. Room nights increased 20 percent year-over-year in the second quarter 2014.
. Net revenue increased 10 percent year-over-year to $248.1 million in the second quarter 2014.
. Net income in the second quarter 2014 was $6.9 million.
. Adjusted EBITDA increased 4 percent year-over-year to $44.8 million in the second quarter 2014.
Second Quarter 2014 Financial Results
Gross Bookings and Net Revenue
Gross bookings increased 9 percent year-over-year to $3.4 billion in the second quarter 2014. This increase was driven by higher hotel, car, vacation package and air volume and higher average booking values per air, vacation package, hotel and car transaction.
Net revenue increased 10 percent year-over-year to $248.1 million in the second quarter 2014. This increase was driven by higher hotel, vacation package, car and air transaction volume and higher net revenue per air, vacation package and car transaction partially offset by lower net revenue per hotel transaction. The acquisition of certain assets and contracts from the Travelocity Partner Network ("TPN") on February 28, 2014, contributed approximately 7 percentage points to year-over-year net revenue growth for the second quarter 2014.
. Standalone hotel net revenue was $90.3 million in the second quarter 2014, up 15 percent year-over-year. This increase was due to higher transaction volume offset by lower net revenue per transaction due primarily to loyalty contra revenue associated with Orbitz Rewards and promotional activities. The TPN acquisition contributed approximately 8 percentage points to year-over-year standalone hotel net revenue growth for the second quarter 2014. Standalone hotel net revenue represented 36 percent of total second quarter net revenue, up from 35 percent in the second quarter 2013.
. Standalone air net revenue was $71.0 million in the second quarter 2014, up 5 percent year-over-year. This increase was due to higher net revenue per air transaction. The TPN acquisition contributed approximately 10 percentage points to year-over-year standalone air net revenue growth for the second quarter 2014. Standalone air net revenue represented 29 percent of total second quarter net revenue, down from 30 percent in the second quarter 2013.
. Vacation package net revenue was $43.4 million in the second quarter 2014, up 12 percent year-over-year. This increase was driven by higher transaction volume and higher net revenue per transaction. The TPN acquisition contributed approximately 3 percentage points to year-over-year vacation package net revenue growth for the second quarter 2014. Vacation package net revenue represented 17 percent of total second quarter net revenue in both 2013 and 2014.
. Advertising and media net revenue was $15.2 million in the second quarter 2014, down 2 percent year-over-year. Advertising and media net revenue represented 6 percent of total second quarter net revenue, down from 7 percent in the second quarter 2013.
Operational Highlights
Consumer Brands
. In May 2014, the Orbitz.com apps for iOS and Android were honored with the Best Travel App award at the 2014 APPY Awards. The distinguished APPY Awards honor applications on all platforms and are dedicated to acknowledging creativity and excellence in app design.
. In July 2014, Orbitz Rewards achieved 2.3 million members. The Orbitz Rewards loyalty program gives travelers an opportunity to earn Orbucks. -- the currency of Orbitz Rewards -- when booking hotels, flights and vacation packages on Orbitz.com and then redeem them instantly on tens of thousands of hotels around the world, with no blackout dates, no redemption hurdles and no restrictions on combining rewards with other offers.
. In July 2014, Orbitz Worldwide expanded its loyalty offering with the launch of CheapTickets CheapCashSM. Travelers can earn rewards in CheapCash when booking any flight on CheapTickets.com. If booking through the CheapTickets mobile app for iOS and Android, members can earn rewards on both air and hotel. The CheapCash currency can be redeemed against stays in tens of thousands of CheapCash hotels in destinations around the world. CheapCash can be used within 30 days, but members have one year from the date of booking to complete travel.
. In the second quarter 2014, 31 percent of standalone hotel bookings were made via mobile devices across the company's global consumer brand portfolio, up from 24 percent in the second quarter 2013.
. In July 2014, Orbitz partnered with Amazon for the launch of its Fire smartphone by developing an app specifically optimized to take advantage of the Fire’s unique capabilities, including its 3D user interface, gesture controls and enhanced home screen carousel.
Orbitz Partner Network
. During the second quarter 2014, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including the Breckenridge Chamber of Commerce, British Virgin Islands, Croatia Tourism Board, Durango Area Tourism Office, Greek National Tourist Office, Michigan Development Corporation, Nassau Paradise Island, Santa Monica Convention and Visitors Bureau, Texas Tourism, Virginia Tourism Corporation, Visit Britain and Visit Florida.
. Orbitz.com recently launched two new installments of its successful online video initiative, Orbitz Originals, hosted by award-winning travel expert Richard Bangs. "Orbitz Originals: Secrets of Puerto Rico," viewable at orbitz.com/ PuertoRico, launched in June 2014 and was produced in partnership with the Puerto Rico Tourism Company. "Orbitz Originals: Jackson Hole Winter +," viewable at orbitz.com/JacksonHole, launched in July 2014 and was produced in partnership with the Jackson Hole Travel and Tourism Board. To date, Orbitz Originals videos highlighting Cancun, the Cayman Islands, Florida, New York, Northern Ireland, Qatar, Vermont and Western Ireland have generated more than one million views by travelers seeking inspiration for future trips.
Partner Services
. During the second quarter 2014, Orbitz Worldwide signed marketing and promotion agreements with Diamond Resorts, Dorint Hotels and Resorts, Dorsett Hospitality Group, GHL Hotels, Pan Pacific Hotel Group and Scandic Hotels.
. During the second quarter 2014, Orbitz Worldwide signed marketing and promotion agreements with a number of airlines including Avianca, China Southern and WestJet.
. During the second quarter 2014, Orbitz Worldwide signed a marketing and promotion agreement with car rental provider Avis Budget Group.
Outlook
For the third quarter 2014, the company expects:
. Net revenue between $249 million and $254 million; and
. Adjusted EBITDA between $41 million and $46 million.
For the full year 2014, the company expects:
. Net revenue growth between 9 and 11 percent year-over-year; and
. Adjusted EBITDA growth between 7 and 10 percent year-over-year.
This outlook assumes foreign exchange rates as of July 31, 2014.
