Both of Barry Diller's companies, IAC and Expedia, are now invested in a travel recovery, which he thinks will arrive in only a matter of time. Count Diller on the side of those who believe the new normal will resemble its former self more than many people imagine.
Barry Diller said his IAC “could not say no” to taking a $1 billion minority stake in MGM Resorts last month while his travel company, Expedia Group, which lost 95 percent of its business at the peak of the pandemic, went out looking for financing.
The respective appetites for mergers and acquisitions at IAC and Expedia Group are a tale of two cities, Diller said.
“Expedia has not been interested in any outside investment,” Diller told Skift Editor-in-Chief Tom Lowry, kicking off the opening event at the online Skift Global Forum Monday. “On the IAC side, we are interested in everything that walks, and we still have a huge amount of capital left, and we are going through our process.”
Asked which sectors he finds most attractive as investments for now, Diller responded, “I don’t do sectors,” meaning he focuses on investment opportunities with a wider lens.
Diller said IAC, flush with around $4.3 billion in cash at the end of the second quarter, researched investing in MGM Resorts International for around six months, and saw great properties, “superb management,” and a huge opportunity in online sports and casino gambling.
“God knows, I would not have asked for this to be our entry, but what happened to worldwide travel allowed (IAC) to enter (and) invest in MGM (Resorts) at what we consider to be a more than reasonable price,” said Diller, who now has a seat on the MGM board. “As an investment I have less than nothing to worry about in terms of it being money good.”
IAC, which owns more than 40 brands, including Vimeo, Dotdash and Care.com, is awash in cash, on the prowl for investments and acquisitions, and saw its virtual businesses boom during the pandemic, Diller said.
Expedia Went Looking for Financing
However, as the travel environment collapsed, at Expedia, “we went out and debted ourselves up” so the company could survive under all potential scenarios, Diller said. He added that Expedia raised $6-$8 billion.
Diller, who decades ago served as the chairman and CEO of Paramount Pictures, Fox, and QVC, is chairman and senior executive of both IAC and Expedia Group, two public companies that operate independently. IAC spun out Expedia into a public company in 2005.
Travel Will ‘Substantially’ Return
Although there will be changes in the way people travel because of tech advances like virtual meetings, Diller argued that in travel “everything substantially will return” once there is a “date certain” that prohibitions have ended. He initially thought that timing might be around June 2021, but now thinks it will take a little longer.
Diller recalled making a deal at IAC to acquire Expedia before September 11, 2001, and then the IAC board wondered if it should back out of the merger. He remembered someone in the room saying, “If there’s life, there’s travel.”
IAC went ahead and acquired Expedia, but it did back out of another pending acquisition for NLG, a major cruise and vacation seller, at the time.
Diversity and the Presidential Election
Diller offer thoughts on two other current issues, diversity and the presidential election.
He said Expedia Group hired a senior executive with vast experience to work on the diversity issue while IAC developed a fellows program because the company was sick about its failure to populate the company with minority employees at all levels.
Unlike past crises, Diller said, “We are at work on this and it will never stop.”
He added that the presidential election is the most important one of his lifetime, and it affects “everything.”
He characterized the election as an “anvil over our heads.”
Diller didn’t specifically say he supported Biden-Harris over President Trump — but that’s what he meant.
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Photo credit: Barry Diller, chairman and senior executive at Expedia Group and IAC, was interviewed for Skift Global Forum on September 21, 2020. He's pictured at a World Travel & Tourism Council summit on April 7, 2016. World Travel and Tourism Council