Chicago, November 3, 2011 - Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the third quarter and nine months ended September 30, 2011.
"We had a solid quarter and the company performed well on a number of fronts," said Barney Harford, CEO of Orbitz Worldwide. "ebookers in Europe continued to generate strong results with 39 percent net
revenue growth. We were encouraged by improving Orbitz and CheapTickets room night performance during the quarter and into October as compared with the year over year performance in the first half. While the private label channel lapped the launch of some new partners and partner site enhancements during the quarter, we are excited to have entered into a number of new partnerships, including one with the American Express Consumer Travel Network which will launch in the second half of 2012."
Third Quarter 2011 Financial Highlights
The company reported net income of $11.2 million or $0.11 per diluted share for the third quarter 2011 compared with net income of $15.3 million or $0.15 per diluted share for the third quarter 2010. Adjusted
EBITDA was $40.7 million for the third quarter 2011, a decrease of 14 percent year over year.
Gross Bookings and Net Revenue
Gross bookings increased one percent year over year. The increase in gross bookings was driven by higher volume for ebookers, higher air fares, higher average daily rates ("ADRs") for hotel rooms and foreign currency impacts, partially offset by lower volume for the company's domestic leisure brands. Total hotel gross bookings, comprised of hotels booked on a standalone basis and as part of a vacation package, increased eight percent year over year due primarily to ADR expansion.
Net revenue was $202.9 million for the third quarter 2011, up four percent year over year. Net revenue increased due primarily to higher hotel, vacation package, car and advertising and media revenue, partially offset by lower air net revenue. Total hotel net revenue, comprised of hotels booked on a standalone basis and as part of a vacation package, represented 36 percent of the company's total net revenue for the trailing twelve months ended September 30, 2011, up from 35 percent for the trailing twelve months ended September 30, 2010. Net revenue from ebookers represented 22 percent of the company's total net revenue on a trailing twelve month basis ended September 30, 2011.
Standalone air net revenue was $63.9 million in the third quarter 2011, down two percent year over year. Air net revenue for the company's domestic leisure brands declined due to lower air volume, partially offset by higher net revenue per airline ticket. The lower air volume was due primarily to actions taken by certain airlines to limit the forward distribution of their fares on metasearch sites, such as Kayak, higher air fares and a fare structure change implemented by a major airline. The higher net revenue per airline ticket was due primarily to a shift in supplier mix towards airlines from which the company earns higher commissions. ebookers air net revenue increased due primarily to higher air volume.
Standalone hotel net revenue was $59.1 million in the third quarter 2011, up five percent year over year. ebookers hotel net revenue increased due to another strong quarter of standalone hotel room night growth. Hotel net revenue for the company's domestic leisure business was relatively flat. HotelClub hotel net revenue increased due to foreign currency impacts, partially offset by lower hotel volume.
Vacation package net revenue increased seven percent in the quarter to $32.4 million. ebookers vacation package net revenue increased due primarily to higher volume as a result of new product offerings and the company's marketing efforts. Vacation package net revenue for the company's domestic leisure brands decreased in the quarter due to lower vacation package volume driven largely by higher air fares and higher ADRs.
Advertising and media revenue increased 17 percent year over year to $14.3 million due primarily to strength in display revenue.
Other net revenue, which is primarily comprised of car rental, cruise, destination services, travel insurance and airline hosting revenue, increased ten percent year over year. This increase was
In August 2011, CheapTickets became the first major U.S. online travel brand to offer vacation package booking functionality via mobile, adding the capability to shop for and book a vacation package on the mobile-web version of the site, m.cheaptickets.com.
In August 2011, Orbitz launched a highly successful Facebook promotion which doubled the Orbitz fan base to over 280,000, and generated over 3.5 million bids and 130,000 wall posts.
In September 2011, ebookers launched the ebookers Hotels App for iPad, a native application that gives customers an intuitive search-and-book experience designed specifically for iPad.
In September 2011, Orbitz launched the Recommended Hotels module that displays alternate hotel recommendations to visitors on certain hotel landing pages. These recommendations are based on bookings by other consumers who viewed the same hotel.
In October 2011, Orbitz Worldwide reached another milestone in its Global Platform migration efforts, migrating HotelClub.com to the Global Platform.
In October 2011, ebookers launched "Insider Deals," a weekly members-only flash sale that offers 50 percent or more off handpicked hotels in top destinations around the world and reaches over 2 million ebookers members by email each week.
Orbitz Worldwide was ranked #12 on the Internet Retailer's list of Top 300 mobile commerce companies for 2011 based on proprietary estimations and forecasts of total mobile sales for the full year.
Orbitz, ebookers and HotelClub either launched or expanded flash sale products reaching millions of customers in an efficient, low-cost and effective engagement of known travelers.
Private Label Distribution
In September 2011, Orbitz Worldwide announced a new partnership with American Express under which Orbitz Worldwide will provide private label services to power air, car, hotel, vacation package and activities & services bookings for the American Express Consumer Travel Network beginning in the second half of 2012.
In October 2011, Orbitz Worldwide signed a private label distribution agreement with Hawaiian Airlines to power functionality on Hawaiian Airlines' website launching later in 2011.
Orbitz Worldwide signed an agreement with, and in December 2011 will begin providing private label services to, the Chicago Convention and Tourism Bureau, which each year welcomes to Chicago nearly 40 million visitors who spend nearly $11 billion annually.
Orbitz Worldwide recently entered into a private label partnership with Rearden Commerce to provide hotel booking services to the Rearden Commerce network of B2B and B2C partner websites.
Orbitz Worldwide expects the business relating to its signed, but not yet launched, partnerships will generate more than 10 percent of total Orbitz Worldwide net revenue and Adjusted EBITDA on an annualized basis, although only part of this will benefit 2012 given launch timing.
Orbitz for Business launched Orbitz for Business Meetings, a new meetings booking channel that allows customers to quickly and easily source meeting venues from and send e-RFPs to hotels and other suppliers. Orbitz for Business Meetings allows customers and meeting planners to access thousands of potential venues, compare highly competitive supplier rates and review project status using an integrated online booking process.
During the third quarter, Orbitz Worldwide reached partnership agreements with a number of regional hotels and hotel groups including Orient Express Hotels in South America, the Rosewood MayaKoba Hotel in Mexico, Diamond Resorts in the United Kingdom, Hotels Charm in Paris, Mardi Gras in Italy, CFP in Switzerland, Welcome Group in Germany, and Beatriz, Bensaude Turismo Hotels, Bellver, JS Hotels and Garden Hotels in Spain.
In October 2011, Orbitz Worldwide and Dollar Thrifty Automotive Group announced an extension to the agreement under which the Dollar Rent A Car and Thrifty Car Rental brands are marketed through the Orbitz Worldwide family of sites until the end of 2014.
During the third quarter, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including Missouri Division of Tourism, Tourism Fiji, Maine Office of Tourism, Tourism Ireland, Tahiti Tourisme, Beverly Hills Tourism, Proexport Colombia, PromPeru, Miami Convention and Visitors Bureau, West Virginia Division of Tourism, Embratur Brazilian Tourist Board and Spain Tourism. Orbitz Worldwide now has partner marketing agreements with over 200 destination marketing organizations.
For the fourth quarter 2011, the company expects:
Net revenue in the range of $170 million to $174 million; and
Adjusted EBITDA between $28 million and $32 million.
For the full year 2011, the company expects:
Net revenue in the range of $760 million to $764 million; and
Adjusted EBITDA between $125 million and $129 million.