Orbitz Worldwide’s first quarter losses widened to $10.9 million, from $5.3 million in the red a year earlier, and the company attributed much of the drag to its under-performing U.S. consumer businesses.
Bright spots, however, were UK-headquartered eBookers and Orbitz’s private label business.
While expressing disappointment with the overall first quarter results, CEO Barney Harford said the company has been making inroads with technology and marketing investments for eBookers and expects better performance out of Orbitz.com, HotelClub and other consumer businesses as Orbitz Worldwide completes its transition to a new global technology platform.
That migration has been under way for several years.
Gross bookings, propelled by eBookers and Orbitz for Business, as well as higher airfares and average daily rates for hotels, increased 2% to nearly $2.8 billion during the quarter. Revenue was down 1% to $184.9 million.
Interestingly, air net revenue was up just 1% to $72.5 million despite a lower number of transactions but higher revenue per ticket.
Orbitz attributed its lower air transactions to some airlines deciding to minimize their marketing on “metasearch sites such as Kayak;” one airline’s fare structure changes, higher airfares; “and to a lesser extent, the lack of American Airlines’ content on the company’s Orbitz.com site.”
On the Orbitz/Travelport-American Airlines direct-connect dispute, it is understood the parties have no discussions under way.
Vacation package revenue for the quarter fell 7%, with lower net revenue per transaction from the company’s domestic leisure brands triggering the dropoff.
Looks like the same old story when it comes to market dominance. Usually the top 2 companies, Expedia and Travelocity in this case, slug it out at the top and the number 3 business struggles to compete. Too bad, hope Orbitz hangs in there as more competition is better for the consumer.