Expedia 2014 Annual Report Download - page 54

Download and view the complete annual report

Please find page 54 of the 2014 Expedia annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 137

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137

Global Expansion. Our Expedia, Hotels.com, Egencia, EAN, and Hotwire brands operate both domestically
and through international points of sale, including in Europe, Asia Pacific, Canada and Latin America. We own a
majority share of eLong, a leading online travel company in China. We also own Venere, a European brand,
which focuses on marketing hotel rooms in Southern Europe. Egencia, our corporate travel business, operates in
more than 60 countries around the world and continues to expand, including its 2012 acquisition of VIA Travel.
We also partner in a 50/50 joint venture with AirAsia — a low cost carrier serving the Asia-Pacific region — to
jointly grow an online travel agency business. Although the results for the joint venture are not consolidated in
our financial statements, we consider this business to be a key part of our Asia Pacific strategy. In 2014,
approximately 41% of our worldwide gross bookings and 47% of worldwide revenue were through international
points of sale compared to just 22% for both worldwide gross bookings and revenue in 2005. We have a goal of
generating at least 65% of our revenue through businesses and points of sale outside of the United States.
During March 2013, we completed our majority acquisition of trivago, a leading hotel metasearch company.
Officially launched in 2005, trivago is one of the best known travel brands in Europe. trivago continues to
operate independently, and plans to rapidly grow revenue through global expansion, including aggressive
expansion in the United States and Canada, among other countries.
During July 2014, we completed the acquisition of Auto Escape Group, one of Europe’s leading online car
rental reservation companies. Auto Escape Group has joined with the CarRentals.com brand, allowing it to
expand internationally to provide our customers more choices across the globe and help our supply partners
expand their marketing reach.
During November 2014, we completed the acquisition of Wotif Group, an Australian online travel company.
Wotif Group adds to our collection of travel’s most trusted brands and enhances our supply in the Asia-Pacific
region, while allowing Expedia to expose the Wotif Group to our world-class technology and its customers to our
extensive global supply.
During January 2015, we acquired the Travelocity brand and other associated assets from Sabre. As a result
of the acquisition, the strategic marketing agreement previously entered into during 2013, which joined
Travelocity’s strong brand with our best-in-class booking platform, supply base, and customer service, was
terminated. Evolving this relationship strengthens Expedia, Inc.’s ability to continue to innovate and deliver the
best travel experiences to the widest set of travelers, all over the world.
In expanding our global reach, we leverage significant investments in technology, operations, brand
building, supplier relationships and other initiatives that we have made since the launch of Expedia.com in 1996.
Our scale of operations enhances the value of technology innovations we introduce on behalf of our travelers and
suppliers. We believe that our size and scale afford the company the ability to negotiate competitive rates with
our supply partners, provide breadth of choice and travel deals to our traveling customers through an expanding
supply portfolio and create opportunities for new value added offers for our customers such as our loyalty
programs. The size of Expedia’s worldwide traveler base makes our sites an increasingly appealing channel for
travel suppliers to reach customers. In addition, the sheer size of our user base and search query volume allows
us to test new technologies very quickly in order to determine which innovations are most likely to improve the
travel research and booking process, and then roll those features out to our worldwide audience in order to drive
improvements to conversion.
New Channel Penetration. Today, the majority of online travel bookings are generated through typical
desktop and laptop computers. However, technological innovations and developments are creating new
opportunities including travel bookings made through mobile devices. In the past few years, each of our brands
made significant progress creating new mobile websites and mobile/tablet applications that are receiving strong
reviews and solid download trends. We believe mobile bookings via smartphones present an opportunity for
incremental growth as they are often completed within one or two days of the travel or stay, which is a much
shorter booking window than we have historically experienced via more traditional online booking methods.
50