Expedia 2009 Annual Report Download - page 54

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(1) The TripAdvisor Media Network, which is comprised of media businesses that differ from our transaction-
based websites and our Egencia business, does not have associated gross bookings or revenue margin.
However, third-party revenue from the TripAdvisor Media Network is included in revenue used to calculate
total revenue margin.
The increase in worldwide gross bookings in 2009 as compared to 2008 was primarily due to an 18%
growth in transactions, substantially offset by lower prices for airline tickets and hotel room nights. The increase
in worldwide gross bookings in 2008 as compared to 2007 was primarily due to increases in transaction volumes
and travel product prices.
The decrease in revenue margin in 2009 as compared to 2008 was primarily due to the reduction in traveler
fees, the impact of our loyalty programs and a greater mix of lower margin hotels, partially offset by lower air
ticket prices and a reduction in the mix of lower margin air product. The increase in revenue margin in 2008 as
compared to 2007 was primarily due to an increased mix of advertising and media revenue.
Results of Operations
Revenue
Year ended December 31, % Change
2009 2008 2007 2009 vs 2008 2008 vs 2007
($ in millions)
Revenue by Segment
Leisure ............................ $2,635 $2,626 $2,449 0% 7%
TripAdvisor Media Network (Third-party
revenue) ......................... 212 201 125 6% 60%
Egencia ............................ 108 110 91 (1)% 20%
Total revenue ..................... $2,955 $2,937 $2,665 1% 10%
In 2009, the increase in revenue was primarily due to increases within our Leisure segment in hotel, car and
advertising and media revenue and an increase within our TripAdvisor Media Segment in advertising and media
revenue. These increases were partially offset by a decrease in air revenue.
Worldwide hotel revenue increased 2% in 2009 compared to 2008 primarily due to a 23% increase in room
nights stayed, including rooms delivered as a component of packages and room nights booked through Venere
(which we acquired in September 2008), partially offset by a 17% decline in revenue per room night. Revenue
per room night declined largely due to a 15% decrease in ADRs, including a reduction in traveler fees. Excluding
room nights stayed through Venere, room nights grew 20% for the year.
Worldwide air revenue decreased 13% in 2009 compared to 2008 due to a 24% decrease in revenue per air
ticket, partially offset by a 15% increase in ticket volumes. Expedia.com eliminated consumer booking fees on
online air tickets in March 2009, with certain other points of sale following at various dates into the third quarter
of 2009, which primarily drove the decline in revenue per ticket. This elimination of fees on Expedia.com and
other points of sale, combined with lower average ticket prices, contributed to the increase in our air ticketing
volumes.
Worldwide revenue other than hotel and air discussed above, which includes advertising and media, car
rental, destination services and agency cruise, increased by 5% in 2009 compared to 2008 primarily due to an
increase in our advertising and media revenue and car rental revenue.
In 2008, the increase in revenue was primarily due to increases in worldwide hotel revenue and advertising
and media revenue.
Worldwide hotel revenue increased 6% in 2008 compared to 2007. The increase was primarily due to a 13%
increase in room nights stayed, including rooms delivered as a component of vacation packages, partially offset
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