Priceline 2011 Annual Report Download - page 4

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3
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 and gross
profit.
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. We are the leader in the worldwide online hotel reservation
market based on room nights booked. Our strategy is to continue to participate broadly in online travel growth by expanding
our service offerings and markets.
• 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 rapidly 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, 2011, approximately 78% of our gross
bookings and approximately 88% of our consolidated operating income were generated through our international
brands - primarily Booking.com. We expect that our international operations will represent a growing percentage
of our total gross bookings and operating income over the long term. We believe that the opportunity to continue
to grow our business exists for the markets in which we operate. 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 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.
• Continue to be One of the Top Online Travel Businesses in North America for Value-Conscious Leisure
Travelers. Our Name Your Own Price® service in the United States allows consumers to save money in a simple
and compelling way. Buyers effectively trade off flexibility about brands and service features in return for prices
that are lower than those that can be obtained at that time through traditional retail distribution channels. We also
offer 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.
• Become a Leading Worldwide Online Rental Car Reservation Service. In May 2010, we acquired the
rentalcars.com business, a United Kingdom-based international rental car reservation service formerly known as
TravelJigsaw. Rentalcars.com offers its car hire services throughout the world, with customer support provided in
38 languages.