Expedia 2005 Annual Report Download - page 13

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extranet. Our travelers can book reservations with over 25,000 worldwide merchant hotel properties, of
which over 30% are now fully direct-connected. We expect that this number will increase in the future.
We are also adding a significant upgrade to our data aggregation and mining capabilities across
Expedia with the installation of an enterprise data warehouse, which will allow enhanced personalization
on both our websites and e-mail communications with our travelers. This investment will also yield phased
benefits, with the full project scheduled for completion in 2008.
Expand our International and Corporate Travel Businesses. We currently operate Expedia-branded
sites in the U.S., Canada, U.K., Germany, France, Italy, the Netherlands and Australia. Through our
controlling ownership in eLong, we maintain a point of sale for Chinese travelers, and through Hotels.com,
Hotwire.com and TripAdvisor brands we maintain additional points of presence beyond the U.S. In 2005,
our international gross bookings accounted for approximately 22% of worldwide gross bookings.
We intend to continue investing in and growing our existing international points of sale. In addition,
we anticipate launching point of sales in additional countries in the future where we find large travel
markets and rapid growth of online commerce. As an example, we plan to enter the Japanese travel sector
by the end of 2006. Future launches may occur under our flagship Expedia brand or our other brands, or
through acquisition of third party brands, as in the case of eLong.
ECT currently conducts operations in the U.S., Canada, U.K., France, Belgium, the Netherlands and
Luxembourg. We believe the corporate travel sector represents a large opportunity for Expedia, and we
believe we offer a compelling technology solution to small and medium-sized businesses seeking to control
travel costs and improve their employees' travel experiences. Expanding our corporate travel business also
increases our appeal to travel product and service suppliers, as the average corporate traveler has a higher
incidence of first class and international travel than the average leisure traveler.
We intend to continue investing in and expanding the geographic footprint of our ECT business. ECT
currently accounts for less than 5% of our worldwide gross bookings, but we anticipate growth over the
next few years.
Expand our Product and Service Offerings Worldwide. In general, our Expedia.com site has offered
the most comprehensive array of innovation and selection of travel products and services to travelers. We
plan to continue improving and growing these offerings at Expedia.com, as well as expand them to our
worldwide points of sale.
The majority of our revenue comes from transactions involving the sale of airline tickets and the
booking of hotel reservations, either as stand-alone products or as part of package transactions. We are
working to grow our package business as it results in higher revenue per transaction, and we also seek to
continue diversifying our revenue mix beyond core air and hotel products to car rental, destination services,
cruise and other offerings.
Leverage our Scale in Technology and Operations. The travel brands comprising Expedia, Inc. have
invested over $3 billion dollars in technology, operations, brand building, supplier integration and
relationships and other areas since the launch of Expedia.com in 1996.
It is our intention to continue leveraging this substantial investment by launching new countries,
introducing site features, adding supplier products and services or adding value-added content for travelers.
We have been able to launch the Italy and Australia websites relatively quickly and inexpensively by
leveraging Expedia's existing technology and product supply.
Our scale of operations also enhances the value of technology innovations we introduce on behalf of
our travelers and suppliers. As an example, our traveler review feature Ì whereby Expedia travelers have
created over 100,000 qualified reviews of hotel properties Ì is able to accumulate a larger base of reviews
due to the higher base of online traffic that frequents our various sites.
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