XML 21 R10.htm IDEA: XBRL DOCUMENT v3.20.2
REVENUE (Notes)
 9 Months Ended
Sep. 30, 2020
Revenue from Contract with Customer [Abstract]  
REVENUE REVENUE
Disaggregation of revenue

Geographic Information

The Company's international information consists of the results of Booking.com, agoda and Rentalcars.com in their entirety and the results of the international businesses of KAYAK and OpenTable. This classification is independent of where the consumer resides, where the consumer is physically located while using the Company's services or the location of the travel service provider or restaurant. For example, a reservation made through Booking.com (which is domiciled in the Netherlands) at a hotel in New York by a consumer in the United States is part of the Company's international results. The Company's geographic information is as follows (in millions):
International
United StatesThe NetherlandsOtherTotal
Total revenues for the three months ended September 30,
2020$214 $2,231 $195 $2,640 
2019 (1)
404 4,107 529 5,040 
Total revenues for the nine months ended September 30,
2020$604 $4,352 $602 $5,558 
2019 (1)
1,170 9,176 1,381 11,727 
(1) Geographic information for the three and nine months ended September 30, 2019 has been recast to conform to the current period presentation.
Revenue by Type of Service

Approximately 91% and 88% of the Company's revenue for the three and nine months ended September 30, 2020, respectively, and 88% and 87% of the Company's revenue for the three and nine months ended September 30, 2019, respectively, relates to online accommodation reservation services. Revenue from all other sources of online travel reservation services and advertising and other revenues each represent less than 10% of the Company's total revenues.

Deferred Revenue

Cash payments received from travelers in advance of the Company completing its service obligations are included in "Deferred merchant bookings" in the Company's Consolidated Balance Sheets and are comprised principally of amounts estimated to be payable to the travel service providers as well as the Company's estimated deferred revenue for its commission or margin and fees. The Company expects to complete its service obligation within one year from the reservation date. The amounts are subject to refunds for cancellations.

The following table summarizes the activity of deferred revenue for online travel reservation services for the nine months ended September 30, 2020 (in millions):
Balance, December 31, 2019$220 
Revenues recognized from the beginning deferred revenue balance(153)
Cancellations and amendments(65)
Payments received from travelers, net of amounts estimated to be payable to travel service providers, and other73 
Balance, September 30, 2020$75 

Loyalty and Other Incentive Programs

The Company provides loyalty programs where participating consumers are awarded loyalty points on current transactions that can be redeemed in the future. At September 30, 2020 and December 31, 2019, liabilities for loyalty program incentives of $28 million and $80 million, respectively, were included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets. The Company’s largest loyalty program is at OpenTable, where points can be redeemed for rewards such as qualifying reservations at participating restaurants, third-party gift cards and accommodation reservations
booked through some of the Company’s other platforms. The estimated fair value of the loyalty points that are expected to be redeemed is recognized as a reduction of revenue at the time the incentives are granted. In March 2018, OpenTable introduced a three-year time-based expiration for loyalty points earned by diners. Unredeemed loyalty points existing as of the date of introduction of the expiration provision will expire during the three months ending March 31, 2021. Unredeemed loyalty points earned after the date of introduction of the expiration provision expire three years after they were earned. During the three months ended September 30, 2020, the Company recorded a decrease of $28 million to the liability, primarily due to
changes in estimates of the number of loyalty points expected to be redeemed prior to expiration, with a corresponding increase to revenue.

In addition to the loyalty programs, at September 30, 2020 and December 31, 2019, liabilities of $122 million and $22 million, respectively, for other incentive programs, such as referral bonuses, rebates, credits and discounts, were included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets. During the three months ended September 30, 2020, the Company offered additional rebates to customers meeting certain eligibility requirements under an incentive program at Booking.com that will end in 2020. The eligibility requirements include the customer's enrollment in Booking.com's Genius Program (program features include special discounts offered by customers to frequent travelers) and Preferred Partner Program (program features include greater visibility for customers in search results for payment of higher commission) and timely payment of invoices. The additional rebates resulted in a reduction of revenue of $96 million during the three and nine months ended September 30, 2020 and an increase of $88 million in the liability as of September 30, 2020.

Impact of COVID-19
Due to the high level of cancellations of existing reservations as a result of the COVID-19 pandemic (see Note 1), the Company has incurred, and may continue to incur, higher than normal cash outlays to refund travelers for prepaid reservations, including certain situations where the Company has already transferred the prepayment to the travel service provider. For the nine months ended September 30, 2020, the Company recorded a reduction in revenue of $42 million for refunds paid or estimated to be payable to travelers where the Company has agreed to provide free cancellation for certain non-refundable reservations without a corresponding estimated expected recovery from the travel service providers. For the three months ended September 30, 2020, the Company recorded an increase in revenue of $21 million due to recoveries from travel service providers and lower estimated payments to travelers.