Booking to repay $110m in Covid aid to governments
Netherlands / US: Online travel agency Booking Holdings has revealed it will repay up to $110 million in coronavirus aid to governments who supported the company during the height of the pandemic. including around $78 million [€64 million] to the Dutch government over an executive pay row.
Booking announced it would repay the aid in a filing with the US Securities and Exchange Commission, including a $78 million [€64 million] repayment to the Dutch government over an executive pay row. Booking.com, the company’s largest subsidiary, is based in the Netherlands.
Last week, the NRC newspaper in the Netherlands reported that three senior Booking.com employees at the holding company’s Amsterdam base had received some €28 million [$34 million] in bonuses last year, provoking angry responses from Dutch MPs.
CEO Glenn Fogel and CFO David Goulden are said to have been paid $7.1 million and $24 million respectively in compensation in 2020.
The firm said: “While the decision to accept this assistance was made during a period when the company’s business was severely impacted and the timing and pace of the recovery of the travel industry was very uncertain, the company is now encouraged by the improving booking trends.”
Booking added in defence the payments, which were mostly in the form of stock, that they were in line with industry standards and dependant on future performance, while Goulden’s pay included hiring and retention incentives.
The company said that it would be make the repayments, despite Dutch social affairs and employment minister, Wouter Koolmees saying there was no legal grounding on which to enforce the demand, and experiencing an 80 per cent decline in business at the start of the pandemic, and posting a Q1 loss of €165 million at the start of this year.
Booking.com spokesperson Leslie Cafferty said: “While we have not recovered fully, we have heard Dutch society, and have taken considerations seriously. As we are in a more stable position than when we applied for the NOW [Dutch Covid state aid] programme in early 2020, and on a path toward recovery, we will pay back the subsidies received.”
Having operated in a “very unpredictable” environment, Booking made an operating loss of $12.5 billion in 2020, marking a significant drop from a $6.6 billion operating income the year before.
Last August, Booking.com announced it would make a quarter of its 17,500 staff redundant due to the impact of the Covid-19 pandemic, which saw the brand report a 91 per cent drop in gross travel bookings. It also opted to close five of its offices around the world, in Bellevue, Washington [US], London and Cambridge [England], Toronto [Canada], and Split [Croatia].
In its Q3 earnings call for 2020, senior Booking executives said they were predicting a continued dip in cancellation rates in November and December before a U-shaped recovery [rather than the deep V shape seen earlier in the year] until Spring 2021.
As well as Booking.com, Booking Holdings also owns brands such as Kayak, Priceline, and OpenTable.
