Global economic uncertainty hits Orbitz outlook, ebookers and mobile see growth

Second quarter growth of 28% in room nights achieved by ebookers bolstered parent company Orbitz as it reported flat revenues but declining profits for the period.

Net income for the three months to the end of June stood at $4.6 million compared to $8.8 million in the same period in 2011.

Year to date net revenue is up 2% at $6,113 million while net revenue is up 1% at £390 million. Adjusted EBITDA (a measure of profitability after costs) stands at £53 million, down 6% year on year.

Barney Harford, chief executive of Orbitz Worldwide said: “Despite a challenging economic environment in Europe in particular, we grew room nights 3%, consistent with the first quarter, led by 28% growth at ebookers.

“Our US distribution business grew room nights 19%, ahead of the planned launch of our American Express Consumer Travel Network partnership in the third quarter.

“Our outlook for the third quarter and balance of the year is impacted by the global economic uncertainty that intensified during the second quarter and has continued into the third quarter.

“We continue to see very strong growth in mobile as we deliver new mobile apps and services across our global brands. Mobile, defined broadly to include smartphones and tablets, now represents 20% of standalone hotel transactions.”

To date this year Orbitz has seen growth in both its standalone hotel and package bookings while its standalone air bookings have fallen 3% on the second quarter and 2% for the year to date due to lower domestic air volume.

New Department of Transport rules meaning travel insurance cannot be pre-selected on domestic US websites contributed to a further 13% decline in a grouping of other revenue streams including cruise, car rental, destinations services and airline hosting.

The value of domestic business for the Chicago-based travel firm has increased 2% but international business is declining, by 7% in the second quarter and 2% in the six month period.

Looking ahead Orbitz said it expects net revenue in the third quarter to be between $197 million and $203 million and adjusted EBITDA of between $32 million and $38 million.

For the full year it has forecast net revenue to be between 2% and 4% up and EBITDA to be between flat or up 5% year on year.

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