While much of the talk these days is about digital nomads and remote workers, both Expedia Group and Booking Holdings have doubled down on commitments to brick and mortar headquarters. Which could mean that there may be real offices again after the pandemic.
From the precise pandemic toll on their short-term rental numbers to construction timetables and commitments to new physical headquarters during a largely remote-working period, Expedia Group and Booking Holdings laid out newsy tidbits and strategies in their second quarter financial filings. We picked some to highlight.
1. Both Expedia Group and Booking.com Are Committed to New Headquarters
Despite the remote-working trend, which accelerated during the pandemic, Expedia Group completed the $900 million construction of its Seattle, Washington headquarters in the second quarter of 2021 following Covid-related delays.
Employees started transitioning from the company’s prior digs in nearby Bellevue in late 2019. But that got interrupted by the pandemic. However, Expedia Group saw many of its area employees begin returning to headquarters last month.
Asked about the precise status of Expedia employees returning to corporate offices, a spokesperson said Wednesday “most Expedia Group offices are currently open for those who are able to come in, while maintaining flexibility and appropriate safety standards.”
The spokesperson added: “Due to evolving circumstances related to Covid-19, we are now targeting a broad return to the office on a hybrid basis in January 2022, dependent on guidance from local governments and health authorities. The well-being of our people is our priority, and we look forward to reuniting our global employee community when it is safe to do so.”
Meanwhile, Booking.com is slated to get a new headquarters in the Netherlands. The building’s construction is scheduled to be finished midway in 2022.
As with Expedia, the construction of Booking.com’s headquarters began in 2016. Parent company Booking Holdings was to pay around $321 million for this office building project, excluding a lease for the land.
Booking.com’s sister brand Rentalcars.com is likewise on track to get a new headquarters in Manchester, England by the end of September 2021.
2. Downsizing Alternative Accommodations
Both Expedia Group and Booking.com saw substantial reductions in their short-term rental inventory in the second quarter of 2021 versus a year earlier. It appears as though Booking.com was hit harder than Expedia but it’s difficult to say from their financial filings because they measure things differently, and there are other factors at play.
For example, Booking.com counted “homes, apartments and other unique places to stay” as properties, while Expedia Group cited its Vrbo unit’s “online bookable alternative accommodations listings.”
In addition, Booking Holdings stated Booking.com regularly removes alternative accommodations properties for things such as not providing availability or nonpayment of invoices.
Booking.com saw its alternative accommodations property numbers decline 7.2 percent to 1.95 million properties in the second quarter of 2021, although that figure amounted to an increase compared to the first quarter.
On the other hand, Vrbo’s ranks of alternative accommodations listings declined a more modest 4.76 percent to 2 million listings in the second quarter compared with the June quarter of 2020.
3. Expedia Group Is Moving Along With Disposing of Brands
In its most significant asset disposal in memory, other than the Tripadvisor spinoff in 2011, Expedia Group in early August accepted American Express Global Business Travel’s offer to acquire Expedia’s corporate travel unit, Egencia. Expedia would take a 14 percent stake in the world’ largest travel management company in a deal valued at around $750 million. The closing is expected later in 2021.
As detailed in its financial filing, Expedia sold vacation packager Classic Vacations, acquired in 2002, to private equity firm Najafi Companies in April. Expedia’s financial gain on the transaction is not material to its financials.
With Expedia seeking to simplify its plethora of holdings to focus on core businesses, it also sold its hotel operations app, Alice, to private equity firm Alpine Investors last month. Again, the deal won’t significantly impact Expedia’s balance sheet.
4. Hotel Tax Litigation Wanes
Starting in 2004, online travel agencies have been defendants in hotel tax lawsuits brought by cities, counties and states. In general, the plaintiffs have argued that online travel agencies should be remitting occupancy taxes on the full retail rate they offer rooms to consumers, and not merely on the lower net rate that Expedia gets from hotel companies to sell their rooms.
Expedia said there have been 103 such lawsuits filed over the years, and there are only 10 that are currently pending. However, Expedia is still subject to tax audits or inquiries, such as an ongoing one conducted by the City of Los Angeles, which was the first municipality to file a hotel tax lawsuit against the online travel agencies in 2004.
Booking Holdings, meanwhile, is subject to numerous value-added tax and rate parity litigation actions and regulatory inquires across Europe.
5. Expedia Settles Shareholder Lawsuit
Expedia said it has tentatively settled a shareholder lawsuit dating to 2019 that challenged senior executive Barry Diller’s potential voting control of the company after executing a merger with Liberty Expedia. Terms of the settlement have not been disclosed.
6. Booking.com Still Working to Repay More Government Grants
Under fire from some of its employees in Europe who challenged how Booking.com could accept Covid-related government assistance while firing about 25 percent of its workforce in 2020, the company said that it repaid about $137 million of that assistance as of June 30, and another $19 million after that.
“While not all such funds have been returned yet, we are working with various governments to voluntarily make repayments,” Booking Holdings stated.
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Tags: alternative accommodations, assets disposals, booking, coronavirus, covid, egencia, expedia, government assistance, headquarters, hotels, lawsuits, m&a, mergers, shareholder lawsuits, short-term rentals
Photo Credit: Expedia Group was expected to complete the delay construction of its Seattle, Washington headquarters during the second quarter of 2021. Booking.com and sister brand Rentalcars.com have new headquarters on the way, too. Expedia Group
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