Orbitz is looking to offset the effect of eliminated booking fees in the U.S. by growing its inventory of hotels in Asia and Latin America, as its competitors broaden their hotel inventory in Europe.
Orbitz will further broaden its inventory beyond its 100,000 hotels after widening the number of direct agreements with hotel operators last year by about a third, Orbitz CEO Barney Harford said on a conference call with analysts last week.
Room-night bookings improve
Such growth would continue an upward trend in hotel bookings.
Orbitz improved its year-over-year room-night bookings in each quarter of last year and boosted fourth-quarter room-night bookings by 13% from a year earlier.
"We've talked before about building our global hotel business," Harford said on the earnings call. "We are particularly focused on increasing the number of hotels we offer in immature markets such as Asia and Latin America."
Overall, Orbitz had a fourth-quarter loss of $18 million. Revenue fell 2.8%, to $175 million, as a 17% jump in gross bookings was more than offset by the elimination of most U.S. air-booking fees.
Priceline.com last month said fourth-quarter profit doubled from a year earlier, to $78.5 million, as revenue surged largely from a wider inventory of European hotels.
Expedia Inc., meanwhile, said last month that revenue from global hotel bookings rose 16% in Q4; it plans to broaden its inventory of European hotel rooms, especially in Eastern Europe.
Travelport cancels IPO
Orbitz is approximately 50% owned by Travelport, which earlier this month canceled its intention to go public on the London Stock Exchange.
Travelport majority owner Blackstone Group had been looking to raise about $2 billion in the offering, which was announced in January, but decided against it because of market conditions.