Orbitz Worldwide, Inc. Reports Third Quarter 2013 Results
Orbitz Worldwide announces Q3 financial results today. Room nights grew 22 percent in the third quarter 2013, a further acceleration from the second quarter 2013. Revenue increased 11 percent to $220.9 million in the third quarter 2013.
Chicago, November 5, 2013 - Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the third quarter and nine months ended September 30, 2013.
• Room nights grew 22 percent in the third quarter 2013, a further acceleration from the second quarter 2013.
• Revenue increased 11 percent to $220.9 million in the third quarter 2013.
• Revenue from hotels and vacation packages grew to represent 50 percent of total revenue for the trailing twelve months (TTM) ended September 30, 2013, up 509 basis points from the TTM ended September 30, 2012.
• Net income in the third quarter was $13.0 million.
• Adjusted EBITDA was $45.1 million in the third quarter 2013, an increase of 13 percent compared with the third quarter 2012.
Third Quarter 2013 Financial Results
Gross Bookings and Net Revenue
Gross bookings increased 5 percent year over year in the third quarter 2013. This increase was driven by higher hotel and vacation package volumes, higher airfares, and higher average booking values per hotel and vacation package transaction. Lower air volume partially offset these increases.
Net revenue was $220.9 million for the third quarter 2013, up 11 percent year over year. This increase was primarily driven by higher hotel and vacation package volume, and higher net revenue per air, package and hotel transaction. Net revenue in the third quarter 2013 also benefited from the addition of an airline servicing revenue stream for one of the company's private label distribution partners. Lower air volume partially offset these increases.
• Standalone air net revenue was $59.5 million in the third quarter 2013, down 4 percent year over year. Standalone air revenue was down for the third quarter versus prior year due to lower air volumes and a non-cash benefit recorded in air revenue during the third quarter of 2012 to reduce an unfavorable contract liability. This was partially offset by the addition of an airline servicing revenue stream that was added late in the third quarter of 2012.
• Standalone hotel net revenue was $83.3 million in the third quarter 2013, up 36 percent year over year. This increase was driven primarily by higher volume, and to a lesser extent higher net revenue per transaction.
• Vacation package net revenue increased 12 percent in the quarter to $37.3 million due primarily to higher net revenue per transaction, and to a lesser extent volume.
• Advertising and media revenue was $13.8 million in the third quarter 2013, down 4 percent year over year. The decrease was due to the shutdown of the Away network.
• In October, Orbitz.com launched its loyalty program, Orbitz Rewards. The program allows customers to earn Orbucks -- the currency of Orbitz Rewards -- when booking Orbitz Rewards hotels, flights and vacation packages on Orbitz.com and then redeem them instantly on Orbitz Rewards hotels around the world, with no blackout dates, no unrealistic redemption hurdles and no restrictions on combining rewards with other offers.
• In August, Orbitz.com launched a major update to the Orbitz app for Android smartphones and tablets, adding significant usability and speed improvements to make it faster and easier to search, book and access itineraries after booking.
• In October, Orbitz.com launched updated versions of the Orbitz apps for Android, iPhone and iPad that deeply integrate Orbitz Rewards member benefits, both earn and burn, into the mobile experience. Orbitz Rewards members earn Orbucks at a higher rate when booking hotels through a mobile app.
• In the third quarter of 2013, 27 percent of standalone hotel bookings were made via mobile devices across the company's consumer brand portfolio.
• In the third quarter of 2013, over 60 percent of Orbitz.com same-day standalone hotel bookings, which represented 20 percent of total Orbitz.com standalone hotel bookings, were made via a mobile device.
Orbitz Partner Network
• During the third quarter 2013, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including Alaska Tourism, Atlantic City Tourism Alliance, Barbados Tourism Authority, City of Palm Desert, Dominican Republic Tourism, German National Tourism Office, Slovenia Tourism, Spain Tourism and Sun Valley Resorts.
• In September 2013, Orbitz launched an extensive marketing campaign with VISIT FLORIDA, supported by digital and broadcast media, to encourage consumers to book travel to Florida.
• In October 2013, Orbitz launched the latest installment of its successful online video initiative Orbitz Originals. "The Different Cancun," viewable at Orbitz.com/Cancun, was produced in partnership with the Cancun Convention & Visitors Bureau and the Mexico Tourism Board and hosted by award-winning travel expert Richard Bangs. Highlights of this nine-part online video series include: "Swimming with Whale Sharks," "Cancun's Best Food," "Escape to Isla Mujeres" and "Golf vs. Spa: Battle of the Vacationers." To date Orbitz Originals videos highlighting the Cayman Islands, Qatar, Vermont, Ireland and New York have generated more than one million views by travelers seeking inspiration for future trips.
• During the third quarter 2013, Orbitz Worldwide signed multi-year hotel distribution agreements with Trump Hotel Collection, as well as partnership agreements with a number of hotel groups including Far East Hospitality Group in Singapore, Linder Hotels in Europe, Malmaison Hotels in the UK, and Metropark Hotels in China.
• During the third quarter 2013, Orbitz Worldwide signed distribution agreements with a number of airlines including Arik Airlines, Condor German Airlines, Fiji Airways, Royal Jordanian Airlines and WestJet.
For the full year 2013 the company expects:
• Net revenue of approximately $840 million; and
• Adjusted EBITDA growth between nine and ten percent.
This outlook assumes foreign exchange rates as of October 31, 2013.