Expedia 2008 Annual Report Download - page 3

To our stockholders:
Despite the economic environment we all must cope with these days, Expedia is engaged in more forward
looking initiatives than ever. The test for us will be not in maximizing profitability at the cost of improving
our services, but instead in the ground we gain competitively over the next years, both in extending our
leadership and making true gains in the customer experience. Our ability to further improve that experience in
every way possible will be what differentiates us from others and is the key mission of the Company.
Here is what we are doing:
In late 2008 Expedia announced a new global structure that aligns our operations around each of our
brands: principally Expedia»,hotels.com», Hotwire», TripAdvisor»and Egencia
TM
. This simplified struc-
ture empowers our teams to react more quickly to the evolving competitive landscape, and better
leverages our collective resources.
Our new brand alignment also enables us to increase our focus on as many as 60 million travelers who
visit our sites monthly. We have lowered or reduced consumer fees across many of our businesses as we
continue to reduce barriers to purchase. 2008 marked the first full year without change or cancellation fees on
hotels.com and no consumer booking fees for air on Hotwire. Our most recent promotion includes an offer
for a free hotel night and the elimination of air booking fees on Expedia.com»through May 31
st
.
These efforts are intended to get more of our visitors to purchase from us, and then return to us confident
in the knowledge that there simply is no better place to buy travel.
Our brands continue to invest in features and functionality that set them apart from the competition.
TripAdvisor unveiled its air meta-search product including the Fees Estimator, the first tool of its kind to help
consumers estimate the complete cost of air travel in this developing era of unbundled air pricing. Our
managed travel business, Egencia, continues to invest in technologies like mobile and collaboration capabili-
ties for the benefit of business travelers, while building state of the art reporting and other capabilities to help
companies optimize their travel spend.
To provide the clear best in customer experience is our goal. We’re pleased by Hotwire winning JD
Power’s award for Highest Customer Satisfaction for the 3rd year in a row, and Expedia.com again topping
the annual ACSI customer satisfaction survey for major OTAs for the 7
th
year in a row. We can do much
more, but we are making excellent progress.
Our leadership in travel is driven in part by superior supply. Our travel supply partners know that we
can deliver the highest incremental demand. This is best evidenced by results — despite a decline in overall
travel demand, Expedia achieved 13% room night growth in 2008, and we now fill over 10% of room demand
each night in major destinations such as Las Vegas and New York.
Our global team of market managers are on the ground in local markets, working diligently to help hotels
best position their offers and maximize the value they get from the global Expedia marketplace. Suppliers
further benefit from our evolving portfolio of scaleable revenue management, payment, and connectivity tools.
The acquisition of Venere
TM
, a leading European agency model hotel business, and the integration in 2009
of Venere’s hotel inventory across our sites stands to add a further dimension to the way Expedia addresses
the needs of properties of all sizes and geographies.
International expansion continues to represent one of Expedia’s best long term growth opportunities.
International revenue topped $1 billion in 2008, accounting for 35% of our total revenue compared to less than
25% just three years ago. Expedia now offers travelers their choice of over 100,000 global properties, and in
2008 we grew our international footprint with the launch of Expedia.co.in in India, multiple localized
hotels.com sites including those in Hong Kong, Japan and Korea, and most recently extending Egencia
corporate travel services to customers in India and Switzerland.
In addition to continually improving our transaction marketplace, we provide travel and non-travel
advertisers with unparalleled reach to in-market travel shoppers. Expedia Media Solutions is hard at work
monetizing the traffic to our transactional sites, expanding adoption of new products like TravelAds and other
fresh and innovative offerings for advertisers, while TripAdvisor continues to add content, such as vacation