When the C.E.O., Already Facing a Crisis, Gets the Coronavirus

When the C.E.O., Already Facing a Crisis, Gets the Coronavirus

Glenn Fogel was in crisis mode.It was late February, and the coronavirus was spreading. Mr. Fogel, the chief executive of Booking Holdings, the online travel giant that owns brands like Priceline.com, OpenTable and Kayak, was spending nearly every waking moment at his computer as a tsunami of travel cancellations poured in. He quickly paused marketing, halted stock buybacks, froze hiring and raised $4 billion in debt.“The job, it’s just expanded exponentially,” he said.Then the virus that ravaged his business got him, too. His wife became sick, and his daughter, a college student who had returned home, started to cough. On March 25, Mr. Fogel, 58, who lives just outside New York City, developed a headache and a 101-degree fever.He was among a wave of leaders at publicly traded companies who tested positive for the coronavirus. At least half a dozen chief executives have contracted it in the past three months, according to a tally by The New York Times, including the heads of NBCUniversal; the real estate investment firm Kimco Realty; Becle, which makes Jose Cuervo tequila; and the security company ADT. In April, Morgan Stanley’s chief, James Gorman, told employees that he had tested positive and recovered.Mr. Fogel’s illness was relatively mild, but it complicated navigating the lockdown and shoring up a business in free fall. And it put him on the hook to properly disclose the situation to shareholders.Publicly traded companies are obligated to divulge events that may be considered “material” to investors. Peter Cappelli, a management professor at the Wharton School at the University of Pennsylvania, said companies faced risks if news of a top executive’s illness leaked before a disclosure. Apple famously concealed the health conditions of its chief, Steve Jobs, before he died in 2011, prompting criticism and an inquiry by the Securities and Exchange Commission.“You don’t want to lose the P.R. battle that the company hid this,” Mr. Cappelli said.Mr. Fogel kept working. Before taking a drive-through test for the virus on March 26 near his home in Scarsdale, N.Y., he did a CNN interview over Skype. On April 1, Booking Holdings filed a regulatory document laying out his condition.Mr. Fogel, an energetic storyteller, said his attitude was, “Let’s let everybody know so everyone’s informed, so there’s no question.”Steve Hafner, who heads OpenTable and Kayak and reports to Mr. Fogel, estimated that he had gotten more messages on Slack and video calls from his boss while he was sick than when he was healthy.“Son of a gun worked right through it,” Mr. Hafner said.Mr. Fogel, who was previously a trader and an investment banker, joined Booking in February 2000 as a young manager. At the time, the company, which began in 1997, was known as Priceline.com. Two weeks later, the stock market peaked and the dot-com bubble burst. Soon after, the Sept. 11 attacks happened, hampering people’s desire to travel.But the company forged ahead, focusing on hotels, expanding in Europe and on making acquisitions. In 2005, it bought a small Dutch start-up, Booking.com, which people use to book lodging. Booking.com became the largest division in the company, which took its name.Mr. Fogel rose through the ranks, eventually overseeing acquisitions and strategic alliances. In 2017, he was appointed chief executive after his predecessor resigned over an affair with an employee.To prepare for disruptive events, Booking conducted crisis management drills. Executives practiced for situations like natural disasters, political coups, data breaches and ransomware attacks. But there was no drill for a pandemic.“All the others together, they’re nowhere near what has happened now,” Mr. Fogel said.When the extent of the pandemic became clear to Mr. Fogel and his lieutenants in early March, their first move was to set up customer service workers at home to field an avalanche of cancellations from travelers.He and his executives also tried to quickly figure out how to balance the inherent conflicts among hoteliers, who risked going bankrupt if they refunded everyone; customers, who stood to lose money on nonrefundable bookings; customer service workers, who were under pressure while working from home with their families; and shareholders, who argued that Booking was not legally obligated to offer refunds.The pressure was intense. Booking paid customers $63 million in refunds on nonrefundable reservations for the first three months of the year, which it does not expect to recover. Mr. Fogel said the company would try to get some money back from the hotels eventually, but that requires helping them stay afloat now. OpenTable later waived fees on its restaurant reservation system for the rest of the year.“You want to build the reputation that you are there,” Mr. Fogel said.By then, he was feeling ill, and his wife and daughter had become sick. After initially testing negative for the coronavirus, his high-school-age son developed a cough and fever, too.Leslie Cafferty, Booking’s head of communications, said Mr. Fogel’s first instinct had been to call in the lawyers to understand disclosure requirements and “minimize any risk he was hiding information.” They made plans to announce his test results in a S.E.C. filing.After Mr. Fogel got positive test results for the virus on March 31, Booking pulled the trigger on the filing the next day. In it, Booking said that he continued to perform as chief executive and that the company had succession plans, including a temporary delegation of responsibilities, for all of its senior executives.By then, Mr. Fogel’s fever had faded, and he felt recovered, he said. His family recovered quickly as well. But the announcement prompted more than 1,000 emails and messages from employees, partners and friends. As he dealt with a cratering business, it took him more than a month to respond to the notes.Mr. Fogel said he had created a system of responses: People who had sent a short “Get well soon” got a thumbs-up emoji. Those who had also had the virus got a more thoughtful response. “And then there were others that knew somebody that had lost their fight, and those were hard to read,” he said.Work piled up as the travel industry underwent more pain. In April, newly booked rooms through Booking’s various sites plunged 85 percent from a year earlier.That led to cost cuts. In the last month, Booking, which has 26,000 employees, has laid off 1,900 people at Kayak, OpenTable and Agoda, its subsidiary in Singapore. It also furloughed 1,800 workers in Britain under the country’s relief plan and applied for aid from the Netherlands.The company — which has seven crisis management teams, including one that manages the other crisis management teams — also increased the frequency of its video question-and-answer sessions with Mr. Fogel and other internal communications.On May 7, Booking said it had lost $699 million in the first quarter, compared with a profit of $765 million a year earlier. It wrote down the values of OpenTable and Kayak by $489 million, citing the pandemic. Its stock price has fallen 21 percent this year.Mr. Fogel and his team are now figuring out how to emerge from quarantine to an altered travel market. OpenTable has started offering reservations to bars and stores that are reopening with social distancing measures. Kayak has begun featuring rental cars on its home page instead of flights.“In the past, we were doing six million flight queries a day, and a fraction of that was rental cars,” said Mr. Hafner, the head of both brands. “Now it’s the inverse.”Mr. Fogel’s health remains top of mind. In a recent meeting with Booking’s board of directors, they stopped Mr. Fogel in the middle of a crisis management presentation to check on his health.“He’s going 100 miles an hour,” said Tim Armstrong, the former chief executive of AOL and a member of Booking’s board since 2013. “The board was conscious of making sure he was taking care of himself.”Before the pandemic, Mr. Fogel commuted weekly to headquarters in Amsterdam. He also made frequent trips to Booking’s offices in Singapore and Bangkok. He said he was eager to travel again, but appreciated one silver lining of sheltering in place.For the past two months, he has had dinner each night with his wife, son and daughter, something that hadn’t happened that often in “many years,” he said.As for his family’s bout with the virus, Mr. Fogel added, “Hopefully now we’re immune.”


Source link

Debbie
Author: Debbie

Be the first to comment
Leave a Reply

Your email address will not be published.


*