What is happening at Expedia HQ?
That’s the question everyone is asking after a reported management restructure – some are calling it a purge – at Expedia-owned Hotels.com.
It has apparently resulted in the promotion of Johan Svanstrom, currently MD Asia-Pacific, to President, while other senior staff have lost their jobs.
But we don’t know for sure what’s going on because Expedia CEO Dara Khosrowshahi won’t say.
For some reason, the world’s largest online travel company has adopted a “tell them nothing” approach to the biggest changes in years at Hotels.com.
It is a very strange strategy with no apparent upside.
Expedia now has no control, or voice, in the debate swirling around the company.
Perhaps the action speaks to the defensive mindset of a CEO who is feeling the pressure.
No surprise there. The fact is Expedia hasn’t had a great few months.
It’s been under the spotlight since announcing a poor second quarter result in late July.
Net income was down -27% while costs were up 25%.
In addition it badly misjudged changes in an increasingly competitive market, in particular the switch to meta-search by TripAdvisor, which cost it bookings.
There were also issues at key discount brand Hotwire, where senior management changes were recently made.
And now the restructure at Hotels.com, which suggests something is amiss there, too.
According to Tnooz, the following people have left their jobs: David Roche (President, Global Lodging Group), Scott Booker (President, Hotels.com) Clive McTavish (CFO, Hotels.com) and John Connelly (VP Strategy, Global Lodging).
Skift.com reports Mr Khosrowshahi said the “Hotels.com ‘restructurings’ were part of consolidating supply functions under the Expedia brand”.
However, it was unable to elicit any further detail, prompting journalist Dennis Schaal to comment:
“Khosrowshahi and Expedia have not been candid about the management purge at Hotels.com, refusing to even state publicly who the new Hotels.com president is.
“All of this occurs several months after well-documented problems at sister company Hotwire, which also saw a change in leadership. Not a great confidence booster.”
Expedia’s silence has left an information void that’s now being filled with articles like this.
Further speculation is certain, which can only lead to instability.
A vicious circle.