in treasury shares, the FD reports. Additionally, the report states that just last year, it was able to make multibillion-dollar profits of nearly $5 billion (€4.6 billion). However, the situation of the hospitality segment is dismal with room bookings down by 85 percent and significantly reduction in prices.
Due to the current situation, Booking.com has already borrowed $4 billion (€3.68 billion) in recent weeks. In the prospectus accompanying that loan, the company is confident that with the government’s help, it has sufficient liquidity to stay existent until the end of 2021. In a press statement, Booking.com thanked the government for its support and said that it can now prevent layoffs and get its short-term financing in order to quickly start on the road to recovery, as soon as the travel market recovers.
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