SINGAPORE, 22 April 2020: Considered one of the most profitable companies based in the Netherlands, Booking.com is asking for help to pay salaries according to a report in Dutch News 17 April.
It asked for government support after travel and hotel bookings “plunged to just 15% of those recorded a year ago”, according to media outlets Volkskrant and the Financieele Dagblad.
Booking.com has more than 5,500 workers in the Netherlands and an IT workforce comprising 80 different nationalities. The worldwide workforce exceeds 18,000.
The company, founded in Enschede in 1996 was taken over by US giant Priceline that booked a net profit of USD4.9 billion last year. Like many corporations in Europe, the Covid-19 crisis and lockdown have sapped capital and depleted earnings requiring major corporations in the EU to seek government assistance or even bailouts.
In related comments, the Silicon Canals newsletter, 17 April, made reference to a video meeting between Booking.com CEO, Glenn Fogel, and staff. He reportedly 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.”
Until the Covid-19 crisis hit, Booking.com was highly profitable. In 2019 it recorded a profit of nearly USD5 billion (EUR4.6 billion). However, the hospitality segment has hit rock bottom with room bookings down by 85%.
According to the Silicon Canals report, Booking.com has borrowed USD4 billion (EUR3.68 billion) in recent weeks. In the prospectus accompanying that loan, the company said it was confident that with the government’s additional help, it has sufficient liquidity to meet costs 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 turns around.
Last month, Booking Holdings Inc (NASDAQ: BKNG) announced that it was withdrawing its previously-announced first-quarter 2020 financial guidance as a result of the worsening impact of the COVID-19 outbreak on travel demand.
In that update, Fogel said, “As we explained when we provided first quarter 2020 guidance during our fourth-quarter earnings announcement 26 February 26, 2020, the circumstances of the COVID-19 outbreak are changing rapidly, and our guidance was based on the information we had at the time.
“As the situation has worsened and the negative impact on travel demand has increased … we are unable at this time to reliably quantify the impact of the Covid-19 outbreak on our future financial results.
Fogel continued: “While the full impact and duration of the Covid-19 outbreak remain unknown at this time, we have been through travel disruptions in the past and expect that this disruption will ultimately be temporary. We believe the company has a strong operating model and a solid balance sheet.”
