ebookers, which had struggled for years with a mish-mash of inventory platforms, led Orbitz Worldwide's transaction growth in the fourth quarter as the Europe-based online travel agency saw transactions climb 37% and net revenue jump 60%.
Orbitz Worldwide President and CEO Barney Harford says he's happy with ebookers' consolidated platform and "streamlined management," arguing that it is well-positioned as a full-service OTA in its 12 European markets.
Consider ebookers' fourth quarter numbers.
- Hotel room nights stay increased 69%.
- And, net revenue, because of the strong transaction growth, jumped 60%.
Harford describes the ebookers proposition as "a very encouraging turnaround."
He adds that ebookers' showed strength in air, hotels and dynamic packaging in the fourth quarter.
"The business is positioned to compete effectively in Europe," Harford told financial analysts today during OWW's fourth quarter financial results conference call.
However, Harford says he's not pleased with the overall performance of HotelClub, which just brought in Jeremy Bellinghausen to serve as its president.
Harford says HotelClub, headquartered in Australia, faces great competitive challenges in its standalone hotel business in Europe, where it competes against the much-larger Booking.com and Expedia's up-and-coming Venere.
Harford, though, says he's bullish about HotelClub's prospects in Asia Pacific, which accounts for about 60% of HotelClub's business.
Overall, OWW had a tough quarter.
Although gross bookings accelerated throughout the year and increased 17% to $2.5 billion in the fourth quarter, OWW posted a net loss of $18 million in the quarter on a 3% decline in revenue.
Orbitz tied its revenue decline in the fourth quarter and for 2009 as a whole to its decision to eliminate air-booking fees and to reduce hotel fees.
The $18 million loss in the fourth quarter primarily was tax-related, says Marsha Williams, the OWW CFO.
OWW's loss compares to more muscular results by its competitors.
The Wall Street Journal reported that OWW's operating margin in the fourth quarter was 3.4%, down from 13.3% a year earlier, because of higher costs.
Expedia Inc. turned a loss in the fourth quarter of 2008 into a $102.2 million profit in the fourth quarter of 2009.
And, Priceline more than doubled its profit in the fourth quarter of 2009 to $78.5 million.
Meanwhile, Harford says OWW is on a mission to become "one of the world's three primary hotel distribution platforms," along with Priceline and Expedia.
OWW saw its room nights increase 13% in the fourth quarter, and just 4% for the full year.
Harford hopes the strength shown by ebookers in Europe and HotelClub in Asia Pacific will give his global hotel-distribution platform goals some juice.
But, basically until now, because of ebookers' former weakness and HotelClub's poor performance, Orbitz has ceded Europe to its OTA competitors and is just now getting around to begin what it hopes will be a real battle.