Hotelclub slowdown takes gloss off ebookers growth for Orbitz

Orbitz Worldwide expects all of its ebookers sites in Europe to have migrated to its global platform by the year-end, but has also admitted that it is “not satisfied” with its accommodation-only brand Hotelclub.

The update came during Orbitz Worldwide’s Q2 2008 earnings conference call.

Ebookers in the UK and Ireland moved onto the platform last year. In July, Belgium became the first non-English language site to migrate, followed quickly by Netherlands and Austria.

Orbitz Worldwide chief executive Steve Barnhart told analysts: “We remain on schedule to complete the migration of all of our ebookers sites through the new global platform by the end of 2008.

“The largest technology development efforts required for rolling out the platform across Europe are complete.”

During the quarters, ebookers gross bookings were up 50%, or 35% excluding forex adjustments,at $376m. Over the past four quarters, it has averaged growth of 43%, or 32% excluding forex.

However, despite the major European markets other than the UK still using the old platform “the largest portion of this growth continues to come from Continental European markets”.

The global platform is, among other things, optimised for search engine optimisation. “Where we’ve rolled our new platform out in Europe, we are seeing good improvement in traffic from SEO,” he said, declining to talk about specific growth rates.

However, Barnhart did say that in July “sourced 20% less of its transactions from paid search than it did a year ago”.

Its other major international brand, Hotelclub, saw a slowdown during the quarter, with the drop-off carrying over into the current period. “We are underperforming the growth rates of our largest competitors,” he said.  “We are not satisfied with this performance, and it clearly is not consistent with our goal of expanding our share of the international hotel-only marketplace. We are reviewing all of our marketing tactics and operations to enhance performance.”

Monetising traffic to its site through advertising is an increasingly important part of Orbitz Worldwide’s strategy. Ad revenues in the first six months of the year were 25% up on H1 07, with this growth expected to accelerate during Q3 and Q4.

“We have a portfolio of other advertising enhancements that we expect to make over the balance of 2008, and into 2009,” he said.

“As you prove out those enhancements, we will have the opportunity to roll them out to our worldwide sites where they are relevant and appropriate,” he said.

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