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My key takeaways from this past week’s Expedia call are below:
Highlights from the recently announced sale of Expedia’s corporate travel platform, Egencia, to Amex GBT include (i) Expedia eventually owning approximately 14 percent of the combined businesses post-closing – which Expedia assumes will be worth $700 million and (ii) the deal comprising a long-term supply agreement between Expedia Partner Services (EPS) and Amex GBT, which according to Expedia CEO, Peter Kern, underscores EPS’ continuing efforts to position itself as a B2B business platform and allow Expedia to focus on its core B2C and B2B businesses.
Over the past quarter, Expedia has shifted its perspective on marketing – moving from an initial bias against large marketing commitments early in the quarter to now making major investments in an attempt to get out ahead of the anticipated wave of travel demand. Expedia, Orbitz and Vrbo are the initial beneficiaries of this new marketing commitment.
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TMC acquisitions, mergers and failures have been a feature of the Covid pandemic that has devastated the business travel industry, but last week’s deals took industry consolidation to a new level.
The first saw American Express Global Business Travel (GBT), a legacy TMC well versed in scaling up through acquisition, announce a binding offer to bring Expedia-owned Egencia into its stable.
GBT has already acquired New York-based Ovation Travel Group this year and, most notably, bought HRG in 2018 in a deal that saw it become the UK’s largest TMC. Also established as the world’s largest TMC, the addition of Egencia – which is thought to be the world’s fourth or fifth largest TMC – gives GBT an incredibly dominant position.
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In a court-sanctioned auction process, the Knighthead Capital Management, Certares Opportunities and Apollo Capital Management won a court-approved auction to lead Hertz out of Chapter 11 bankruptcy.
The group, subject to a bankruptcy court hearing slated for Friday, would fund $2.9 billion of stock investments in Hertz, issue $1.5 billion in preferred stock to Apollo, and execute an offering of $1.63 billion of common stock for existing Hertz shareholders.
The deal announced Wednesday is the culmination of a bidding war that began in early March between the Knighthead Capital Management-Certares Management group and rivals Centerbridge Partners, Warburg Pincus and Dundon Capital Partners, which each traded a couple of rival bids. At various junctures, the competing bids received the blessing of Hertz management.
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This story is part of The Road Ahead, a series that examines the future of travel and how we’ll experience the world after the pandemic.
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In 2019, Salesforce employees traveled so much for work that they generated a combined 146,000 metric tons of CO2 emissions. That’s the same amount emitted by 17,500 homes over the course of an entire year; it would take more than 178,000 acres of forest 12 months to sequester that carbon dioxide. Even as Salesforce worked to reduce its overall carbon footprint, its business travel emissions were rapidly increasing up nearly 18% from 2017.
In 2020, everything changed: The company’s total business travel emissions dropped 86% to just 20,000 metric tons, according to its fiscal year 2021 stakeholder impact report. What had changed, of course, was the sudden halting of all travel due to COVID-19. (Salesforce’s 2021 fiscal year covers February 2020 to January 2021.)