Increases in flight prices and volumes helped Orbitz, the parent of ebookers, double income in the third quarter of 2010 compared to the same period last year.
Orbitz reports doubling of Q3 profits
Increases in flight prices and volumes helped Orbitz, the parent of ebookers, double income in the third quarter of 2010 compared to the same period last year.
The online travel agency saw net profit rise to $15.3 million from $7 million in the third quarter of 2009. EBITDA, adjusted for the period, increased 7% to $47.4 million to from $44 million.
Barney Harford, president and CEO of Orbitz, said: “Orbitz Worldwide delivered solid year over year improvements in gross bookings, transactions and hotel room nights. ebookers delivered another strong quarter of growth with hotel room nights up 57% year over year.
“We also successfully completed the migration of our domestic hotel booking path to the global platform during the quarter, significantly improving the hotel booking experience and accelerating our pace of innovation.”
Orbitz has forecast a 1%-2% uplift in full year revenues after third quarter gross bookings rose 12% in the third quarter to $2.81 billion.
Net revenue stood at $194.5 million, four percentage points up year on year with international net revenue the star performer, up 8%, compared to a 3% rise on domestic revenues.
Orbitz said: “Net revenue was up primarily due to an increase in standalone hotel transactions, international air transactions and travel insurance revenue.
“These increases were partially offset by lower advertising revenue and a decline in revenue from the company’s airline hosting business.”
The third quarter report said marketing expense, largely comprised of search and banner advertising and offline advertising such as television, radio and print, increased 9% to $52.5 million.
“This increase was due primarily to higher online marketing spending driven by an increase in the cost per transaction for the company’s domestic and Hotelclub websites and higher transaction volume at ebookers,” it stated.
Orbitz forecast that marketing expense as a percentage of net revenue would end this year in line with 2009. It predicted a 4%-6% increase in EBITDA and a 19%-21% increase in the cost of revenue as a percentage of net revenue.
Foreign exchange rates were expected to be “relatively stable”.
