Orbitz 2008 Annual Report Download - page 16

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Our current competitors include online travel companies, traditional offline leisure travel companies and suppliers. In addition, we compete internationally
with smaller regional operators. The companies that we compete with include the following:
•
Among online travel companies, our major competitors primarily include expedia.com, hotels.com and hotwire.com, which are owned by
Expedia, Inc.; travelocity.com and lastminute.com, which are owned by Sabre Holdings Corporation; and priceline.com and bookings.com,
which are owned by priceline.com Incorporated.
•
In the offline travel company category, our largest competitors include companies such as Liberty Travel, Inc. and American Express
Travel Related Services Company, Inc.
•
We compete with travel suppliers, such as airlines, hotel and rental car companies, many of which have their own branded websites and
toll-free numbers through which they generate business.
Travel suppliers have been steadily focusing on increasing distribution of their services through their own websites in lieu of using third parties like us.
Suppliers who sell on their own websites typically do not charge a booking or service fee, and, in some instances, offer advantages such as their own bonus miles
or loyalty points, which could make their offerings more attractive than our offerings to some consumers.
Factors affecting our competitive success include price, availability of travel products, brand recognition, customer service and customer care, fees charged
to travelers, ease of use, accessibility and reliability.
Seasonality
Some of our businesses experience seasonal fluctuations in the demand for the products and services we offer. The majority of our customers book travel for
leisure purposes rather than for business. Gross bookings for leisure travel are generally highest in the first and second calendar quarters as customers plan and
book their spring and summer vacations. However, net revenue from the merchant model is generally recognized when the travel takes place and typically lags
bookings by several weeks or longer. As a result, our cash receipts are generally highest in the first and second calendar quarters and our net revenue is typically
highest in the second and third calendar quarters. Our seasonality may also be affected by fluctuations in the travel products our suppliers make available to us
for booking, the continued growth of our international operations or a change in our product mix.
Company Strategy
Our objective is to build our leadership position in the global online travel industry while continuing to improve our financial performance. The key
elements of our strategy include:
Capture growth opportunities in non-air travel. We are a leader in air travel, the largest online travel segment. This leadership position has enabled us to
drive growth in non-air travel categories, such as hotels and dynamic packages. These non-air travel categories generally have higher margins, and we believe
these categories will present significant growth opportunities for us. We have increased our penetration in non-air travel categories, and we intend to continue
growing our net revenue generated from these categories by:
•
expanding our relationships with hotels through our global hotel supply team;
•
expanding our relationships with destination services providers, such as providers of ground transportation, event tickets and tours, to
increase our revenue per transaction;
•
promoting vacations and dynamic packages through targeted advertising;
9
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008