Chicago, February 14, 2013 - Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the fourth quarter and full year ended December 31, 2012.
• Room night growth accelerated 7 percentage points in the fourth quarter 2012, led by acceleration within the company's private label distribution business and at HotelClub.
• Hotel net revenue, including standalone and vacation packages, grew to 39 percent of total revenue, up nearly 3 percentage points from 2011.
• Net loss was $314.6 million for the fourth quarter 2012 due to a $321.2 million non-cash goodwill and intangible asset impairment charge.
• Adjusted EBITDA grew 19 percent in the fourth quarter 2012 to $35.9 million, driven by higher revenue and Adjusted EBITDA margin expansion.
Fourth Quarter 2012 Financial Results
Gross Bookings and Net Revenue
Gross bookings declined two percent year over year in the fourth quarter 2012. This decline was primarily driven by lower air volume, partially offset by higher hotel, vacation package and car rental volumes, higher air fares and a shift in air supplier mix.
Net revenue was $189.7 million for the fourth quarter 2012, up seven percent year over year. This increase was primarily driven by higher hotel volume, higher advertising revenue and an increase in net revenue per air and hotel transaction. Net revenue in the fourth quarter 2012 also benefited from the addition of an airline servicing revenue stream for one of the company's private label distribution partners. Lower air volume and lower net revenue from travel insurance partially offset these increases. Hotel net revenue, including hotels booked on a standalone basis and as part of a vacation package, represented 39 percent of the company's total net revenue for the year ended December 31, 2012, up 279 basis points from 36 percent for the year ended December 31, 2011.
Standalone air net revenue was $60.1 million in the fourth quarter 2012, up one percent year over year. This increase was driven primarily by higher net revenue per airline ticket and the addition of an airline servicing revenue stream, partially offset by lower volume.
• Standalone hotel net revenue was $59.1 million in the fourth quarter 2012, up 18 percent year over year. This increase was driven primarily by higher volume and, to a lesser extent, higher net revenue per room night.
• Vacation package net revenue increased four percent in the quarter to $30.1 million due primarily to higher volume.
• Advertising and media revenue was $17.0 million in the fourth quarter 2012, up 22 percent year over year.
• Other net revenue, which is comprised primarily of car rental, cruise, destination services, travel insurance and airline hosting revenue, declined five percent year over year. This decline was driven primarily by a Department of Transportation regulation that went into effect January 2012, which no longer allows travel insurance to be preselected on the company's domestic websites and resulted in reduced travel insurance attachment rates.
Operational Highlights
Consumer Brands
• In December 2012, the Orbitz Flights, Hotels, Cars app for iPhone was one of 13 iPhone apps inducted into the App Store Hall of Fame, making it one of only 48 iPhone apps ever to receive such recognition, out of the more than 700,000 apps and games available on the App Store. Apple launched the Hall of Fame in 2010 to showcase "the best of the best on the App Store." Since its debut in June 2012, the Orbitz Flights, Hotels, Cars for iPhone app has maintained a 4.5 out of 5-star rating from consumers. Transactions coming through mobile devices, including smartphones and tablets, represented 25 percent of Orbitz.com standalone hotel transactions for December 2012.
• In December 2012, HotelClub launched its first iOS app, a single app optimized for both iPhone and iPad. The app allows HotelClub customers to earn member rewards on each hotel booking and supports multiple languages and currencies and was featured as a New & Noteworthy app in the App Store in Australia and New Zealand.
• In January 2013, ebookers launched an Android Hotels app offering a fast and easy way to search and book hotels in multiple languages and currencies via a native Android experience.
• In November 2012, ebookers launched Beach Map, an interactive tool that offers customers ideas and package deals to a variety of beach destinations. It acts as a convenient way for travelers to get inspiration on where to travel and for the best possible price. Not only does the Beach Map provide 125 different combinations of departures and destinations, it also shows the top 25 beach destinations related to the selected departure point for added inspiration.
• In January 2013, Orbitz reached milestones of 475,000 Facebook fans and 100,000 Twitter followers, representing increases of 55 percent and 8 percent, respectively, over the course of 2012.
• In December 2012, Orbitz Worldwide was recognized by leading U.S. social career community Glassdoor in its fifth annual Employees' Choice Awards, which celebrates the 50 Best Places to Work. The list is determined using feedback employees voluntarily and anonymously provide via online survey. Orbitz was the only online travel company to make the list and placed 26th overall, receiving a 4.0 out of 5.0 rating. Among technology companies, Orbitz placed 11th. Earlier in 2012, Glassdoor named Orbitz as America's favorite travel industry company to work for, as well as one of the top 25 companies for work-life balance.
Private Label Distribution
• In November 2012, Orbitz Worldwide Distribution launched a new multi-year partnership with Asiana Airlines to power air, hotel, car and dynamic package search and booking capabilities on the company's U.S. website.
• In January 2013, Orbitz Worldwide Distribution launched a new multi-year partnership with Finnair to power search and booking capabilities for air & hotel vacation packages on the company's U.S. website.
Partner Services
• During the fourth quarter 2012, Orbitz Worldwide signed multi-year agreements with Hilton Hotels & Resorts, Banyan Tree Hotels & Resorts and Worldhotels. The company also signed partnership agreements with a number of regional hotel groups including Metropark China, Centara Hotels and Resorts in Asia, Sun International Hotels in South Africa, Old English Inns in the United Kingdom and Lucien Barriere in France, among others.
• During the fourth quarter 2012, Orbitz Worldwide signed distribution agreements with LAN Airlines, Swiss International Air Lines, Darwin Airlines, Air China and TAM Airlines. In addition, the company starting offering Frontier Airlines' Classic and Classic Plus fares to customers.
• During the fourth quarter 2012, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including Tourism New Zealand, City of Palm Desert, Atlantic Canada Tourism Partnership, Metropolitan Tucson Convention and Visitors Bureau, Mammoth Mountain Ski Area, Vail Resorts, Naples Marco Everglades Convention and Visitors Bureau, Denver Convention and Visitors Bureau and Fort Worth Convention and Visitors Bureau.
• During the fourth quarter 2012, Orbitz Worldwide executed integrated media campaigns for partners including Energizer, the Cayman Islands and Empire State Development, New York's chief economic development agency which administers the world-famous I LOVE NEW YORK tourism program. The innovative marketing partnerships spanned a variety of platforms, including "Orbitz Originals," a series of short films that harness the power of online video to inspire travelers and drive travel bookings.
Outlook
For the first quarter 2013, the company expects:
• Net revenue in the range of $194 million to $200 million; and
• Adjusted EBITDA between $17 million and $21 million.
For the full year 2013, the company expects:
• Net revenue growth in the range of 2.5 percent to 5 percent; and
• Adjusted EBITDA growth between 5 percent and 10 percent.
