Priceline 2014 Annual Report Download - page 53

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Results of Operations
Year Ended December 31, 2014 compared to Year Ended December 31, 2013
Operating and Statistical Metrics
Our financial results are driven by certain operating metrics that encompass the booking and other business activity generated by our
travel and travel related services. Specifically, reservations of accommodation room nights, rental car days and airline tickets capture the volume
of units purchased by our travel reservation services customers. Gross bookings is an operating and statistical metric that captures the total
dollar value, generally inclusive of taxes and fees, of all travel services booked by our customers and is widely used in the travel business.
International gross bookings reflect gross bookings generated principally by our Booking.com, agoda.com and rentalcars.com businesses and
domestic gross bookings reflect gross bookings generated principally by our priceline.com business, in each case regardless of where the
consumer resides, where the consumer is physically located while making a reservation or the location of the travel service provider or
restaurant. We follow a similar approach for reporting the international and domestic revenue and gross profit of those businesses.
Gross bookings resulting from accommodation room nights, rental car days and airline tickets reserved through our international and
U.S. operations for the years ended December 31, 2014 and 2013 were as follows (numbers may not total due to rounding):
Gross bookings increased by 28.4% for the year ended December 31, 2014 , compared to the same period in 2013 (growth on a local
currency basis was approximately 30% ), principally due to growth of 27.9% in accommodation room night reservations, 3% growth on a local
currency basis in accommodation ADRs, growth of 18.1% in rental car day reservations and 12.0% growth in airline ticket reservations.
International gross bookings grew by 31.0% (growth on a local currency basis was approximately 33% ) for the year ended December 31, 2014 ,
compared to the year ended December 31, 2013
, primarily as a result of growth in accommodation room night reservations for our Booking.com
and agoda.com businesses, as well as growth in rental car day reservations for our rentalcars.com business. The U.S. Dollar significantly
strengthened against the Euro during 2014, moving from an exchange rate of 1.38 U.S. Dollars per Euro as of January 1, 2014 to 1.21 U.S.
Dollars per Euro as of December 31, 2014. The U.S. Dollar strengthened further in January 2015 to an exchange rate of 1.13 U.S. Dollars per
Euro as of January 31, 2015. The U.S. Dollar has also strengthened against many other currencies since January 1, 2014. At these exchange
rates, the growth of our total and international gross bookings, expressed in U.S. Dollars, will be significantly adversely impacted in 2015. We
therefore believe that unit growth rates and total gross bookings, international gross bookings and gross profit growth on a local currency basis,
excluding the impact of foreign exchange rate fluctuations, are important measures to understand the fundamental performance of the business.
Domestic gross bookings increased by 13.4% for the year ended December 31, 2014 , compared to the year ended December 31, 2013 ,
primarily due to increases in priceline.com's retail airline ticket, retail hotel, Express Deals
®
hotel and retail rental car services, partially offset
by declines in priceline.com's Name Your Own Price
®
reservation services. Travel service providers typically provide a limited amount of
availability to opaque services like ours, especially during periods of healthy travel demand. As a result, the recent healthy travel environment in
the United States has had an adverse impace on our access to availability for our opaque reservation services.
Gross bookings resulting from reservations of accommodation room nights, rental car days and airline tickets made through our agency
and merchant models for the years ended December 31, 2014 and 2013 were as follows (numbers may not total due to rounding):
49
Year Ended December 31,
(in millions)
2014
2013
Change
International
$
43,639
$
33,300
31.0
%
Domestic
6,661
5,873
13.4
%
Total
$
50,300
$
39,173
28.4
%