Every element of the tours and activities sector has been unhinged by the COVID-19 coronavirus, from large well-funded online marketplaces to software suppliers to local operators in far corners of the world. But strategies to survive the crisis vary, and one interesting example is that of Berlin-based GetYourGuide.
Founded in 2009 by four college classmates, GetYourGuide has raised more than USD 650 million, including a massive $484 million Series E round nearly one year ago. But even with that cushion, co-founder and COO Tao Tao says the founders have not forgotten the lessons they learned in the early days as they built a new type of travel startup in the aftermath of the global financial crisis.
As the virus began to permeate communities around the globe, Tao and his co-founders crafted a survival plan based on a combination of reducing expenses, adjusting forecasting and conserving cash, with an underlying objective of avoiding any layoffs for the company’s more than 700 employees in 17 offices around the world.
“This is a plan that predicts basically that 2020 is nonexistent. You cannot have less than zero bookings. So it’s a very conservative plan that we think is very strong,” he says.
The company says bookings are not truly at zero. Remote locations - for example Vanuatu and Papua New Guinea - are getting some activity currently, and a broader range of bookings are trickling in for the fall. But, of course, it’s nothing like the rapidly growing volume the company had been experiencing at the start of the year.
Labor is generally the biggest cost for a business, so a key component of the GetYourGuide’s plan is a mix of voluntary reductions in salary and workings hours, including the four founders taking 50% cuts in pay and senior management taking “significant voluntary pay cuts.”
The voluntary cutbacks in salary and hours are spread across GetYourGuide offices globally, impacting more than half of the 700 employees.
For those in Germany - about three-quarters of the total staff - pay reductions are subsidized by the government through a financial assistance program known as Kurzarbeit, which translates to “short-time work.” Through the program, companies can cut employees hours and pay, and the government provides those employees a supplement equal to about two-thirds of their lost wages – reducing both costs for employers and distress for employees.
This program is part of what has enabled GetYourGuide to avoid any layoffs, unlike its main competitor, Hong Kong-based Klook, which has implemented a mix of layoffs and furloughs of at least three months for 10 to 20% of its workforce, according to a Klook spokesperson.
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