Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • March 2021 (Revised March 2021)
  • Case
  • HBS Case Collection

Hotwire.com: Navigating Through Turbulence

By: Jeffrey F. Rayport, Manny de Zarraga and Eric Levine
  • Format:Print
  • | Language:English
  • | Pages:20
ShareBar

Abstract

On September 10, 2001, after speaking at an industry conference at New York’s World Trade Center, Hotwire co-founder Spencer Rascoff boarded a flight from Newark to San Francisco. After returning home, Rascoff awoke the next morning to a phone call informing him that the same numbered flight from Newark he had boarded the day before had been hijacked and crashed into one of the World Trade Center’s Twin Towers. That same morning, Rascoff’s co-founder and Hotwire CEO Karl Peterson was about to give the keynote speech at a travel conference in New Orleans. Peterson saw the second plane hit the towers on the hotel’s lobby television. With all commercial flights in the U.S. and Canada grounded for three days after the attacks, 15,000 Hotwire customers were stranded away from home. In the weeks that followed, customers demanded refunds for cancelled flights, and new flight bookings plummeted as Americans lost faith in the safety of air travel. To make matters worse, Hotwire’s founders learned from the FBI that some of the 9/11 hijackers had purchased their flights on Hotwire.com. While 9/11 took an emotional toll on all Americans, the travel industry faced the additional burden of intense financial pressure. Hotwire’s leadership team needed to make immediate and hard decisions to stem cash outflow and determine where, when, and how to let employees go, while trying to maintain morale. The business required a new capital raise on terms that would be acceptable to existing investors. And, while facing trade-offs in the use of Hotwire’s scarce resources, the team needed to position the business for future growth amid a field of well-funded competitors.

Keywords

September 11; Corporate Entrepreneurship; Business Growth and Maturation; Disruption; Decisions; Job Cuts and Outsourcing; Growth Management; Digital Platforms; Problems and Challenges; Risk and Uncertainty; Expansion; Internet and the Web; Leading Change; Leadership Style; Air Transportation Industry; Tourism Industry; San Francisco

Citation

Rayport, Jeffrey F., Manny de Zarraga, and Eric Levine. "Hotwire.com: Navigating Through Turbulence." Harvard Business School Case 821-084, March 2021. (Revised March 2021.)
  • Educators

About The Author

Jeffrey F. Rayport

Entrepreneurial Management
→More Publications

Related Work

    • March 2021 (Revised March 2021)
    • Faculty Research

    Hotwire.com: Navigating Through Turbulence

    By: Jeffrey F. Rayport, Manny de Zarraga and Eric Levine
Related Work
  • Hotwire.com: Navigating Through Turbulence By: Jeffrey F. Rayport, Manny de Zarraga and Eric Levine
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College