Two Travel Giants Raised $4 Billion to Ride Out the Pandemic. Only One Needed It.

For travelers looking to book a flight or hotel room, and Expedia . com look a lot alike. Yet the two fared very differently when the coronavirus pandemic shut down travel, thanks to different strategies behind their websites.

Revenue has plunged at both Booking Holdings Inc. and Expedia Group Inc. this year. Each company moved quickly to raise about $4 billion in the spring to navigate the crisis. Expedia ended the third quarter with double the debt it started the year with, while Booking wound up with a bigger cash cushion.

The cash imbalance illustrates how differently the two rivals operated their online travel services. Expedia often collected cash upfront from hotel travelers, and when those customers canceled, the company had to pay them back. By contrast, Booking didn’t charge upfront as often for hotel stays, so had less to refund when cancellations occurred.

With Covid-19 cases surging, some countries have imposed new restrictions and the Centers for Disease Control and Prevention has advised Americans not to travel for the Thanksgiving holiday. But executives at Booking and Expedia said earlier this month that they survived the worst of the pandemic and feel optimistic about news of promising vaccine candidates. The travel giants have ample cash reserves and have no plans to change business strategies, they said.

“If you run out of your cash, it’s like if you’re a human being and you run out of blood. You’re dead,” Booking Chief Executive Glenn Fogel said in an interview. Early on in the pandemic, he said, Booking executives started looking at financial models to estimate how much they needed to survive for one or two years with no revenue. Booking sold $4 billion worth of bonds in April.

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