Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from Anthony Noto - Goldman Sachs. Your question please.
Jen Watson – Goldman Sachs
This is actually Jen Watson in for Anthony. Can you elaborate a little bit on the trends you’re seeing domestically across different products – hotel as well as airline? Obviously the 23% year over year growth in airline tickets and the accelerations in gross bookings would suggest you guys are gaining share. But if you could just talk about that a little bit more that would be great.
Bob Mylod
Sure. I think that the gain in retail airline tickets speaks for itself. We also showed a 15% increase in merchant gross bookings, which we think shows nice momentum in those products. The only other comparables we have out there in terms of gaining shares is Expedia, which it looks like they also had a good quarter domestically; our airline ticket business grew a little bit faster but you have to keep in mind that we’re very, very much smaller than they. But we certainly don’t think that we lost share in these products.
Jen Watson – Goldman Sachs
Have you guys done a lot of marketing around the no fee or is it kind of a word of mouth? And are you seeing people come to the site for retail and booking merchants?
Bob Mylod
Well we had some marketing around no fee back in the summer when we launched it as a promotion but we haven’t done any real offline marketing or specific online marketing since then. We certainly have the no fee feature prominently displayed on the website and I think that helps our conversion. We also have historically seen people come in and shop for retail airline tickets and either move on to other things like a merchant product or a package but we also encourage people who buy retail airline tickets to also buy a rental car, for example. So all of those are things that we continue to try to do now that the sales are moving up here a little bit.
Jen Watson – Goldman Sachs
Great, thank you.
Operator
Thank you. Our next question comes from Chris Gutek - Morgan Stanley. Your question.
Chris Gutek – Morgan Stanley
Hi guys, nice quarter. Just to talk a little bit on the booking fee situation, it seems to be a bit of a reversal from your comments on your second quarter call where you seemed to suggest that the elimination of that high margin revenue stream was not a particularly good tradeoff versus a modest boost to volume, but now you’ve obviously taken a different view, permanently eliminating. Could you elaborate behind the strategy there?
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