Leisure business driving travel market recovery: Orbitz
Published: 06 Nov 2009
Online travel company Orbitz Worldwide has posted a quarterly profit. Net income for the third quarter was $7 million compared with a net loss of $287 million last year.
Net revenue was $187 million for the third quarter, down 22 percent (21 percent on a constant currency basis) from the third quarter of last year.
This net revenue decline was due primarily to the removal of most air booking fees and the significant reduction of hotel booking fees on the company’s domestic websites, as well as a decline in average hotel room rates globally.
The company announced $44 million in Adjusted EBITDA for the third quarter, slightly up from the third quarter of last year, despite the removal of flight booking fees, the elimination of hotel change and cancellation fees and the reduction in hotel booking fees.
Orbitz achieved accelerating worldwide transaction growth in the third quarter and fourth quarter performance to date shows further acceleration, stated the company.
“With regard to the market, it’s clearly very weak. We do think it is gradually improving,” Harford told Reuters in an interview. “But it’s really the leisure market that is driving the recovery right now.”
“On the other hand, it’s the business market where you’re still seeing that weakness,” Harford said. “While business travel is getting better each quarter, that is still a challenged sector.”
The company witnessed a 27 percentage point increase in the year-on-year growth rate in air tickets in the third quarter 2009 as compared with the first quarter 2009.
In Europe, ebookers delivered 43 percent year-on-year growth in hotel room nights as a result of its migration to the global platform and improved hotel supply.
Nine months
For the nine months ended September 30, 2009, net revenue was $563 million, down 18 percent (16 percent on a constant currency basis) from the same period of 2008.
The company reported a net loss of $319 million compared with a net loss of $307 million for the same period last year.
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