Orbitz Worldwide believes new, as-yet-to-be launched private-label partnerships, including the one it plans to implement with American Express next year, will account for about 10% of its global revenue and adjusted earnings on an annualized basis.
In their third quarter earnings call today, Orbitz officials acknowledged that growth in the company's private label business in the quarter slowed compared with the pace set in the first half of the year, but that it will turn around once new partnerships such as the one with American Express kick in.
New partnerships in the pipeline for Orbitz's private label business include those with American Express,Rearden Commerce, Hawaiian Airlines, the Chicago Convention & Tourism Bureau and others which have not been announced.
In private label or so-called white-label deals, an online travel agency may provide inventory and booking services for another company without the private label supplier branding its involvement.
On the international front, Orbitz officials were heartened that international gross bookings increased 31%, driven by Ebookers, although total gross bookings climbed just 1%.
Gross bookings in the U.S., largely from Orbitz and Cheaptickets, declined 4% and were hampered by higher prices for vacation packages, officials said.
Barney Harford, Orbitz Worldwide CEO, attributed the strength at Ebookers to its use of the company's soon-to-be global hotel platform, and factors such as a focus on beach destinations and cities, as well as adding low-cost carrier content.
Cheaptickets is expected to complete its migration to the global platform by the end of the year and Orbitz.com is slated to make the switch early in 2012, Harford said.
In addition to the global platform initiative, Harford pointed to UI and feature improvements as well as deft use of analytics as bright spots for Orbitz Worldwide.
Overall in the third quarter, Orbitz Worldwide saw its net income decline 26% to $11.2 million. Revenue increased 4.3% to $202.9 million.
Asked about social media, Harford, referring to Facebook, said "we absolutely see this as an interesting channel to engage with..."
Citing its Facebook app, Orbitz 50 Faves, in which players use Orbitz-supplied game bids to vie for their favorites among 50 trips, Harford said the game attracted 3.5 million bids and 130,000 wall posts, and enabled Orbitz to double its fan base.