Priceline 2014 Annual Report Download - page 62

Download and view the complete annual report

Please find page 62 of the 2014 Priceline annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

Accommodation room night reservations increased by 36.9% for the year ended December 31, 2013, over the same period in 2012,
principally due to an increase in Booking.com, agoda.com and priceline.com Express Deals
®
and retail
accommodation room night reservations,
partially offset by a decline in our Name Your Own Price
®
opaque hotel room night reservations in part due to a concerted effort to emphasize
Express Deals
®
over Name Your Own Price
®
in our offline advertising campaigns. Booking.com, our most significant brand, includes over
425,000 properties on its website as compared to about 275,000 properties last year (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 these newer markets which are growing faster than our overall growth rate and our core European
market. Our priceline.com agency hotel reservations benefited from the integration of the growing number of properties on the Booking.com
extranet.
in rental car day reservations for rentalcars.com and priceline.com.
Name Your Own Price
®
and price-disclosed airline ticket reservations.
Revenues
We classify our revenue into three categories:
58
• 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 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 selling price of Name Your
Own Price
®
hotel room night, rental car and airline ticket reservations and vacation packages; (2) transaction revenues representing
the amount charged to a customer, less the amount charged by travel service providers in connection with (a) the accommodation
room reservations provided through our merchant price-disclosed hotel service at agoda.com and priceline.com and (b) the
reservations provided through our merchant rental car service at rentalcars.com and merchant Express Deals
®
hotel service at
priceline.com, which allows customers to see the price of the reservation prior to purchase but not the identity of the travel service
provider; (3) customer processing fees charged in connection with the sale of Name Your Own Price
®
hotel room night, rental car
and airline ticket reservations and merchant price-disclosed hotel reservations; and (4) ancillary fees, including GDS reservation
booking fees related to certain of the services listed above.
• Advertising and other revenues are derived primarily from KAYAK for sending referrals to travel service providers and OTAs as
well as from advertising placements on KAYAK's websites and mobile applications.
Year Ended December 31,
(in thousands)
2013
2012
Change
Agency Revenues
$
4,410,689
$
3,142,815
40.3
%
Merchant Revenues
2,211,474
2,104,752
5.1
%
Advertising and Other Revenues
171,143
13,389
1,178.2
%
Total Revenues
$
6,793,306
$
5,260,956
29.1
%