EDreams Odigeo says the package travel market in key European markets is down due to the terrorist threat in north Africa, but non-package sales have more than made up for the downturn.
The leading European OTA reported positive full-year figures today ahead of expectations with bookings up 10% and retained revenue up 6%. EBITDA was also up 6% to €85.3 million.
The figures for the 12 months ended March 31, revealed a 20% upturn in flight bookings in “expansion markets” including the UK, driven by both regular and low-cost carrier sales.
Revenue margin in these markets grew 16% year on year to €208.2 million, eDreams Odigeo reporting a significant increase in bookings in the US. Overall revenue margin was €463.3 million.
The OTA’s core markets of Spain, Italy and France saw a 2% increase in bookings to 5.4 million, again driven by flight sales, but revenue margin was down 0.3% year on year to €255.1 million.
The firm said this was “in line with the pricing and marketing re-orientation strategy” and was partly offset by increased revenues from its advertising and metasearch divisions.
The last quarter of 2015/16 saw all three core markets grow its revenue margin for the first time since September 2003 as both volume and market share improved.
A breakdown of product type revealed a shift away from packages in both Germany and France, two markets that traditionally were strong in Egypt and Tunisia.
Non-flight bookings showed an improving trend throughout the year but ended 3% down for the 12 months on €925 million. Non-flight revenue margin was up 10% to €96 million.
In a trading statement the firm said: “Bookings in non-flight were down in part to a decrease in the packaged tour business in France and Germany as a result of the terrorist attacks and political environment in North Africa….”
The decline was partly offset by improvement in eDreams Odigeo’s dynamic packaging business. In the UK the firm operates Opodo and eDreams brands and does not sell traditional packages.
Moves to diversify marketing away from “expensive traffic” [PPC and Google] to less costly channels and customer retention were paying off, added eDreams Odigeo.
Dana Dunne, chief executive, said: “These results reflect significant progress made this year and a moment of transition for the business, with bookings, revenue margin and EBITDA all growing at a steady rate.
“Our expansion markets continue to grow strongly and our core markets returned to growth for a third consecutive quarter.”Dunne said he was particularly please by the increase in mobile bookings, which he said at 24% for flights was ahead of the industry average.
He added: “Looking ahead, we see a positive market environment for the company which will enable us to make travel easier, more accessible and better value for customers.
“We expect further growth in bookings, revenue margins and adjusted EBITDA and to capitalise on the growth in the OTA market fuelled by the move from offline to online.”