Gross bookings increased 10% (9% excluding the estimated impact from year on year changes in foreign exchange rates) for the first quarter of 2011 compared with the first quarter of 2010, driven primarily by a 13% increase in average airfares, 8% growth in transactions and a 3% increase in hotel average daily rates. Domestic bookings increased 4% and international bookings increased 20% (19% excluding foreign exchange). International bookings totaled $2.9 billion, accounting for 39% of worldwide bookings.
Hotel Gross Booking Growth for Revenue increased 15% (13% excluding foreign exchange) for the first quarter, primarily driven by an increase in hotel revenue and advertising and media revenue. Domestic revenue increased 6% while international revenue increased 31% (25% excluding foreign exchange). International revenue equaled $327 million, representing 40% of worldwide revenue.
Revenue as a percentage of gross bookings (-revenue margin?) was 11.3% for the first quarter, an increase of 45 basis points compared to the first quarter of 2010. The primary drivers include a shift to higher margin products and growth in advertising and media revenue, partially offset by rising average air ticket prices.
As a percentage of total worldwide revenue in the first quarter of 2011, hotel accounted for 59%, advertising and media accounted for 15%, air accounted for 13% and all other revenue accounted for the remaining 13%. Merchant transactions accounted for 43% of total gross bookings and 63% of revenue in the first quarter, relatively consistent with the prior year period.
Worldwide hotel revenue increased 16% for the first quarter driven by a 15% increase in room nights stayed. Revenue per room night increased 1%.
Worldwide air revenue increased 6% for the first quarter, primarily due to an 18% increase in revenue per ticket, partially offset by a decline in ticket volume of 10%. The increase in revenue per ticket was primarily due to increasing average air ticket prices, acceleration of merchant air revenue and performance-based incentives. The decrease in ticket volume was partially due to a 13% increase in average air ticket prices and lack of American Airlines content for the duration of first quarter 2011. Expedia and Hotwire® sites worldwide added back American Airlines content on April 4, 2011 pursuant to a memorandum of understanding reached with American Airlines.
Advertising and media revenue increased 23% for the first quarter, driven by a 32% increase in third-party revenue for TripAdvisor. TripAdvisor experienced robust growth in its three main revenue categories during first quarter 2011 including cost per click (CPC) based revenue, display advertising revenue and triple digit growth in other revenue, generally comprised of subscription-based products.
All other revenue (primarily car rentals, destination services and insurance) increased 7% for the first quarter.