Orbitz Worldwide, Inc. Reports Fourth Quarter and Full Year 2011 Results
02/17/2012|10:06:01 AM|phx.corporate-ir.net

Chicago, February 16, 2012 - Orbitz Worldwide, Inc. (NYSE: OWW) today announced results for the fourth quarter and full year ended December 31, 2011.

"2011 was an investment year for Orbitz Worldwide, and we are pleased to be announcing today the completion of our multi-year global platform migration. While the first half of 2011 was challenging from a performance perspective, we continue to be pleased with the second half improvements in the trajectory of our US leisure brands that have continued into the first quarter of this year," said Barney Harford, CEO of Orbitz Worldwide. "In 2012 we look forward to reaping the benefits of having all of our consumer-facing businesses on a common platform and being able to focus our efforts on innovation and growth."

Fourth Quarter 2011 Financial Highlights

The company reported a net loss of $46.5 million or $0.44 per diluted share for the fourth quarter 2011 compared with a net loss of $78.0 million or $0.76 per diluted share for the fourth quarter 2010. The net loss for both periods was due to non-cash goodwill and intangible asset impairment charges. Adjusted EBITDA was $30.1 million for the fourth quarter 2011, an increase of 14  percent year over year.

Gross Bookings and Net Revenue

Gross bookings declined one percent year over year. The decrease in gross bookings was driven primarily by lower volume, partially offset by higher air fares, a mix shift towards international air carriers and higher average daily rates ("ADRs") for hotel rooms. Total hotel gross bookings, including hotels booked on a standalone basis and as part of a vacation package, increased four percent year over year due primarily to ADR expansion.

Net revenue was $177.1 million for the fourth quarter 2011, exceeding the top end of the company's guidance range and down three percent year over year. This decline was due primarily to the fact that net revenue for the fourth quarter 2010 benefited from a $5.6 million non-cash reduction to the company's unfavorable contract liability upon American Airlines' termination of the Charter Associate Agreement. Excluding this one-time benefit, net revenue for the fourth quarter 2011 was flat year over year.

Hotel net revenue, including hotels booked on a standalone basis and as part of a vacation package, represented 36.3 percent of the company's total net revenue for the year ended December 31, 2011, up from 35.6 percent for 2010. Net revenue from ebookers represented 23 percent of the company's total net revenue for the year ended December 31, 2011, up from 18 percent for 2010. International net revenue increased to 29 percent of the company's total net revenue for full year 2011, up from 23 percent for 2010.

Standalone air net revenue was $59.3 million in the fourth quarter 2011, down 11 percent year over year. This decline was driven in part by a one-time benefit recorded to air revenue in the fourth quarter 2010 to reduce an unfavorable contract liability. Air revenue also declined due to lower air volume for the company's domestic leisure brands driven by actions taken by certain airlines earlier in the year to limit the forward distribution of their fares on meta-search sites, higher air fares and a fare structure change implemented by a major airline. Higher net revenue per airline ticket for the company's domestic leisure brands partially offset the lower volume. ebookers air net revenue was down year over year due to lower net revenue per airline ticket, partially offset by higher air volume.

Standalone hotel net revenue was $50.1 million in the fourth quarter 2011, down 3 percent year over year. This decline was driven primarily by lower volume for HotelClub, partially offset by continued strength at ebookers.

Vacation package net revenue increased 11 percent in the quarter to $29.0 million driven by ebookers. ebookers vacation package net revenue increased due primarily to higher volume as a result of the company's strategic focus on vacation packages, particularly on promoting beach destinations, and the success of new product offerings introduced in late 2010.

Advertising and media revenue increased 12 percent year over year in the fourth quarter to $14.0 million due primarily to higher display revenue.

Other net revenue, which is comprised primarily of car rental, cruise, destination services, travel insurance and airline hosting revenue, declined two percent year over year. This decline was primarily due to lower car revenue driven by lower car ADRs, volume and breakage and due to lower hosting revenue driven by the termination of a remaining airline hosting agreement in July 2011. This decline was partially offset by higher travel insurance revenue driven by higher air fares, higher attachment rates, and the shift to a new travel insurance provider at ebookers which resulted in higher economics and an improved product offering.

At December 31, 2011, cash and cash equivalents were $136.2 million, up 40 percent from $97.2 million at December 31, 2010.

Operational Highlights

Consumer Brands

In February 2012, Orbitz Worldwide completed its global platform migration, a multi-year initiative to bring all of its consumer brands onto a common technology platform, with the successful migration of the remaining air, car and dynamic packages paths of Orbitz.com. During the fourth quarter 2011 the company migrated CheapTickets and HotelClub to the global platform.

In November 2011, Orbitz Worldwide announced it signed a multi-year agreement for Orbitz.com to be the primary travel booking partner for AOL Travel. The partnership went live in February 2012. Visitors to AOL Travel can now book hotels, vacation packages, flights, rental cars, cruises and more on Orbitz.com, and Orbitz.com customers now have exclusive access to AOL travel guides.

Orbitz Worldwide made strong progress in the growth of its mobile channel in 2011 for air, car, dynamic packaging and, in particular, hotel. In December 2011, over 12 percent of hotel searches across the company's brands were made on mobile devices, up from just five percent in December 2010. In 2011, Orbitz Worldwide received a number of industry distinctions including nominations for “Best Mobile Travel App,” “Best Mobile Website” and “Best Mobile Strategy” in the Eye for Travel mobile travel competition and winning the "Best Mobile Application 2011 Travolution Award” for the ebookers Explorer App. Recent product launches include:

In November 2011, Orbitz relaunched a faster, more powerful version of its mobile website m.orbitz.com making it easy for travelers to search for and book hotel rooms, airline tickets, car rentals and, in a feature unique to Orbitz Worldwide brands, vacation packages from any web-enabled mobile phone.

In December 2011, Orbitz Worldwide launched the "Mobile Steals" program offering mobile-exclusive discounts of up to 50% off hotel rates in more than 75 markets through all mobile channels including the mobile websites m.orbitz.com, m.cheaptickets.com and m.ebookers.com, and the company's native applications for iPad, iPhone and Android.

In December 2011, ebookers.com launched Hotels by ebookers App for iPhone, a native application that gives customers an intuitive search-and-book experience designed specifically for iPhone and offers travelers powerful comparison tools, secure booking in just three taps. Orbitz.com launched a similar Hotels by Orbitz App for iPhone in February 2012. 

Corporate Travel

In December 2011, Orbitz for Business introduced 'Guest Traveler' to manage recruitment and meeting/incentive travel. This feature allows companies to streamline their processes for non-employee travel, saving time and costs while gaining more control and visibility of this travel segment.

In January 2012, Orbitz for Business announced a new partnership with Limos.com, the world's largest online marketplace for private car services, adding over 2,000 local town car and limousine suppliers to complement its existing portfolio of leading car rental providers. Orbitz for Business customers can now search, compare and book private car services directly through the familiar Orbitz for Business interface, with integrated reporting and access to negotiated discounts of up to 40 percent off standard rates.

Partner Services

In February 2012, Orbitz Worldwide signed a new multi-year marketing and distribution agreement with United Airlines that gives Orbitz.com, CheapTickets and Orbitz for Business customers access to all United and Continental fares, schedules and inventory.

In the fourth quarter 2011, Orbitz Worldwide signed marketing and distribution agreements with Virgin Atlantic and Etihad Airlines.

During the fourth quarter, Orbitz Worldwide reached partnership agreements with a number of regional hotels and hotel groups including The Hay-Adams in Washington, D.C., Luabay Hotels, JKS Hotels and SBH Hotels in Spain, Arc Avenues Hotels and Teneo Suites in France, Isrotel Hotels in Israel, Attitude Resort in Mauritius, Premier Inn in United Arab Emirates, Moli Apartments in London, Relais & Chateaux Santa Teresa in Rio de Janeiro and 8Hotels primarily in Australia with properties in Indonesia and France.

In December 2011, ebookers signed an agreement with SilverRail. Following the launch of this partnership, customers will have the ability to book high-speed rail travel through ebookers websites.

During the fourth quarter, Orbitz Worldwide signed partner marketing contracts with a number of destination marketing organizations including Mexico Tourism, Ixtapa Zihuatanejo Convention and Visitors Bureau, Los Cabos Convention and Visitors Bureau, Tourism Whistler, Ski Utah, New Orleans Convention and Visitors Bureau, Jackson Hole Tourism Board, Texas Tourism, Colorado Tourism and Daytona Beach Convention and Visitors Bureau. Orbitz Worldwide has partner marketing agreements with over 225 destination marketing organizations.


For the first quarter 2012, the company expects:

Net revenue in the range of $187 million to $193 million; and

Adjusted EBITDA between $17 million and $20 million.

For the full year 2012, the company expects Adjusted EBITDA to grow in the high single to low double digits year over year.