Priceline 2015 Annual Report Download - page 53

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Results of Operations
Year Ended December 31, 2015 compared to Year Ended December 31, 2014
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 booked 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, net of cancellations, 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 U.S. 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. We follow a similar approach for reporting the international and U.S. 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, 2015 and 2014 were as follows (numbers may not total due to rounding):
Year Ended December 31,
(in millions)
2015
2014
Change
International $ 48,971
$ 43,639
12.2 %
U.S. 6,557
6,661
(1.6)%
Total $ 55,528
$ 50,300
10.4 %
Gross bookings increased by 10.4% for the year ended December 31, 2015 , compared to the year ended December 31, 2014 (growth on a constant
currency basis was approximately 25% ), principally due to growth of 24.9% in accommodation room night reservations, 2% growth on a constant currency basis
in ADRs and growth of 15.6% in rental car day reservations, partially offset by the impact foreign exchange rate fluctuations. International gross bookings grew by
12.2% for the year ended December 31, 2015 compared to the year ended December 31, 2014 (growth on a constant currency basis was approximately 28% ).
International gross bookings growth on a constant currency basis was primarily attributable to growth in accommodation room night reservations for our
Booking.com and agoda.com businesses, as well as international ADR growth on a constant currency basis and growth in rental car day reservations for our
rentalcars.com business. The U.S. Dollar significantly strengthened against the Euro during 2015, moving from an exchange rate of 1.21 U.S. Dollars per Euro as
of January 1, 2015 to 1.09 U.S. Dollars per Euro as of December 31, 2015. The U.S. Dollar has also strengthened against many other currencies since January 1,
2015. We therefore believe that unit growth rates and total gross bookings, international gross bookings and gross profit growth on a constant currency basis,
excluding the impact of foreign exchange rate fluctuations, are important measures to understand the fundamental performance of the business.
U.S. gross bookings decreased by 1.6% for the year ended December 31, 2015 , compared to the year ended December 31, 2014 , primarily due to
declines in gross bookings by priceline.com's retail airline ticket service (due to lower airfares), Name Your Own Price ® reservation services and vacation package
reservation service, partially offset by increases in gross bookings by priceline.com's retail hotel and rental car reservation services and priceline.com's Express
Deals ® hotel reservation service. Travel service providers typically provide a limited amount of availability to opaque services like those of priceline.com,
especially during periods of healthy travel demand. As a result, the recent healthy travel environment (which has had an adverse impact on our access to opaque
availability) and the increased use by consumers of discounted closed user group prices for hotel rooms have negatively affected our opaque reservation services.
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