Priceline 2015 Annual Report Download - page 9

supporting its meta-search service with offline advertising, and trivago, a leading meta-search service in Europe, has been aggressively advertising in the United
States since 2013. Through our KAYAK meta-search service, we compete directly with other meta-search services. KAYAK depends on access to information
related to travel service pricing, schedules, availability and other related information from OTCs and travel service providers. To the extent OTCs or travel service
providers do not provide such information to KAYAK, KAYAK's business and results of operations could be harmed.
Consumers may favor travel services offered by meta-search websites or search companies over OTCs, which could reduce traffic to our travel
reservation websites, increase consumer awareness of our competitors' brands and websites and increase our advertising and other customer acquisition costs. To
the extent any such consumer behavior leads to growth in our KAYAK meta-search business, such growth may not result in sufficient increases in profits from our
KAYAK meta-search business to offset any related decrease in profits experienced by our travel service reservation brands. Further, meta-search services may
evolve into more traditional OTCs by offering consumers the ability to make travel reservations directly through their websites. For example, TripAdvisor
facilitates hotel reservations on its transaction websites Tingo and Jetsetter and, with respect to some accommodations, allows consumers to make a reservation
while staying on TripAdvisor through its "Instant Booking" offering. Instant Booking now includes participation from six out of the top 10 global hotel brands,
including Marriott International, Hyatt Hotels and Best Western International. We recently agreed to participate in "Instant Booking," and we do not yet know how
this participation will affect our business. For example, while we expect to benefit from incremental business generated through "Instant Booking," participation
could cannibalize business that would otherwise come to us through other ad offerings on TripAdvisor, directly (including after a consumer first visits
TripAdvisor) or through other channels, some of which may be more profitable to us than reservations generated through "Instant Booking." Other meta-search
providers may also offer direct booking services with travel service providers, which may lead to more consumers booking directly with a travel service provider
rather than an OTC. For example, Google recently announced the discontinuation of its Hotel Finder meta-search service in favor of integrating hotels directly into
search results and encouraging users to book hotel reservations directly through Google's "Book on Google" service, which it is now expanding from mobile
phones to both desktops and tablets. To the extent consumers book travel services through a service such as Google's "Book on Google," a meta-search website or
directly with a travel service provider after visiting a meta-search website or meta-search utility on a traditional search engine without using an OTC like us, or if
meta-search services limit our participation within their search results or evolve into more traditional OTCs, we may need to increase our advertising or other
customer acquisition costs to maintain or grow our reservation bookings and our business, gross bookings and results of operations could be adversely affected.
There has been a proliferation of new channels through which accommodation providers can offer reservations. For example, companies such as
HomeAway (which is owned by Expedia) and Airbnb offer services providing vacation rental property owners, particularly individuals, an online place to list their
accommodations where travelers can search and book such properties. Airbnb may also seek to compete directly with us by offering hotel and other
accommodations through their online and mobile platforms. Further, meta-search services may lower the cost for new companies to enter the market by providing
a distribution channel without the cost of promoting the new entrant's brand to drive consumers directly to its website. If any of these services are successful in
attracting consumers who would otherwise use our services, our business and results of operations would be harmed.
Our OpenTable restaurant reservation business competes or may in the future compete with other restaurant reservation providers, such as LaFourchette
(which is owned by TripAdvisor), Yelp's SeatMe service, Zomato, Bookatable (which is owned by Michelin), and Quandoo (which is owned by Recruit).
Companies offering new rental car business models and car- and ride-sharing services such as Uber, Lyft, Gett, BlaBlaCar and Zipcar (which is owned by
Avis) provide alternative options for consumers considering renting a car. These companies extensively utilize mobile platforms and new technologies to drive
demand for their services. If any of these services are successful in attracting consumers who would otherwise use priceline.com's or rentalcars.com's rental car
reservation services, our business and results of operations could be harmed.
Travel service providers, including multi-national hotel chains, rental car companies and airlines with which we conduct business, compete with us in
online channels to drive consumers to their own websites in lieu of third-party distributors such as us. Travel service providers may charge lower prices and, in
some instances, offer advantages such as loyalty points or special discounts to members of closed user groups (such as loyalty program participants or customers
with registered accounts), any of which could make their offerings more attractive to consumers than our services. Discounting may increase as competition
authorities seek to allow increased pricing flexibility among providers of travel service reservations. We may need to offer similar advantages to maintain or grow
our reservation bookings, which could adversely impact our profitability. Further, consolidation among travel service providers, such as Marriott International's
acquisition of Starwood
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