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Major Online Travel Affiliate to Sell Assets?

Major Online Travel Affiliate to Sell Assets?

Global online travel company Orbitz Worldwide is exploring strategic alternatives for one of its consumer brands.

The Chicago-based travel agency, which enables leisure and business travellers to search for and book a range of travel products and services, said it is looking into options for its Away Network - which runs the Away.com, Trip.com, GORP.com and AdventureFinder.com websites.

As well as the Away Network, Orbitz Worldwide owns and operates a portfolio of consumer brands such as CheapTickets, ebookers, HotelClub, RatesToGo and corporate travel brand Orbitz for Business.

Outlook Unaffected

Senior vice president of product strategy at Orbitz Worldwide, Sam Fulton, said the revenue and adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA), associated with the Away Network, is ‘immaterial’ to overall Orbitz Worldwide financial results.

He said the sale of some or all of the assets associated with the Away Network would not change the company's earnings outlook for 2013.

"As we assess the prioritisation of investments in different areas of our business, in particular in the context of the encouraging trends that we're seeing in hotel, we've made the determination that the elements of the Away Network, either collectively or individually, are likely to be more valuable to other parties," Fulton said.

Widened Losses

Orbitz, which was created in 1999 by a leading group of US airlines and subsequently encountered various acquisitions, reported huge quarter-four net losses last week.

For the three-month period up until December 31 2012, the company reported a net loss of $314.6 million, compared to a loss of $46.5 million for the same period last year.

This included a goodwill and intangible asset impairment charge of $321.2 million.

Revenue increased by 7% from $177.1 million for the same period in 2011, to $189.7 million for Q4 2012.

Apps and Social Networks

The company, which is listed on the New York Stock Exchange, said hotel net revenue, including hotels booked on a standalone basis and as part of a vacation package, represented 39% of the company's total net revenue for the year ended December 31, 2012.

Other 2012 operational highlights include the launch of the HotelClub’s first iOS app, one of its apps being inducted into the App Store Hall of Fame, and as of January 2013, Orbitz reached milestones of 475,000 Facebook fans and 100,000 Twitter followers.

The company expects first-quarter revenue to be between $194 million and $200 million.

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Pippa Chambers

Pippa Chambers

Freelance News Journalist at PerformanceIN - working to source the latest and breaking news in performance marketing. 

From newspapers to national B2B magazines and technology reporting, I have covered a variety of genres. NCTJ/NCE qualified.

Please email me at pippa.chambers@performancein.com and follow me @PippaC1

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