REVENUE

9 Months Ended

Sep. 30, 2021

Revenue from Contract with Customer [Abstract]

REVENUE

REVENUE

Disaggregation of Revenue

Geographic Information

The Company's international revenue 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 results of the Company's international businesses. The Company's geographic information is as follows (in millions):

			International
	United States		The Netherlands		Other		Total
Total revenues for the three months ended September 30,
2021	$	444	$	3,955	$	277	$	4,676
2020	$	214	$	2,231	$	195	$	2,640
Total revenues for the nine months ended September 30,
2021	$	1,034	$	6,367	$	576	$	7,977
2020	$	604	$	4,352	$	602	$	5,558

Revenue by Type of Service

Approximately 89% and 87% of the Company's revenue for the three and nine months ended September 30, 2021, respectively, and 91% and 88% of the Company's revenue for the three and nine months ended September 30, 2020, respectively, relates to online accommodation reservation services. Revenue from all other sources of online travel reservation services and advertising and other revenues each individually represent less than 10% of the Company's total revenues for each period.

Deferred Merchant Bookings and Deferred Revenue

Cash payments received from travelers in advance of the Company completing its performance 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. At September 30, 2021 and December 31, 2020, deferred merchant bookings included deferred revenue for online travel reservation services of $163 million and $50 million, respectively. The amounts are subject to refunds for cancellations. The Company expects to complete its performance obligations generally within one year from the reservation date. During the nine months ended September 30, 2021, the Company recognized revenues of $34 million from the deferred revenue balance as of December 31, 2020. The increase in the deferred revenue balance for the nine months ended September 30, 2021 is principally driven by payments received from travelers, net of amounts estimated to be payable to travel service providers, for online travel reservations in the current period.

Loyalty and Other Incentive Programs

The Company provides loyalty programs, such as OpenTable's loyalty program, where participating consumers are awarded loyalty points on current transactions that can be redeemed in the future. At September 30, 2021 and December 31, 2020, liabilities for loyalty program incentives of $13 million and $21 million, respectively, were included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets. 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 addition to the loyalty programs, at September 30, 2021 and December 31, 2020, liabilities of $61 million and $60 million, respectively, for other incentive programs, such as referral bonuses, rebates, credits and discounts, including for Booking.com's back-to-travel campaigns, were included in "Accrued expenses and other current liabilities" in the Consolidated Balance Sheets.

Refunds to Travelers

Due to the high level of cancellations of existing reservations as a result of the COVID-19 pandemic (see Note 1), in 2020, the Company incurred higher than normal cash outlays to refund travelers for prepaid reservations, including certain situations where the Company had 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 had 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.