Orbitz 2011 Annual Report Download - page 11

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11
Suppliers have increasingly focused on distributing their products through their own websites in lieu of using third
parties. Suppliers who sell on their own websites offer advantages such as their own bonus miles or loyalty points, which may
make their offerings more attractive than our offerings to some consumers.
Factors affecting our competitive success include price, availability of travel products, ability to package travel products
across multiple suppliers, brand recognition, customer service and customer care, fees charged to customers, ease of use,
accessibility, reliability and innovation.
Seasonality
Our businesses experience seasonal fluctuations in the demand for the products and services we offer. The majority of
our customers book leisure travel rather than business travel. Gross bookings for leisure travel are generally highest in the first
half of the year as customers plan and book their spring and summer vacations. However, net revenue generated under 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 half of the year 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 growth of our international operations or a change in our product mix.
Company Strategy
Our mission is to unlock the joy of travel by becoming the travel expert for the world, where our customers easily find
and book personalized travel options. Given that the hotel marketplace is approximately $300 billion and the online market
continues to be highly fragmented with low penetration rates, we believe this presents an opportunity to significantly improve
consumer experience and grow our business, leveraging our global platform.
In February 2012, with the successful migration of the remaining air, car and dynamic package paths of Orbitz.com, we
completed our global platform migration, a multi-year initiative to bring all of our consumer brands onto a common technology
platform. During the second half of 2011, we migrated our CheapTickets and HotelClub brands to the global platform. We
believe this technology platform provides meaningful improvements to both the speed and customer shopping experience on
our websites and enables us to deliver innovation to our customers more quickly.
In conjunction with our migration efforts, we have been focused on enhancing the consumer experience with the
development of tools and technologies to help users easily research travel options and by improving the quality of the content
we make available (such as user reviews, editorial descriptions, photographs and virtual tours). We are now poised to take full
advantage of having all of our consumer businesses on a common platform, and we are therefore able to focus our product and
technology investments in a number of key areas that we expect to drive performance improvements. Our key areas of focus
and investment are marketing optimization, funnel optimization and enhancing mobile offerings.
Marketing Optimization
We are focused on marketing optimization to drive consumers to our websites in a cost effective manner. We
successfully brought our SEM bidding for Orbitz, CheapTickets and HotelClub in house in 2011 with the launch of KOBE, our
keyword optimized bidding engine. With our continued development of KOBE and its application across other marketing
channels, including TripAdvisor, we are seeing improvements in marketing efficiency (with early results showing more
transactions for a given spend level and/or less spend required to generate a given number of transactions) and are striving for
increased efficiencies going forward.
We are also actively pursuing strategies to increase the amount of traffic coming to our websites through SEO, CRM, our
private label channel and Orbitz for Business. Our goal is to further increase brand awareness and loyalty so that consumers
come directly to our websites to book their travel, which we also promote with offline marketing as well as with social media.
In addition, our promotions, including Orbitz Insider Steals and Mobile Steals, provide significant value for consumers while
generating a high volume of transactions.
Funnel Optimization
Now that all of our consumer brands are on a common platform, we are dedicating resources to take advantage of its
new capabilities in order to further improve the user experience through “funnel optimization.” That is, we are focused on
creating a streamlined and personalized shopping experience for our users that will make it even easier and faster for them to
find and book travel. Our particular areas of investment include: tailoring custom landing pages by traffic source, optimizing