Priceline 2014 Annual Report Download - page 54

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Agency gross bookings increased 31.3% for the year ended December 31, 2014 , compared to the year ended December 31, 2013 ,
primarily due to growth in Booking.com accommodation room night reservations, priceline.com's retail airline ticket, rental car and hotel
reservation services, and rentalcars.com rental car reservation service. Merchant gross bookings increased 14.0% for the year ended
December 31, 2014 , compared to the year ended December 31, 2013 , primarily due to increases in agoda.com hotel reservation services,
rentalcars.com rental car reservation services and priceline.com Express Deals
®
hotel and retail hotel reservation services, partially offset by
declines in priceline.com's Name Your Own Price
®
services.
Units sold for accommodation room nights, rental car days and airline tickets for the years ended December 31, 2014 and 2013 were as
follows:
Accommodation room night reservations increased by 27.9% for the year ended December 31, 2014 , compared to the year ended
December 31, 2013 , due to an increase in Booking.com, agoda.com and priceline.com accommodation room night reservations. Booking.com,
our most significant brand, included over 600,000 properties on its website as of February 13, 2015 , which included over 245,000 vacation
rental properties, compared to approximately 425,000
properties as of February 18, 2014, which included over 110,000 vacation rental properties
(updated property counts are available on the Booking.com website). Booking.com has added properties over the past year in its core European
market as well as higher-growth markets such as North America (which is a newer market for Booking.com), Asia-Pacific and South America.
An increasing amount of our business from a destination and point-of-sale perspective is conducted in our newer markets which are growing
faster than our overall growth rate and our core European market.
Rental car day reservations increased by 18.1% for the year ended December 31, 2014 , compared to the year ended December 31,
2013 , due to an increase in price-disclosed rental car day reservations for rentalcars.com and priceline.com, partially offset by a decline in
priceline.com's Name Your Own Price
®
rental car reservation service.
Airline ticket reservations increased by 12.0% for the year ended December 31, 2014 , compared to the year ended December 31, 2013
,
due to an increase in price-disclosed airline ticket reservations for priceline.com driven primarily by increased paid advertising placements on
KAYAK (which began in the third quarter of 2013), partially offset by a decline in priceline.com's Name Your Own Price
®
airline ticket
reservation service.
Revenues
We classify our revenue into three categories:
50
Year Ended December 31,
(in millions)
2014
2013
Change
Agency
$
42,892
$
32,672
31.3
%
Merchant
7,409
6,501
14.0
%
Total
$
50,300
$
39,173
28.4
%
Year Ended December 31,
(in millions)
2014
2013
Change
Room Nights
346.0
270.5
27.9
%
Rental Car Days
51.8
43.9
18.1
%
Airline Tickets
7.8
7.0
12.0
%
• Agency revenues are derived from travel related transactions where we are not the merchant of record and where the prices of the
travel services are determined by third parties. Agency revenues include travel commissions, GDS reservation booking fees related
to certain travel services, travel insurance fees and customer processing fees and are reported at the net amounts received, without
any associated cost of revenue. Substantially all of the revenue for Booking.com is agency revenue comprised of travel
commissions.
• Merchant revenues are derived from services where we are the merchant of record and therefore charge the customer's credit card
for the travel services provided. Merchant revenues include (1) transaction revenues representing the price of Name Your Own
Price
®
hotel, rental car and airline ticket reservations and vacation