10-KPeriod: FY2002

Booking Holdings Inc. Annual Report, Year Ended Dec 31, 2002

Filed March 31, 2003For Securities:BKNG

Summary

Booking Holdings Inc. (formerly priceline.com) reported revenues of $1.0 billion for the year ended December 31, 2002. While the company has pioneered a unique "demand collection system" for travel and other services, the report highlights significant challenges. The airline segment, which constituted a substantial portion of revenue, was negatively impacted by post-September 11th travel declines, increased airline discounting, and reduced airline capacity. The company is actively working to diversify its revenue streams, with a particular focus on growing its hotel business, which showed a 47% increase in room nights sold in 2002. The company also launched its retail travel site, Lowestfare.com, to supplement its opaque sales model and aims to gain traction in the vacation package market. Despite these efforts, the company faces ongoing risks including intense competition, dependence on a few major airline suppliers, the impact of global events like the war in Iraq on travel demand, and the potential for increased operating expenses due to GDS fee pressures. The company's financial performance has been marked by net losses, and it continues to navigate a challenging market environment, with a significant accumulated deficit of $1.6 billion as of December 31, 2002. The company is focused on improving operating results and achieving profitability.

Key Highlights

  • 1Total revenues for the year ended December 31, 2002, were $1.0 billion.
  • 2The company experienced a 14.2% decrease in travel revenues in 2002 compared to 2001, largely due to a weak airline ticket market and reduced airline inventory.
  • 3The hotel business showed strong growth, with over 4 million room nights sold in 2002, a 47% increase from 2001.
  • 4The company launched Lowestfare.com to diversify revenue into retail travel services and offer an alternative to its "Name Your Own Price" model.
  • 5Significant risk factors include intense competition, dependence on major airline suppliers (with two major suppliers in bankruptcy), and the adverse impact of geopolitical events like the war in Iraq on travel demand.
  • 6The company reported an accumulated deficit of approximately $1.6 billion as of December 31, 2002, and a net loss of $19.2 million for the year.
  • 7The company is actively working to improve its bind rate and diversify its offerings beyond airline tickets to achieve profitability.

Frequently Asked Questions

For the fiscal year ended December 31, 2002, Booking Holdings Inc. reported total revenues of approximately $1.0 billion.

The company is facing significant challenges including a highly competitive online travel market, a heavy reliance on airline tickets (which are subject to market volatility and supplier issues), the impact of global events like the war in Iraq on travel demand, and a history of net losses and accumulated deficits. Intense competition and pressure on global distribution system (GDS) fees are also key concerns.

The company is focusing on growing its hotel business, which showed significant growth in 2002. It has also launched Lowestfare.com to offer retail travel services, diversifying away from its core "Name Your Own Price" opaque model. Additionally, efforts are underway to develop its vacation package offerings and improve its bind rate for travel services.

The outlook for the airline ticketing business is challenging. The report indicates that lower retail pricing, reduced airline capacity post-9/11, and the impact of the war in Iraq have negatively affected demand and the company's value proposition. The company is not currently forecasting a recovery in the airline industry or an improvement in its airline ticketing business during 2003.