<PAGE>   1


                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 10-Q

(Mark One)
    [x]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

                  for the Quarterly Period Ended June 30, 2001

                                       OR
    [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
          SECURITIES EXCHANGE ACT OF 1934

                 for the Transition Period from        to

                         COMMISSION FILE NUMBER: 0-29575

                        HOTEL RESERVATIONS NETWORK, INC.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                      75-2817683
(State or other jurisdiction of                       (I.R.S. Employer
incorporation or organization)                       Identification No.)

                              8140 WALNUT HILL LANE
                                    SUITE 800
                               DALLAS, TEXAS 75231
                    (Address of principal executive offices)

                                  214-361-7311
              (Registrant's telephone number, including area code)

               (Former name, former address and former fiscal year
                          if changed since last report)

                                   ----------

Indicate by check mark whether registrant (1) has filed all reports required by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days.

  Yes [x]  No [  ]

         Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of June 30, 2001.

<Table>
<Caption>

          Class
          -----
<S>                                          <C>
          Class A Common Stock               17,713,667
          Class B Common Stock               38,999,100
</Table>


<PAGE>   2


                        HOTEL RESERVATIONS NETWORK, INC.
                                    FORM 10-Q

                       FOR THE QUARTER ENDED JUNE 30, 2001

                                TABLE OF CONTENTS

<Table>
<Caption>

PART I - FINANCIAL INFORMATION

                                                                                                           Page #
                                                                                                           ------
<S>               <C>                                                                                      <C>
    Item 1.       Condensed Consolidated Financial Statements

                  Condensed Consolidated Balance Sheets as of June 30, 2001 (unaudited) and December
                  31, 2000.............................................................................       3

                  Unaudited Condensed Consolidated Statements of Income for the
                  Three and Six Months Ended June 30, 2001 and 2000....................................       4

                  Unaudited Condensed Consolidated Statement of Changes in Stockholders' Equity for
                  the Six Months Ended June 30, 2001...................................................       5

                  Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended
                  June 30, 2001 and 2000 ..............................................................       6

                  Notes to Unaudited Condensed Consolidated Financial Statements.......................       7

    Item 2.       Management's Discussion and Analysis of Financial Condition and Results of
                  Operations ..........................................................................      10

    Item 3.       Quantitative and Qualitative Disclosure About Market Risks...........................      13

PART II - OTHER INFORMATION

    Item 2.       Changes in Securities and Use of Proceeds............................................      14

    Item 4.       Submission of Matters to a Vote of Security Holders..................................      14

    Item 6.       Exhibits and Reports on Form 8-K.....................................................      15

    SIGNATURES.........................................................................................      16

    EXHIBIT INDEX......................................................................................      17
</Table>



<PAGE>   3
                         PART I - FINANCIAL INFORMATION

ITEM I.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.

                        HOTEL RESERVATIONS NETWORK, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                                                             JUNE 30,        DECEMBER 31,
                                                                                               2001              2000
                                                                                            ----------       ------------
                                   ASSETS                                                   (UNAUDITED)
<S>                                                                                         <C>              <C>
CURRENT ASSETS
     Cash and cash equivalents                                                              $ 118,668        $  51,037
     Restricted cash equivalents                                                                3,173            2,021
     Marketable securities - available for sale                                                95,642          118,413
     Accounts and notes receivable, net of allowance of $187 at June 30, 2001,
          and $0 at December 31, 2000                                                           8,203            4,499
     Prepaid hotel rooms                                                                          835            1,626
     Current portion of non-cash deferred distribution and marketing costs                     11,550            5,403
     Income tax receivable                                                                      4,079               --
     Other                                                                                      1,826            2,240
                                                                                            ---------        ---------
               Total current assets                                                           243,976          185,239

PROPERTY AND EQUIPMENT
     Computer equipment and software                                                            6,266            4,110
     Buildings and leasehold improvements                                                         802              285
     Furniture and other equipment                                                              2,257              794
                                                                                            ---------        ---------
                                                                                                9,325            5,189
     Less accumulated depreciation and amortization                                            (1,756)          (1,065)
                                                                                            ---------        ---------
                                                                                                7,569            4,124
OTHER ASSETS
     Investment in TravelNow.com                                                                   --            3,240
     Goodwill, net of amortization of $74,169 and $51,387 at June 30, 2001 and
          December 31, 2000, respectively                                                     380,004          354,904
     Non-cash deferred distribution and marketing costs, less current portion                  23,442            8,046
     Deferred tax asset                                                                            --            6,715
     Other assets                                                                                  23               60
                                                                                            ---------        ---------
                                                                                            $ 655,014        $ 562,328
                                                                                            =========        =========

                    LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
     Accounts payable, trade                                                                   60,454        $  30,334
     Deferred revenue                                                                          60,950           31,221
     Income tax payable                                                                            --            7,116
     Deferred income tax payable                                                                1,078               --
     Due to USAi                                                                                3,088            2,092
     Other accrued liabilities                                                                  5,684            7,370
                                                                                            ---------        ---------
          Total current liabilities                                                           131,254           78,133

COMMITMENTS AND CONTINGENCIES                                                                      --               --

STOCKHOLDERS' EQUITY
     Preferred stock, $0.01 par value; 20,000,000 shares authorized, none outstanding              --               --
     Class A common stock, $.01 par value; 600,000,000 shares authorized,
          17,713,667 and 16,234,900 shares outstanding at June 30, 2001, and
          December 31, 2000, respectively                                                         178              163
     Class B common stock, $.01 par value; 150,000,000 shares authorized,
          38,999,100 shares outstanding at June 30, 2001 and December 31, 2000                    390              390
     Additional paid-in capital                                                               501,765          468,611
     Retained earnings                                                                         21,450           14,954
     Accumulated other comprehensive income (loss)                                                (23)              77
                                                                                            ---------        ---------
          Total stockholders' equity                                                          523,760          484,195
                                                                                            ---------        ---------
                                                                                            $ 655,014        $ 562,328
                                                                                            =========        =========
</Table>


        The accompanying notes are an integral part of these statements.



                                       3
<PAGE>   4



                        HOTEL RESERVATIONS NETWORK, INC.
              UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    (In thousands, except per share amounts)

<Table>
<Caption>

                                                                         THREE MONTHS                 SIX MONTHS
                                                                        ENDED JUNE 30,               ENDED JUNE 30,
                                                                   -----------------------       -----------------------
                                                                     2001           2000           2001           2000
                                                                   --------       --------       --------       --------
<S>                                                                <C>            <C>            <C>            <C>
Net revenues                                                       $138,302       $ 78,082       $243,588       $133,345
Cost of revenues                                                     95,349         54,050        169,063         92,553
                                                                   --------       --------       --------       --------
Gross profit                                                         42,953         24,032         74,525         40,792

Operating costs and expenses
     Selling, general and administrative                             22,354         11,285         38,400         20,041
     Non-cash distribution and marketing                              4,733          1,271          8,664          1,721
     Amortization of goodwill                                        11,783         10,591         22,783         17,280
                                                                   --------       --------       --------       --------
Total operating costs and expenses                                   38,870         23,174         69,847         39,042
                                                                   --------       --------       --------       --------

Income From Operations                                                4,083            885          4,678          1,750

Interest and other income, net                                        2,291          1,961          4,948          2,990
                                                                   --------       --------       --------       --------
Income before income tax expense                                      6,374          2,846          9,626          4,740

Income tax expense                                                    1,724          1,096          3,130          1,825
                                                                   --------       --------       --------       --------
Net income                                                         $  4,650       $  1,750       $  6,496       $  2,915
                                                                   ========       ========       ========       ========
Basic earnings per common share                                    $   0.08       $   0.03       $   0.12       $   0.06
                                                                   ========       ========       ========       ========
Diluted earnings per common share                                  $   0.08       $   0.03       $   0.11       $   0.06
                                                                   ========       ========       ========       ========
Weighted average number of shares used to compute basic
earnings per common share                                            56,385         55,209         55,895         50,310
                                                                   ========       ========       ========       ========
Weighted average number of shares used to compute diluted
earnings per common share                                            57,418         55,882         57,006         50,746
                                                                   ========       ========       ========       ========
</Table>


        The accompanying notes are an integral part of these statements.



                                       4
<PAGE>   5
                        HOTEL RESERVATIONS NETWORK, INC.
       UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                                                   ACCUMULATED
                                                                        CLASS B     ADDITIONAL        OTHER
                                                           CLASS A      COMMON       PAID-IN      COMPREHENSIVE    RETAINED
                                              TOTAL     COMMON STOCK    STOCK        CAPITAL      INCOME (LOSS)    EARNINGS
                                            ---------   ------------   ---------    ----------    -------------    ---------
<S>                                         <C>         <C>            <C>          <C>           <C>              <C>
Balance at January 1, 2001                  $ 484,195     $     163    $     390    $ 468,611     $      77        $  14,954

Comprehensive income:
   Net income for the three months
       ended March 31, 2001                     1,846            --           --           --            --            1,846
   Other comprehensive loss                       (36)           --           --           --           (36)              --
                                            ---------
   Comprehensive income                         1,810
                                            ---------

   Net income for the three months
       ended June 30, 2001                      4,650            --           --           --            --            4,650
   Other comprehensive loss                       (64)           --           --           --           (64)              --
                                            ---------
   Comprehensive income                         4,586
                                            ---------

Issuance of stock warrants to
   internet affiliates                         30,208            --           --       30,208            --               --

Issuance of common stock upon
   exercise of options                          2,078             1           --        2,077            --               --

Issuance of common stock upon
   exercise of warrants                            --            14           --          (14)           --               --

Income tax benefit related to stock
   options exercised                              883            --           --          883            --               --
                                            ---------     ---------    ---------    ---------     ---------        ---------
Balance at June 30, 2001                    $ 523,760     $     178    $     390    $ 501,765     $     (23)       $  21,450
                                            =========     =========    =========    =========     =========        =========
</Table>


        The accompanying notes are an integral part of these statements.



                                       5
<PAGE>   6



                        HOTEL RESERVATIONS NETWORK, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)


<Table>
<Caption>

                                                                                      SIX MONTHS
                                                                                     ENDED JUNE 30,
                                                                              --------------------------
                                                                                2001             2000
                                                                              ---------        ---------
<S>                                                                           <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income                                                                    $   6,496        $   2,915
Adjustment to reconcile net income to net cash provided by
    operating activities:
       Depreciation                                                                 691              345
       Amortization of goodwill                                                  22,783           17,280
       Amortization of deferred distribution and marketing costs                  8,664            1,721
       Deferred income taxes                                                      7,793           (2,595)
       Changes in operating assets and liabilities, net of acquisitions
           Restricted cash                                                       (1,152)              --
           Accounts and notes receivable                                         (2,801)              19
           Prepaid hotel rooms                                                      791              288
           Accounts payable, trade                                               29,023           12,139
           Deferred revenue                                                      29,243           22,106
           Due to USAi, net                                                         996            3,207
           Income tax payable/receivable                                        (10,312)              --
           Other accrued liabilities                                                733             (176)
           Other, net                                                               533           (1,589)
                                                                              ---------        ---------

                  NET CASH PROVIDED BY OPERATING ACTIVITIES                      93,481           55,660

CASH FLOWS FROM INVESTING ACTIVITIES:
       Payment of purchase price for acquisition of predecessor                      --           (5,000)
       Acquisitions, net of cash acquired                                          (178)              --
       Capital expenditures                                                      (2,703)            (523)
       Purchase of marketable securities                                             --          (33,335)
       Proceeds from sale of marketable securities                               22,672               --
       Acquisition of TravelNow.com, net of cash acquired                       (47,756)              --
       Other, net                                                                    37               --
                                                                              ---------        ---------

                  NET CASH USED IN INVESTING ACTIVITIES                         (27,928)         (38,858)

CASH FLOWS FROM FINANCING ACTIVITIES:
       Net proceeds from issuance of stock                                           --           90,060
       Net proceeds from exercise of stock options                                2,078
                                                                              ---------        ---------

                  NET CASH PROVIDED BY FINANCING ACTIVITIES                       2,078           90,060
                                                                              ---------        ---------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                        67,631          106,862

Cash and cash equivalents at beginning of period                                 51,037            6,257
                                                                              ---------        ---------

Cash and cash equivalents at end of period                                    $ 118,668        $ 113,119
                                                                              =========        =========

SUPPLEMENTAL CASH FLOW INFORMATION:
       Cash paid for interest                                                 $      --        $      31
       Cash paid for taxes                                                    $   5,585        $   3,000

NON-CASH FINANCING ACTIVITIES:
       Capital contribution by USAi to fund purchase price                    $      --        $  12,500
           liability
       Issuance of Warrants                                                   $  30,208        $  14,755

</TABLE>


        The accompanying notes are an integral part of these statements.


                                       6

<PAGE>   7


                        HOTEL RESERVATIONS NETWORK, INC.
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATION

         Hotel Reservations Network, Inc. ("Hotel Reservations Network" or the
"Company") is a leading provider of discount hotel rooms for resale in the
consumer market in North America, the Caribbean, Western Europe and Asia. The
Company is a majority-owned subsidiary of USA Networks, Inc. ("USAi").

         On February 25, 2000, the Company completed an initial public offering
of 6,210,000 shares of class A common stock. See Note 2 for further discussion.

BASIS OF PRESENTATION

         In the opinion of the Company, all adjustments including normal
recurring adjustments necessary for a fair presentation of such unaudited
condensed consolidated financial statements have been made. Interim results are
not necessarily indicative of results to be expected for a full year. The
interim unaudited condensed consolidated financial statements and notes thereto
are presented as permitted by the Securities and Exchange Commission and do not
contain certain information included in the Company's audited consolidated
financial statements and notes thereto. Accordingly, the accompanying unaudited
condensed consolidated financial statements and notes should be read in
conjunction with the Company's 2000 consolidated financial statements included
in the Company's Annual Report on Form 10-K.

ADVERTISING

         Advertising expense for the three-month and six-month periods ending
June 30, 2001 was $2.4 million and $4.9 million, respectively. Advertising
expense for the three-month and six-month periods ending June 30, 2000 was $1.9
million and $3.4 million, respectively. The Company capitalizes costs paid for
advertising to specific target audiences on third party Internet websites that
have resulted in hotel room bookings for which the revenue has not been
recognized as of the balance sheet date. The capitalized costs are amortized
over a period of no longer than three months, which approximates the period over
which the revenue is earned. As of June 30, 2001, capitalized advertising is
$0.39 million. Other advertising costs are expensed in the period incurred.

NEW ACCOUNTING PRONOUNCEMENT

         In June 2001, the Financial Accounting Standards Board issues
Statements of Financial Accounting Standards No. 141, Business Combinations, and
No. 142, Goodwill and Other Intangible Assets, effective for fiscal years
beginning after December 15, 2001. Under the new rules, goodwill and intangible
assets deemed to have indefinite lives will no longer be amortized but will be
subject to annual impairment tests in accordance with the statements. Other
intangible assets will continue to be amortized over their useful lives.

         The Company will apply the new rules on accounting for goodwill and
other intangible assets beginning in the first quarter of 2002. Application of
the nonamortization provisions of the statement is expected to result in an
increase in income before taxes of approximately $47.2 million per year. The
Company will perform the first of the required impairment tests of goodwill as
of January 1, 2002 and has


                                       7
<PAGE>   8


not yet determined what the effect of these tests will be on the earnings and
financial position of the Company.

NOTE 2 - INITIAL PUBLIC OFFERING OF COMMON STOCK

         On February 25, 2000, the Company completed an initial public offering
in which it sold 6,210,000 shares of class A common stock at $16.00 per share,
raising $90.0 million in proceeds, net of offering expenses. Immediately prior
to the offering the Company had 9,999,900 shares of class A common stock issued
to the sellers of the predecessor business and 38,999,100 shares of class B
common stock outstanding.

NOTE 3 - MARKETABLE SECURITIES AVAILABLE FOR SALE

         Investments in marketable securities available for sale consist of
government bonds and medium term notes with an aggregate cost of $95.7 million
and aggregate market value of $95.6 million resulting in a pre-tax unrealized
loss of $0.04 million. The cumulative unrealized loss of $0.04 million is shown
as a component of comprehensive income net of income tax benefits of $0.01
million. These investments have maturity dates generally less than one year.

NOTE 4 - NON-CASH DEFERRED DISTRIBUTION AND MARKETING COSTS

         In January 2000, HRN entered into an exclusive affiliate distribution
and marketing agreement with an affiliate and issued a performance warrant upon
the completion of the public offering, which, if fully vested, would have
permitted the affiliate to acquire 2,447,955 shares of class A common stock at
the initial public offering price of $16.00. On March 3, 2001, the Company
restructured the affiliate distribution and marketing agreement whereby the term
of the agreement was extended through July, 2005 in exchange for waiver of all
performance vesting requirements and all exercise restrictions on 60% of the
performance warrants (1,468,773 shares) originally issued to such affiliate. The
remaining 40% of the performance warrant (979,182 shares) will become vested
based upon achieving certain performance targets during the term of the
agreement. As a result of the restructured agreement, the Company deferred
additional warrant costs of $26.3 million. The Company amortized $1.5 million
and $2.0 million of such costs during the quarter and six months ended June 30,
2001, respectively. The remainder will be amortized over the amended term of the
agreement.

         The fair value of the warrants with performance features will be
measured quarterly and will be charged to expense as non-cash distribution and
marketing expense as they are earned. For the quarter and six months ended June
30, 2001, the Company recorded an expense of approximately $1.9 million and $3.9
million, respectively, related to the performance warrants earned.

         Additionally, in November 2000 and March 2001, the Company entered into
additional affiliate distribution and marketing agreements and agreed to issue
warrants based upon the affiliates achieving certain performance targets. If the
targets are met in full, the Company will be required to issue warrants to
acquire an aggregate of 3.1 million shares of class A common stock at an average
price calculated at the end of each performance measurement period. No warrants
were required to be issued under these agreement during the quarter ended June
30, 2001.

         In February 2000, the Company entered into other exclusive affiliate
distribution and marketing agreements and issued 1,428,365 warrants to purchase
class A common stock at the initial public offering price of $16.00.
Additionally, in November 2000, the Company entered into another affiliate
distribution and marketing agreement and issued 95,358 warrants to purchase
class A common stock at an exercise


                                       8
<PAGE>   9


price of $31.46. These 1,523,723 warrants are non-forfeitable, fully vested and
exercisable and are not subject to any performance targets. The Company has
deferred the cost of $17.7 million for these warrants, and is amortizing the
cost over the term of the affiliate agreements, which range from two to five
years. During the quarter and six months ended June 30, 2001, the Company
amortized $1.38 million and $2.75 million of the warrant costs, respectively.
During the quarter and six months ended June 30, 2000, the Company amortized
$1.3 million and $1.7 million, respectively.

NOTE 5 - ACQUISITION

         In December 2000, the Company agreed to acquire 1,080,000 shares for
$3.2 million ($3 per share), representing a 9.86% interest in TravelNow.com Inc.
(TravelNow), a leading Internet travel site with one of the largest travel
affiliate programs on the Web. On January 3, 2001, the Company entered into a
definitive merger agreement pursuant to which the Company agreed to acquire all
of the remaining outstanding shares of TravelNow for $4.16 per share in cash, as
well as certain other contractual payments in the transaction. The acquisition
was consummated on February 16, 2001, and TravelNow became a wholly-owned
subsidiary of the Company. The total purchase price, net of cash acquired,
including acquisition expense, was approximately $47.8 million and was accounted
for as a purchase, resulting in $47.8 million of goodwill.

         In connection with the acquisition, the following assets were acquired
and liabilities were assumed (in thousands):

<Table>


<S>                                             <C>
     Accounts receivable, net                   $  903
     Other current assets                          119
     Fixed assets                                1,408
     Accounts payable                            1,097
     Accrued expenses                              909
     Deferred revenue                              486
</Table>

NOTE 6 - COMPREHENSIVE INCOME (LOSS)

         Comprehensive income (loss) is net income (loss) plus other
comprehensive income (loss), which consists of changes in unrealized gain
(losses) on marketable securities available for sale.



                                       9
<PAGE>   10



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

GENERAL

         Our company is a leading provider of discount hotel accommodations,
allowing customers to select and book hotel rooms in major cities through our
websites and our toll-free call centers. We contract with hotels in advance for
volume purchases and guaranteed availability of hotel rooms and vacation rentals
at wholesale prices and sell these rooms to consumers, often at significant
discounts to published rates. In addition, our hotel supply relationships often
allow us to offer our customers hotel accommodation alternatives for otherwise
unavailable dates. At June 30, 2001, we had room supply agreements with over
3,300 lodging properties in 146 major markets in North America, the Caribbean,
Western Europe and Asia. Our websites feature traveler oriented interfaces which
enable travelers to make informed decisions about their hotel accommodations by
providing easy access to the description, rates and availability 24 hours a day,
7 days a week.

RESULTS OF OPERATIONS FOR THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2001
COMPARED TO THE QUARTER AND SIX MONTHS ENDED JUNE 30, 2000.

OVERVIEW

         We contract with hotels and other lodging properties in advance for
volume purchases and guaranteed availability of rooms at wholesale prices and
resell these rooms to consumers through our websites, third-party affiliated
websites and our toll-free call centers. Our revenues are generated principally
through the resale of the rooms. Our cost of goods sold includes the cost of
rooms sold.

         Following our acquisition of TravelNow.com Inc. in February 2001, we
began offering customers the ability to book hotel rooms at over 40,000 hotels
(in addition to the hotels with which we have wholesale supply agreements) in
over 5,000 cities, air travel on 300 airlines, and car rentals through over 60
car rental companies. We earn a commission on the booking of such travel
products either as a percentage of the gross dollar value of the travel booking
or as a fixed dollar amount per booking.

REVENUES

         For the quarter ended June 30, 2001, the Company generated revenues of
$138.3 million, an increase of 77.1% over the $78.1 million of revenues
generated in the same period in 2000. For the six months ended June 30, 2001,
the Company generated revenues of $243.6 million, an increase of 82.7% over the
$133.3 million of revenues generated in the same period in 2000. The increase
for the quarter and six-month period was primarily attributable to increased
room sales through our Internet sites, from the significant expansion in our
affiliate program and from the acquisition of TravelNow in February 2001.
Affiliates generate sales of rooms in exchange for commissions based on the
amount of revenues generated by the Company on the sale of such rooms. Sales
from affiliates (both web affiliates and call center affiliates) accounted for
approximately 66% and 65% of the total revenues for the quarter and six months
ended June 30, 2001 compared to 52% during the same periods in 2000.

         Revenues also increased due to the addition of new cities in which we
offer hotel rooms, an increase in hotels offered in existing cities, and an
increase in room allotments available for sale. We expanded into 11 new markets
during the quarter and 49 new markets during the six-month period, reaching a
total of 146 compared to 60 at June 30, 2000, representing a 143.3% increase.


                                       10
<PAGE>   11


COST OF SALES AND GROSS PROFIT

         Cost of sales includes the cost of rooms sold. The increase in cost of
revenues and gross profit corresponds to the growth in net revenues. Gross
profit increased 78.7% to $43.0 million in the second quarter of 2001 from $24.0
million in the second quarter of 2000. Gross profit margin for the three months
ended June 30, 2001 increased slightly to 31.1% from 30.8% for the prior year
period. Gross profit margin increased as a result of the inclusion of
TravelNow.com's higher margin commission revenues, which more than offset a
slight decline in gross profit margin related to our historical business, which
resulted from our decision to focus somewhat more on acquiring new customers and
increasing market share, and on the absolute amount of gross profit dollars,
instead of solely on gross profit margin.

         Gross profit increased 82.7% to $74.5 million in the first six months
of 2001 from $40.8 million in the first six months of 2000. Gross profit margin
for the six months ended June 30, 2001 and June 30, 2000 was 30.6%. The gross
profit margin for the six-month period ended June 30, 2001 was impacted by the
same factors discussed above.

SELLING, GENERAL AND ADMINISTRATIVE COSTS

         Selling, general and administrative costs consist primarily of (1)
compensation for personnel (2) affiliate commissions (3) credit card fees (4)
advertising and promotion (5) telecommunications and (6) other overhead costs
including occupancy costs. Overall selling, general and administrative costs
increased 98.1% for the quarter ended June 30, 2001 over the same period in
2000. As a percentage of net revenues, selling, general and administrative costs
for the three months ended June 30, 2001 increased to 16.2% from 14.5% for the
same period in 2000.

         Overall selling, general and administrative costs increased 91.6% for
the six months ended June 30, 2001 over the same period in 2000. As a percentage
of net revenues, selling, general and administrative costs for the six months
ended June 30, 2001 increased to 15.8% from 15.0% for the same period in 2000.

         The increase in selling, general and administrative costs as a
percentage of net revenues for the quarter was a result of an increase in
affiliate commissions corresponding to the increase in the amount of net
revenues generated through our affiliate network, and an increase in personnel
costs as a percentage of revenues due to additional staffing levels related to
current and anticipated future growth.

NON-CASH DISTRIBUTION AND MARKETING

         Non-cash deferred distribution and marketing costs increased to $8.7
million for the six months ended June 30, 2001 compared to $1.7 million in the
prior year period. Non-cash deferred distribution and marketing costs consist of
amortization of the fair value of warrants issued to certain affiliates with
whom we entered into exclusive distribution and marketing agreements. The
warrants were issued in 2000 and are amortized over the term of the warrant
agreements. The increase in non-cash deferred distribution and marketing costs
in 2001 resulted from additional warrants issued in late 2000, and the vesting
of certain performance warrants which occurred in 2001 (see Note 4 -- Notes to
Unaudited Condensed Consolidated Financial Statements for further details).
Additionally, non-cash deferred distribution and marketing costs for the six
months ended June 30, 2000 included only four months of amortization.

AMORTIZATION OF GOODWILL

         Goodwill is amortized over a life of ten years and relates to amounts
assigned due to the acquisition of the predecessor business, including
contingent payments, and the acquisition of TravelNow.com. The increase in
goodwill amortization expense reflects amortization of goodwill related to the
acquisition of TravelNow.com in February 2001.


                                       11
<PAGE>   12


EBITDA

         Earnings before interest, income taxes, depreciation and amortization
("EBITDA") is defined as operating profit plus depreciation, amortization of
intangibles, and amortization of non-cash distribution and marketing expense.
EBITDA is presented here as a management tool and as a valuation methodology for
companies in our industry. EBITDA does not purport to represent cash provided by
operating activities. EBITDA should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with accounting
principles generally accepted in the United States. EBITDA may not be a
comparable calculation of similarly titled measures by other companies.

         EBITDA increased to $21.0 million for the quarter ended June 30, 2001,
a 62.5% increase from $12.9 million for the prior year period. EBITDA as a
percentage of net revenues was 15.2% for the quarter ended June 30, 2001,
compared to 16.5% for the prior year period.

         EBITDA increased to $36.8 million for the six months ended June 30,
2001, a 74.5% increase from $21.1 million for the prior year period. EBITDA as a
percentage of net revenues was 15.1% for the six months ended June 30, 2001,
compared to 15.8% for the prior year period.

         The decrease in EBITDA as a percentage of net revenues in 2001 reflects
the increase in selling, general and administrative expense as a percentage of
revenues.


LIQUIDITY AND CAPITAL RESOURCES

         Historically, we have funded our operations through cash generated from
operating activities. Our company historically has been debt free. In addition,
on February 25, 2000, we completed an initial public offering in which we sold
6,210,000 shares of Class A common stock at a price of $16.00 per share, raising
$90.0 million in proceeds net of offering expenses. As of June 30, 2001, we had
$217.5 million in cash, cash equivalents and marketable securities held for
sale. Our company invests excess cash predominantly in debt instruments that are
highly liquid, of high-quality investment grade, and predominantly have
maturities of less than one year with the intent to make such funds readily
available for operating purposes and to support its continued growth, both,
internally and through strategic acquisitions.

         Net cash provided from operating activities was $93.5 million for the
six months ended June 30, 2001, compared to $55.7 million for the same period in
2000. Capital expenditures were $2.7 million for the six months ended June 30,
2001 compared to $0.5 million for the prior year period. As a result of our
rapid growth, we expect to increase capital expenditures for purchased software,
internally developed software, computer equipment and leasehold improvements.

         Our company generates significant cash flows from operations, and cash
flows are expected to increase as revenues increase due to our billing and
payment policies. Management anticipates that cash on hand and cash provided by
operating activities will be sufficient to fund our working capital requirements
for the next twelve months and for a foreseeable period after twelve months.
Additional funds could be necessary, however, to complete sizable strategic
acquisitions or other business combinations in 2001 or beyond.


SEASONALITY

         Our revenues are influenced by the seasonal nature of holiday travel in
the markets we serve, and historically have peaked in the fall. As our business
expands into new markets, the impact of seasonality is expected to lessen.


                                       12
<PAGE>   13


CAUTION REGARDING FORWARD-LOOKING STATEMENTS

         The foregoing discussion contains "forward-looking statements" within
the meaning of the securities laws concerning our plans, goals, product and
service offerings, and anticipated financial performance. These forward-looking
statements may generally be identified by introductions such as "outlook" for an
upcoming period of time, or words and phrases such as "should," "expect,"
"hope," "plans," "projected," "believes," "forward-looking" (or variants of
those words and phrases) or similar language indicating the expression of our
opinion or view concerning the future.

         These forward-looking statements are subject to risks and uncertainties
based on a number of factors and our actual results or events may differ
materially from those anticipated by such forward-looking statements. These
factors include, but are not limited to: the growth rate of our revenue and
market share; our ability to add desirable cities and hotels to our hotel
product offerings; our ability to grow and service our affiliate network; our
ability to effectively manage our business functions while growing at a rapid
rate; the quality of our plans and strategies, and our ability to execute such
plans and strategies. In addition, forward-looking statements concerning our
expected revenue or earnings levels are subject to many additional uncertainties
applicable to competitors generally and to general economic conditions over
which we have no control.

         The time at which a forward-looking statement is made should also be
included in an appropriate understanding of such statement. In that regard, we
do not plan to generally publicly update all prior forward-looking statements
and, accordingly, prior forward-looking statements should not be considered to
be "fresh" simply because we have not made additional comments on those
forward-looking statements.

         Other risks, which should be considered in connection with
forward-looking statements, are described under the heading "Risk Factors" in
our Annual Report on Form 10-K.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISKS

         We currently have no significant floating rate indebtedness, hold no
derivative instruments and do not earn income denominated in foreign currencies.
All of our revenue is recognized in U.S. dollars. Accordingly, changes in
interest rates do not generally have a material direct or indirect effect on our
financial position. However, we are subject to minimal risk from currency
fluctuations because the hotel rooms in foreign markets that we contract to
purchase are paid for in the currency of the country where they are located and
are paid for by us after collecting for the rooms we sell to our customers. As
less than 10% of our revenues currently are derived from hotel accommodations in
foreign markets, we do not believe we have any significant foreign currency
exchange risk and, as a result, do not hedge against foreign currency exchange
rate changes. To the extent that changes in interest rates and currency exchange
rates affect general economic conditions, we would be affected by such change.
Since cash and marketable securities represent a significant portion of our
total current assets, we are at risk of reduced income from our investments in
the event of a decrease in interest rates.



                                       13
<PAGE>   14


                           PART II - OTHER INFORMATION


ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

         During the three months ended June 30, 2001, the Company sold
unregistered securities as follows:

         1. On April 11, 2001, the Company issued 9,677 shares of our Class A
common stock upon the exercise of warrants previously issued to a strategic
partner of the Company. The exercise price of the warrant was $16.00.

         2. On April 27, 2001, the Company issued 100,694 shares of our Class A
common stock upon the exercise of warrants previously issued to a strategic
partner of the Company. The exercise price of the warrant was $16.00.

         3. On May 4, 2001, the Company issued 643,907 shares of our Class A
common stock upon the exercise of warrants previously issued to a strategic
partner of the Company. The exercise price of the warrant was $16.00

         4. On May 24, 2001, the Company issued 52,598 shares of our Class A
common stock upon the exercise of warrants previously issued to a strategic
partner of the Company. The exercise price of the warrant was $16.00.

         5. On June 5, 2001, the Company issued 29,107 shares of our Class A
common stock upon the exercise of warrants previously issued to a strategic
partner of the Company. The exercise price of the warrant was $16.00.

         All transactions described above were deemed to be exempt from
registration under the Securities Act of 1933 in reliance on Section 3(a)(9) and
Section 4(2) of the Securities Act as transactions by an issuer not involved in
any public offering.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         At the annual meeting of shareholders on May 31, 2001, the following
proposals were voted upon. Percentages are based on the total of the shares
voted for and against.

CONCERNING ELECTION OF DIRECTORS

<Table>
<Caption>

 Nominees for Director             Votes Cast For              Votes Withheld
 ---------------------             --------------              --------------
<S>                                <C>                         <C>
Elan J. Blutinger                   600,717,033                     75,670
Robert Diener                       600,318,061                    474,642
Beverly Harms                       600,717,783                     74,920
Victor A. Kaufman                   600,717,783                     74,920
Dara Khosrowshahi                   600,717,783                     74,920
David Litman                        600,318,061                    475,042
Jon Miller                          600,717,783                     74,920
Eli Segal                           600,717,783                     74,920
Michael Sileck                      600,717,033                     75,920
</Table>


                                       14
<PAGE>   15


CONCERNING RATIFICATION OF 2000 STOCK PLAN

<Table>

<S>                                 <C>                 <C>
Votes Cast For:                     598,389,819         99.7%
Votes Cast Against:                   1,807,205          0.3%
Abstentions:                                550
Broker Non-Votes                      1,575,825
</Table>


CONCERNING RATIFICATION OF INDEPENDENT ACCOUNTANTS

<Table>


<S>                                    <C>                     <C>
Votes Cast For:                        600,735,883             100.0%
Votes Cast Against:                         56,820               0.0%
Abstentions:                                    --
Broker Non-Votes                           986,696
</Table>


See also pages 1 though 4 and pages 12 through 15 of the registrant's definitive
proxy statement dated April 30, 2001.

ITEM 6.  EXHIBIT AND REPORTS ON FORM 8-K

(a)      Exhibits.

          EXHIBIT
          NUMBERS             EXHIBITS

          3.1**          Restated Certificate of Incorporation of the Company
          3.2**          Restated Bylaws of the Company
          4.1**          Specimen Certificate evidencing Common Stock

----------


* Filed herewith.

** Previously filed as an exhibit to the Company's Registration Statement on
Form S-1, Registration Number 333-90601, and incorporated herein by reference.

(b)      Reports on Form 8-K.

         On April 23, 2001, the Company furnished information under Item 9 of
Form 8-K regarding its earnings for the first quarter of 2001.



                                       15
<PAGE>   16


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused the report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                       HOTEL RESERVATIONS NETWORK, INC.

Date:  August 13, 2001                 By: /s/ MEL ROBINSON
                                          --------------------------------------
                                                       Mel Robinson
                                          Chief Financial and Strategic Officer






                                       16
<PAGE>   17



                                  EXHIBIT INDEX

<Table>
<Caption>

EXHIBIT
NUMBER              DESCRIPTION
-------             -----------
<S>             <C>
 3.1**          Restated Certificate of Incorporation of the Company

 3.2**          Restated Bylaws of the Company

 4.1**          Specimen Certificate evidencing Common Stock
</Table>




----------

* Filed herewith.

** Previously filed as an exhibit to the Company's Registration Statement on
Form S-1, Registration Number 333-90601, and incorporated herein by reference.


                                       17