Expedia 2015 Annual Report Download - page 17

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• corporate travel management service providers,
• mobile platform travel applications,
• social media websites,
• eCommerce websites and group buying websites;
• Alternative accommodation websites.
Online and traditional travel agencies: We face increasing competition from other online travel agencies
(“OTAs”) in many regions, such as The Priceline Group and its subsidiaries Booking.com and Agoda.com, as
well as regional competitors such as Ctrip, which in some cases may have more favorable offerings for travelers
or suppliers, including pricing and supply breadth. We also compete with traditional travel agencies (operating
both offline and online), wholesalers and tour operators for both travelers and the acquisition and retention of
supply.
Travel suppliers: Some of our competitors, including travel suppliers such as airlines and hotels, may offer
products and services on more favorable terms to consumers who transact directly with them, including lower
prices, no fees or unique access to proprietary loyalty programs, such as points and miles. Many of these
competitors, such as airlines, hotel and rental car companies, have been steadily focusing on increasing online
demand on their own websites and mobile applications in lieu of third-party distributors such as the various
Expedia sites. For instance, some low cost airlines, which are having increasing success in the marketplace,
distribute their online supply exclusively through their own websites and several large hotel chains have
combined to establish a single online hotels search platform with links directly to their own websites and mobile
applications. Suppliers who sell on their own websites, in some instances, offer advantages such as favorable
rates, increased or exclusive product availability, complimentary Wi-Fi, and their own bonus miles or loyalty
points, or in the case of airlines promote hotel supply at their websites, which could make their offerings more
attractive to consumers than ours.
Search engines: We also face increasing competition from search engines including Google. To the extent
that these leading search engines that have a significant presence in our key markets disintermediate online travel
agencies or travel content providers by offering comprehensive travel planning, shopping or booking capabilities,
or increasingly refer those leads directly to suppliers or other favored partners, increase the cost of traffic directed
to our websites, or offer the ability to transact on their own website, there could be a material adverse impact on
our business and financial performance. For example, in recent years search engines have increased their focus
on acquiring or launching flight and hotel search products that provide increasingly comprehensive travel
planning content and direct booking capabilities, comparable to OTAs. To the extent these actions have a
negative effect on our search traffic or the cost of acquiring such traffic, our business and financial performance
could be adversely affected.
In addition, our websites, or websites in which we hold a significant ownership position, including trivago-
branded websites, compete for advertising revenue with these search engines, as well as with large internet portal
sites that offer advertising opportunities for travel-related companies. Several of these competitors have
significantly greater financial, technical, marketing and other resources and large client bases than us. We expect
to face additional competition as other established and emerging companies enter the online advertising market.
Competition could result in higher traffic acquisitions costs, reduced margins on our advertising services, loss of
market share, reduced customer traffic to our websites and reduced advertising by travel companies on our
websites.
Travel metasearch engines: Travel metasearch websites, including Kayak.com (a subsidiary of Priceline),
trivago (a majority-owned subsidiary of Expedia), TripAdvisor, and Qunar (a subsidiary of Ctrip), aggregate
travel search results for a specific itinerary across supplier, travel agent and other websites. In addition, some
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