Orbitz Worldwide says deteriorating performance from two marketing partners -- a metasearch company and a travel research firm -- negatively impacted domestic air bookings and the bottom line in the third quarter.
Orbitz declined to identify the two companies.
Barney Harford, Orbitz Worldwide president and CEO, alleged that the unnamed metasearch company was not observing exclusivity obligations for Orbitz and this was a driving factor adversely impacting domestic air net revenue, which was flat in the third quarter.
Orbitz, according to a source, has approached several metasearch companies and pushed for an exclusive online travel agency relationship on flights in exchange for a revenue share. Under this arrangement, Orbitz would be the only OTA with pricing displayed in search results when Orbitz offered that flight.
It appears that Orbitz has an exclusive OTA relationship, as described, with Bing Travel for domestic flights.
But, Orbitz's one-time exclusive OTA relationship with Kayak appears to have taken a twist.
Dating at least as far back as last summer, and possibly much earlier, Kayak continued displaying flight pricing from Orbitz and sister company CheapTickets, but added a listing from rival OTA Expedia.com to the search results grid.
However, Kayak doesn't display Expedia.com airfares, as Kayak does for Orbitz and CheapTickets. Instead, users get a link to Expedia.com, where they can click over to see the airfares.
The Kayak search grid with Orbitz, CheapTickets, Expedia.com and often an airline, too, looks like this:
Separately, Orbitz and Kayak declined to discuss whether Harford's comments were directed at Kayak.
But, according to a source at a third-party company, it's possible that Orbitz believes that adding Expedia.com to the Kayak search grid is a violation of the spirit of the Orbitz-Kayak agreement.
At any rate, if deteriorating results from a metasearch company really impacted Orbitz's results, it would have to involve substantial volumes and a major brand, whether it is Kayak or another metasearch company.
A Kayak spokesman declined to comment on the question, stating, "As a normal course of business, we can't comment one way or another on anything related to one of our partners as each of those relationships is covered under confidentiality."
Negotiations are continuing with the metasearch company, Harford said.
In addition, Harford said Orbitz was impacted by a decline in the quality of leads from a travel research marketing partner. Likewise, Orbitz refused to name the company.
In other news from Orbitz Worldwide's third quarter earnings call, Harford said he is disappointed with the company's hotel performance, noting that the goal is to be one of the three primary OTA global hotel players. He added that Orbitz knows what it must do to achieve that goal and will demonstrate its resolve.
On the hotel front, Harford said Orbitz has decided it will migrate its HotelClub unit to the Orbitz Worldwide global hotel platform, which currently powers eBookers, Orbitz.com and CheapTickets.
Harford said he's optimistic that migrating HotelClub off legacy systems and onto the new platform will help its management team make progress and benefit HotelClub's business in the Asia Pacific region.
He added that the platform would help HotelClub achieve "global consistency" in its offerings.
Asked if it was always part of the plan to put HotelClub on the global platform, an Orbitz spokesman said the recently installed management team at HotelClub was given the opportunity to assess whether parts of the legacy platform were worth keeping, but it was decided that transitioning to the global platform would be the optimum choice.