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Exactly. Actual car rental companies are down more than 60% because they have debt payments to make whether people want to rent the cars or not.
by cheriot 7y ago
Exactly. Actual car rental companies are down more than 60% because they have debt payments to make whether people want to rent the cars or not.
- TheOtherHobbes 7y agoAirBnB etc have (relatively) fixed infrastructure and staffing costs. Companies can negotiate loan payment holiday if they can persuade their creditors that it makes more sense to get an extra few months of debt relief than to be closed down - which would probably take a few months anyway. Not so with fixed staffing costs. Even if furlough is an option you need to decide who's essential, and who can be layed off temporarily - not always simple, especially if you're not sure if the downturn will be short. If furlough isn't an option you suddenly start burning your cash reserves after a huge drop in income, and investors start getting very nervous.
- cheriot 7y ago> Companies can negotiate loan payment holiday By the time bond holders are taking a haircut, shareholders are wiped out. > Not so with fixed staffing costs. Layoffs aren't easy, but owners have more flexibility and control than they do negotiating with bond holders.