Priceline 2011 Annual Report Download - page 6

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5
Name Your Own Price® Airline Tickets. Our Name Your Own Price® airline ticket service operates in a manner
similar to our Name Your Own Price® hotel room reservation service. To make an offer, a customer specifies: (1) the origin and
destination of the trip, (2) the dates on which the customer wishes to depart and return, (3) the price the customer is willing to
pay, and (4) the customer’s valid credit card to guarantee the offer. When making an offer, consumers must agree to:
• fly on any one of our participating airline partners;
• leave at any time of day between 6 a.m. and 10 p.m. on their desired dates of departure and return;
• purchase only round trip coach class tickets between the same two points of departure and return;
• accept at least one stop or connection;
• receive no frequent flier miles or upgrades; and
• accept tickets that cannot be refunded or changed.
If a customer’s offer is not accepted, but we believe the offer is reasonably close to a price that we would be willing to
accept, we will attempt to satisfy the customer by providing guidance to the customer indicating that changing certain
parameters of the offer would increase the chances of the offer being accepted.
Retail Airline Tickets. We also offer our customers in the United States the ability to purchase retail airline tickets at
disclosed prices and with disclosed itineraries. The airline sets the retail price paid by the consumer and is the merchant of
record for the transaction. These airline tickets do not have the restrictions associated with our Name Your Own Price® service.
For example, in addition to having fully disclosed itineraries, retail airline tickets are generally changeable and cancellable for a
fee.
With respect to each of our airline, hotel and rental car services, we believe the combination of our Name Your Own
Price® model and the retail model allows us to provide a broad array of options to value-conscious travelers, while providing us
with diverse streams of revenue.
Vacation Packages. Our vacation package service allows consumers in the United States to purchase packages
consisting of airfare, hotel and rental car components. Consumers can select the exact hotel or resort that they want to reserve,
and then select either a retail airline ticket or an opaque airline ticket for the air component of their package. In addition,
customers can elect to add a rental car to their package. Vacation packages are sold at disclosed prices, although consumers
cannot determine the exact price of the individual components on our website.
Destination Services. We currently offer customers in the United States the opportunity to purchase destination
services such as parking, event tickets, ground transfers, tours and other services available at their travel destinations. This
service is offered to consumers as part of the process of booking an air, hotel, rental car and vacation reservation, and also as a
standalone service.
Cruises. We also offer price-disclosed cruise trips through World Travel Holdings, Inc. ("WTH"), an agent
representing major cruise lines. Our cruise service allows consumers in the United States to search for and compare cruise
pricing and availability information from cruise lines, and to purchase cruises online or through a call center by selecting from
our published offerings and prices. We receive commissions from WTH on successful cruise bookings.
Travel Insurance. We offer our air, hotel and vacation package customers in the United States an optional travel
insurance package that provides coverage for, among other things, trip cancellation, trip interruption, medical expenses,
emergency evacuation, and loss of baggage, property and travel documents. We also offer our rental car customers in the
United States the opportunity to purchase collision damage waiver insurance. The travel insurance is arranged for by
BerkelyCare, a division of Affinity Insurance Services, Inc. and underwritten by Stonebridge Casualty Insurance Company, an
AEGON Company. We retain a fee for every optional insurance package purchased by our customers.
While we are currently focused on the travel services described above, over time, we may evaluate the introduction of
other services that we believe could enhance the travel experience of our customers.