Priceline 2010 Annual Report Download - page 72

Dear Stockholder,
Global economies began to show glimmers of improvement in 2010, and the leisure
travel industry felt the impact in the form of improved hotel occupancy rates and higher average
daily rates. Our business benefitted from these improving economic conditions, as well as our
continuing efforts to expand our network of customers and participating hotels. In 2010, the
Priceline Group - which consists of Booking.com, priceline.com, Agoda.com and TravelJigsaw -
became the global leader in online hotel reservations, with over 150,000 participating hotels
worldwide and 92.8 million room nights booked in 2010, an increase of 52% over 2009.
For full-year 2010, the Priceline Group had global gross travel bookings of $13.6 billion,
an increase of 47% over 2009. Gross travel bookings refer to the total value, generally inclusive
of all taxes and fees, of all travel services purchased by consumers. The Group had $786.8
million in operating income in 2010, which was a 67.1% gain over the prior year.
Our international operations contributed $9.5 billion in gross travel bookings – an
increase of 67% over the previous year (approximately 73% on a local currency basis). Our
international hotel business, comprised of Booking.com and Agoda, played a key role in fueling
this growth, as we continue to expand into new Asia-Pacific and South American markets and
build on our core European and North American markets.
Also during 2010, the Group expanded its international service offerings with the
acquisition of TravelJigsaw, a multinational car hire service, offering its reservation services in
more than 4,000 locations in 115 countries.
The year was a strong one for the Group’s U.S. business, which contributed $4.2 billion
in gross travel bookings, an increase of 14% versus 2009. The performance of the U.S. business
was driven mainly by growth in Name Your Own Price® and retail hotel room reservations which
benefited from higher average daily rates and our hotel partners’ use of promotional pricing to
drive demand in retail channels and use of our Name Your Own Price® services to fill excess
rooms without impacting retail pricing.
During 2010, the Company launched its first major initiatives in the mobile environment
with hotel booking and rental car apps for iPhone and Android devices. The apps take full
advantage of each device’s native functionality and enable consumers to book hotel rooms and
rental cars for same day stays and pick-up. Early booking data suggests that these apps appeal to
a growing group of travelers who prefer to book hotel rooms and rental cars after they’ve arrived
at their destination.
In 2011, the Priceline Group will focus on several key initiatives. We intend to continue
to build our international hotel business in new markets, including Asia-Pacific and South
America. We intend to continue to look for opportunities to increase the number of hotels
available on our Group websites by continuing to add hotels in existing markets. We intend to