Priceline 2010 Annual Report Download - page 78

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The Priceline Group Strategy
The online travel category has continued to experience significant worldwide growth as consumer
purchasing shifts from traditional off-line channels to interactive online channels. Measured by room nights booked,
we are the leader in the online hotel reservation market internationally and in the deep discount segment of this
market in the United States. Our strategy is to continue to participate broadly in online travel growth by expanding
our service offerings and markets.
x Maintain and Grow Our Position as the Leading Worldwide Online Hotel Reservation Service.
The size of the travel market outside of the United States is substantially greater than that within the
United States. Historically, Internet penetration rates and e-commerce adoption rates of international
consumers have trailed those of the United States. However, international consumers are moving to
online means for purchasing travel. Accordingly, recent international online travel growth rates have
substantially exceeded, and are expected to continue to exceed, the growth rates within the United
States. Prior to 2004, substantially all of our revenues were generated within the United States. For
the year ended December 31, 2010, our international business – the significant majority of which is
currently generated by Booking.com – represented approximately 69% of our gross bookings, and
contributed approximately 82% of our consolidated operating income during that period. We expect
that our international operations will represent a growing percentage of our total gross bookings and
operating income over the long term. Because of what we believe to be superior growth rate
opportunities associated with international online travel, we intend to continue to invest resources to
increase the share of our revenues represented by international consumers and capitalize on
international travel demand.
The positioning of our Booking.com and Agoda hotel reservation services has given us access to a
broader international market. We intend to use Booking.com and Agoda to further develop our
worldwide operations, especially in geographic areas where Internet penetration and e-commerce
adoption are growing. We have begun, and intend to continue, to develop the means to share hotel
availability among our brands, which we believe will allow us to better satisfy demand across markets.
We believe that by promoting our brands worldwide, sharing hotel supply and customer flow and
applying our industry experiences in the United States and Europe to other international regions, we
can further expand our service internationally and maintain and grow our position as the leading
worldwide online hotel reservation service.
x Continue to be One of the Top Online Travel Businesses in North America for Value-Conscious
Leisure Travelers. Our Name Your Own Price® demand collection system in the United States allows
consumers to save money in a simple and compelling way. Buyers effectively trade off flexibility
about brands, service features and/or sellers in return for prices that are lower than those that can be
obtained at that time through traditional retail distribution channels. We have expended significant
resources to allow us to introduce price-disclosed retail services in the United States to our consumers
to compliment the Name Your Own Price® service. We believe that by offering a “one-stop-shopping”
solution to our customers, we can simultaneously fulfill the needs of those customers who are prepared
to accept the unique restrictions of our Name Your Own Price® service in exchange for receiving
significant savings relative to retail prices, as well as those customers who are less price sensitive and
require the certainty of knowing the full details of their travel itinerary prior to purchasing.
We intend to enhance our service offerings continually, particularly our retail offerings, by adding
competitive functionality, adding travel selection at competitive pricing, adding and improving the
content and merchandising on our website as well as “cross-sell” opportunities (for example, offering a
hotel customer the opportunity to add a rental car reservation to the transaction) to maximize customer
conversion.
x Become a Leading Worldwide Online Rental Car Reservation Service. In May 2010, we acquired
TravelJigsaw, a United Kingdom-based international rental car reservation service. TravelJigsaw
offers its car hire services in more than 4,000 locations in 80 countries in Europe, the Americas, Asia-
Pacific, Africa and the Middle East, with customer support provided in 20 languages.