The move comes today (Apr 24) alongside the news of a USD$3.2 billion capital raise to secure the businesses’ financial strength.
“We have one mandate – to conserve cash, survive, and use this time to reconstruct a stronger enterprise to serve the future of travel,” Diller said.
“We are unable to make any predictions as to when travel will rebound but we emphatically believe that it will, [because] ‘if there’s life, there’s travel.'”
Diller said the company was “truly lucky” that it was able to secure Kern for the role.
“Kern has been a key member of our Board since 2005 and became our Vice Chairman in 2018,” he said. “When we changed management in December, Kern joined with me in operational supervision of the company.
Expedia Chairman Barry Diller and new CEO Peter Kern (above)
“In these last five months, he has shown outstanding leadership in all aspects of the business, first in a wide reorganisation and then dealing with the impact of the Corona[virus] crisis on our business.
“He now knows all aspects of the business, and we are truly lucky that he is now available to devote his full time to Expedia,” he said.
Kern has spent decades in leadership roles in public and private settings, most recently as the CEO of Tribune Media.
Diller also announced that Eric Hart has been appointed Expedia Group’s Chief Financial Officer.
“Hart has been with Expedia for 11 years now, and during that time he’s held responsibility for group strategy, business development, global M&A, investments, and the CarRentals.com business.
“He’s a strong executive who’s been truly tested these past five months as Acting CFO during both the reorganisation and the Corona[virus] crisis. He has fully earned permanent status as CFO.”
Expedia Group’s new CFO Eric Hart
The announcements were made as Diller revealed a major capital boost for the world’s largest travel business.
“As part of a comprehensive strategy to bolster Expedia’s financial strength, we announced this morning that we are raising approximately USD$3.2 billion of new capital,” he said. “This consists of an equity investment of USD$1.2 billion by Apollo and Silver Lake, two highly respected private equity firms.”
In other moves to ensure the business survives, Diller said the Chairman, Chief Executive Officer and members of the Board will forgo cash compensation for the remainder of the year, while Senior Executives be taking a reduction in salary of 25% for the balance of the year.
The company was also implementing furloughs and reduced work week programs for select volume-based teams with limited work right now, he said.
“These steps on furlough and reduced work week programs as well as voluntary reduced work weeks will be active through August 31, when we will re-evaluate the situation and hope to be in a better position with volumes coming back and plenty of work to keep us all busy,” Diller said.
“Since the crisis began, the Company has encountered an extraordinary number of challenges, and just as governments around the world were unprepared, so too were we.
Diller says the company has raised $3.2 billion as part of a survival plan
“We had limited online tools to support widespread cancellations and our call volume spiked 500%.
“Under extraordinary pressure, our tech teams built new tools, and managed to bring our call center capacity to acceptable levels.
“In addition, every day now for the past 38 days beginning March 16, the Travel Leadership Team, together with Kern and me, have had an intensive session on the day’s issues.
“There is nothing like a crisis to show the mettle of our executives, and I can say that without exception, none have been wanting. In fact, they’ve shown we have an outstanding group at all levels of the Company,” he said.
Diller said since the start of the year, Expedia has gone through “multiple challenging stages”.
“First, the reorganisation that resulted from the management change, which has now been mostly completed – we were fortunate we got to this prior to the crisis,” he said.
Expedia has gone through a number of challenges in 2020
“Second, and ongoing, dealing with the crisis itself, cutting our costs everywhere, and today announcing additional financing, which, while the usual strain, was led flawlessly by Messrs. Kern and Hart.
“And, to come in the next months, an intensified process to recalibrate our organisation for the future.
“We’ve learned such an enormous amount over these almost five months – we’re going to put that to great and definitive use as we come out of this period.
“I believe we’ll have a far finer operation coming out of this crisis than going into it.
“We have the financing to carry us through, a superb newly named senior management team, and a very clear focus for whatever the future brings. So, we’ll seize the (next) day,” Diller said.