Priceline 2010 Annual Report Download - page 77

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International: Price-Disclosed Hotel Reservation Services. We offer a retail price-disclosed hotel
reservation service through our international operations, which consist primarily of Booking.com B.V., one of the
world’s leading Internet hotel reservation services, with more than thirty offices worldwide and priceline.com
Mauritius Company Limited (formerly known as the Agoda Company, Ltd.), an Internet hotel reservation service
with operations primarily in Thailand (“Agoda”). Booking.com works with over 120,000 chain-owned and
independently owned hotels in 99 countries offering hotel reservations on various websites and in 41 languages. For
geographic related information, see Note 18 to the Consolidated Financial Statements.
International: Price-Disclosed Rental Car Reservation Services. We offer a retail price-disclosed rental
car reservation service through TravelJigsaw Limited (“TravelJigsaw”), a Manchester, U.K.-based rental car
reservation service, which we acquired in May 2010. TravelJigsaw has locations in 80 countries in North America,
South & Central America, Europe, Asia, Australia, the Caribbean, Africa and the Middle East. Certain members of
our management own a noncontrolling interest in TravelJigsaw. See Note 13 to the Consolidated Financial
Statements for further details. For geographic related information, see Note 18 to the Consolidated Financial
Statements.
United States: Name Your Own Price® Travel Services. We have developed a unique pricing system
known as a “demand collection system” that uses the information sharing and communications power of the Internet
to create a different way of pricing services. We believe our services have created a balance between the interests of
buyers, who are willing to accept trade-offs in order to save money, and sellers, who are prepared to generate
incremental revenue by selling their services at below retail prices, provided that they can do so without disrupting
their existing distribution channels or retail pricing structures. Our demand collection system allows consumers to
specify the price they are prepared to pay when submitting an offer for a particular leisure travel service. We then
access databases in which participating suppliers file secure discounted rates not generally available to the public, to
determine whether we can fulfill the customer’s offer and decide whether we want to accept the offer at the price
designated by the consumer. This system uses the flexibility of buyers to enable sellers to accept a lower price in
order to sell their excess capacity. We believe that our demand collection system addresses limitations inherent in
traditional seller-driven pricing mechanisms in a manner that offers substantial benefits to both buyers and sellers.
We often refer to services offered through our Name Your Own Price® service as “opaque” services because not all
aspects of the travel service are visible to the consumer before making an offer.
United States: Retail Travel Services. In the United States, we offer customers the ability to purchase
price-disclosed hotel room reservations, rental car days, airline tickets, vacation packages, destination services and
cruises at retail prices. In these transactions, the customer typically selects hotel reservation, rental car, airline flight
or other travel itineraries from an array of results produced in response to the customer’s request. These results
usually include the identity of the travel supplier, the exact price of the itinerary, and other details relating to the
itineraries. In some circumstances, the customer pays us at the time of reservation, and in other circumstances, the
customer pays the travel supplier directly at the time of travel.
We believe that the combination of our retail price-disclosed model and our Name Your Own Price® model
allows us to provide a broad array of options to value-conscious travelers, while providing us with diverse streams
of revenue.