Our Distribution like-for-like revenue increased by 5.2% driven by growth in both our revenue lines: booking revenue 1. increased by 4.7% and non booking revenue rose by 7.7%:
The contribution of our Distribution business is calculated after deducting from our revenue those operating costs which can be directly allocated to the business (variable costs, mainly related to distribution fees and incentives, and those product development, marketing and commercial costs which are directly attributable to each business).
The contribution of our Distribution business reached €950.4 million in 2011, up 2.6% vs. 2010. As a percentage of revenue, this represents a margin of 45.7%, slightly lower than the 46.5% contribution margin in 2010.
Our total operating costs in 2011 grew by 6.3%. This increase was principally driven by (i) R&D expenditure in new products and applications for travel agencies, airlines and corporations, regionalisation efforts to address the specific needs of US and Asia clients, investment in hotel and rail distribution and the Topas distribution agreement, (ii) an increase in incentive payments to travel agencies, as a result of the competitive situation and the mix of travel agencies originating our bookings and (iii) higher commercial expenses mainly related to the full year impact of certain commercial initiatives undertaken during the course of 2010. The above were partially offset by certain cost control efforts as well as a favourable impact of the USD depreciation in our cost base.