Expedia 2014 Annual Report Download - page 12

In addition, we have developed proprietary, supplier-oriented technology that streamlines the interaction
between some of our websites and hotel central reservation systems, making it easier and more cost-effective for
hotels to manage reservations made through our brands. Through this “direct connect” technology, hotels can
upload information about available products and services and rates directly from their central reservation systems
into our websites, as well as automatically confirm hotel reservations made by our travelers. In the absence of
direct connect technology, both of these processes are generally completed via a proprietary extranet.
Distribution Partners. GDSs, also referred to as computer reservation services, provide a centralized,
comprehensive repository of travel suppliers’ ‘content’ — such as availability and pricing of seats on various
airline point-to-point flights, or ‘segments.’ The GDSs act as intermediaries between the travel suppliers and
travel agencies, allowing agents to reserve and book flights, rooms or other travel products. Our relationships
with GDSs primarily relate to our air business. We use Sabre, Amadeus and Travelport as our GDS segment
providers in order to ensure the widest possible supply of content for our travelers.
Marketing and Promotions
Our marketing programs are intended to build and maintain the value of our various brands, drive traffic and
ultimately bookings through our various brands and businesses, optimize ongoing traveler acquisition costs and
strategically position our brands in relation to one another. Our long-term success and profitability depends on
our continued ability to maintain and increase the overall number of traveler transactions flowing through our
brand and shared global platforms in a cost-effective manner, as well as our ability to attract repeat customers to
our sites.
Our marketing channels primarily include online advertising including search engine marketing and
optimization as well as meta-search, social media sites, offline advertising, loyalty programs and direct and/or
personalized traveler communications on our websites as well as through direct e-mail communication with our
travelers. Our marketing programs and initiatives include promotional offers such as coupons as well as seasonal
or periodic special offers from our travel suppliers based on our supplier relationships. Our traveler loyalty
programs include Welcome Rewards on Hotels.com global websites and Expedia®+ rewards on Expedia.com
and Expedia.ca. The cost of these two loyalty programs is recorded as a reduction of revenue in our financial
statements.
We also make use of affiliate marketing. The Expedia.com and Hotels.com-branded websites receive
bookings from consumers who have clicked-through to the respective websites through links posted on affiliate
partner websites. Affiliate partners can also make travel products and services available on their own websites
through a Brand Expedia or Hotels.com co-branded offering or a private label website. Our EAN business
provides our affiliates with technology and access to a wide on range of products and services. We manage
agreements with thousands of third-party affiliate partners, including a number of leading travel companies,
pursuant to which we pay a commission for bookings originated from their websites.
Operations and Technology
We provide 24-hour-a-day, seven-day-a-week traveler sales and support by telephone or via e-mail. For
purposes of operational flexibility, we use a combination of outsourced and in-house call centers. Our call centers
are located throughout the world, including outsourced operations in the Philippines, El Salvador, Egypt and
India. We invested significantly in our call center technologies, with the goal of improving customer experience
and increasing the efficiency of our call center agents, and have plans to continue reaping the benefits of these
investments going forward.
Our systems infrastructure and web and database servers are housed in various locations, mainly in the
United States, which have 24-hour monitoring and engineering support. These data centers have their own
generators and multiple back-up systems. Significant amounts of our owned computer hardware for operating the
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