Continue Reading Below
The decision comes amid plans by the company to save costs, with Expedia’s "Travel Leadership Team" saying in its letter on Monday that Expedia has been "pursuing growth in an unhealthy and undisciplined way."
"Following our disappointing 2019 business performance and our change in senior-most management, the Travel Leadership Team has spent the last few months determining a better way forward. A major reason for our management change was the deep belief ... that while travel remains rich with opportunity, our Company needed a fresh and forward look at clarifying our strategy and simplifying our operations," the email read. "Moving forward, we will exert more discipline in setting priorities and allocating resources, simplify our business processes and inter-dependencies, raise the bar on performance standards, and demonstrate and demand accountability for results."
Expedia's former CEO Mark Okerstrom and chief financial officer Alan Pickerill both unexpectedly stepped down in December after the company's board grappled with a disagreement regarding business strategy.
"Since our management change in December, we have re-focused the company on our core operations, which had suffered for much of 2019," Expedia Chairman Barry Diller said in a Feb. 13 statement when the company's fourth-quarter earnings report was released. "We have rapidly moved to simplify how we operate and increase efficiency. These changes helped us exceed the high-end of our revised guidance range in 2019 and will contribute to accelerated profit growth in our underlying business in 2020."
Expedia was planning to cut $300 million to $500 million in costs across the business, Diller said.
Expedia reported adjusted earnings of $185 million, or $1.24 per share in the fourth quarter. Revenue for the quarter rose 7.4 percent to $2.75 billion.
"The actions we’re taking to simplify our business and drive cost efficiency will position Expedia Group for improved revenue growth and margin expansion for years to come," he added.
Diller slammed Expedia's work culture in a Feb. 14 earnings report phone call, saying the company was "sclerotic and bloated." and its employee culture was weighted too far away from work.
"Amazon was all work and no life ... and at Expedia, it was all life and no work," Diller said during the call. "That is not damning our employees. But for several years, we really lost clarity and discipline. So we’re changing a great deal."
Diller also noted that Expedia had plans to "recognize ... the full effect of coronavirus" in his Feb. 13 statement. The travel industry as a whole has since taken a few hits as the new virus appears in more countries.
Shares of American Airlines and Delta Airlines fell sharply on Monday, along with Wynn Resorts casino and MGM Resorts. Shares of Hilton, Hyatt and Marriott all took a tumble amid concerns over travel to both Asia and Europe after the new virus spread throughout Italy in less than a week.
It's not uncommon for the travel industry to plummet during a health scare. MMGY Global, a travel and tourism marketing agency, and travel agency Travel Horizons surveyed 2,644 American travelers in 2009 following the swine flu outbreak and found that a little over a third said they would change their plans. Fifteen percent said they would postpone trip plans until the outbreak subsided; 11 percent said they would choose another destination and just 10 percent said they would cancel their trip altogether.
This report contains material from previous FOX Business articles.