Here they come… In what promises to be worse than a horror movie, the tourism industry is clearly showing how it is struggling with the effects of the coronavirus. And this is only the beginning; as most of the countries starting to get out of the confinement period have still placed on pause most of the actors of the industry. The duration of their inactivity is still undefined. Still, there is good news coming through these dark clouds.
Who Will Survive?
It is hard to imagine how the situation will be, in regions where tourism is the most important industry, once it can finally reopen. Will travellers feel antsy and jump on a plane as soon as they can or will they be worried to travel, afraid of a Round Number 2 with the COVID-19? This, of course, will influence everything else, including the costs of plane tickets, hotels and car rentals.
In online news magazine today, you could already feel the tension rising as some of the largest groups from the industry made announcements regarding their future. The larger the revenues; the larger the problems you have to solve.
Good News from Expedia
Expedia brought up its survival instinct and went out to find the money it needed to survive. The online booking travel company has secured 3.2 billion dollars of fresh money, just so it could make it through the pandemic. Out of that amount, 1.2 billion came from Apollo Global Management and Silver Lake private equity firms. This crisis could not have come at a more complex time for this industry giant as the company let go of its CEO and CFO last December, following disagreements on the strategy to move Expedia forward in the future.
However, as good news usually comes in pairs, the company announced, along with the injection of new capital, that it has finally replaced their leaders. Moreover, both of them have accepted not to receive any salary this year, along with all other members of the board. This will enable Expedia to keep the new funds in cash, for survival purposes and to reconstruct the whole platform once they see the light at the end of the tunnel with the pandemic.
Lufthansa Needs Help
In another announcement, Lufthansa has sounded the alarm, reporting losses of 1.2 billion euros for the first three months of 2020 and indicating that it would need help from the governments within the next few weeks, if it was to survive. The company who has already asked for assistance from Germany, Austria, Belgium and Switzerland, clearly stated that the loss would be much bigger for the second quarter and that their 4.4 billion left in liquidity would not be enough to cover them, the customers refunds and the cancelled flights.