Companies

Priced out by local aggregators, Expedia lays off 300 in India

Forum Gandhi Mumbai | Updated on December 04, 2020 Published on December 04, 2020

A representative image   -  Reuters

Business hit hard by the deep-discounting model adopted by local travel aggregators, Expedia Inc is paring its presence in India, and has laid off 300 employees in the country.

The ongoing stress in the travel sector has only added to the company's woes.

Expedia is facing massive headwinds globally, too. In the third quarter of FY21, its revenues dropped 58 per cent year-on-year.

In April, the company had announced that it would give the pink slip to at least 3,000 people from its global operations, accounting for almost 12 per cent of its total workforce.

When contacted, an Expedia spokesperson said: “As we shared in February and reiterated in May, Expedia Group continues with the necessary work to simplify the business. The changes to our office in India are a continuation of this effort.” According to sources, the company’s marketing budget has dropped to zero for this year and the India office will have to sail through on its own.

The online travel industry is highly competitive, with a number of players including Makemytrip offering heavy discounts to customers. Expedia seems to have decided that it cannot keep burning money to make small profits, especially in a market where discounting is the premise of business, said a source close to the company’s India operations.

No room for cheer

India’s travel industry is going through a crisis with almost 65 per cent of rooms at hotels and resorts likely to remain unoccupied during the Christmas-New Year week, according to industry experts. Hospitality players may not even see a correction in the average room rates (ARRs) that are currently 30 per cent lower compared to the same time last year.

Pavethra Ponniah, Vice-President and Sector Head at ICRA, said: “We may not even hit 50 per cent of occupancy on a year-on-year basis. ARRs in October were 30 per cent down and we expect them to remain the same for December as well.”

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Published on December 04, 2020
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