skift take
— Dennis Schaal
Kayak's website was launched to the public in May 2004 as a pioneer in travel metasearch.
When Kayak went public in 2012, it created such a buzz in the travel and technology worlds that Skift published a live blog tracking all developments.
A few months later, Priceline Group (now called Booking Holdings) announced a deal to raise $2.1 billion.
I spoke to Steve Hafner, co-founder and CEO of Kayak and OpenTable, on a Zoom call while in an Uber in Manhattan. I also exchanged emails with Paul English, another co-founder and serial entrepreneur, about Kayak's 20th anniversary.
The interview has been edited for clarity and brevity.
Dennis Schaal: So, Steve, why are you still here? Why are you still in Kayak?
Steve Hafner: Because online travel isn't solved yet. Look, it's come a long way in his 20 years. I think online travel really sucked when we started. I just went from offline to online, but I was still stuck with a blue link and a sea of 9 flight results. If I made a change, I had to wait for something to load.
It's much better now. 20 years later, mobile his app appeared, with thousands of search results. It's so easy to buy things now. However, the amount of information is overwhelming these days, so it's still a little scary.
I think it will be better in 20 years. AI is a new technology that everyone hopes will help make that happen. But it still doesn't work. So I'm still going to stick around until it's fixed.
What does the future hold for Booking Holdings?
Maybe Glenn Fogel (CEO of Kayak's parent company Booking Holdings) will retire soon (or eventually). Most founders die within a year of selling their company. But you've joined this huge company with lots of opportunities. So what's in store for Booking Holdings?
I don't know. It was never about the job, it was about the product. We have a problem with online travel and we want to improve it. And we have a lot of unfinished business, so I'm happy to still be with the company.
I wish I could have completed the job and actually resolved it, but I still haven't. As long as Booking Holdings keeps me here and I can help the team, I'll be here. It has nothing to do with my role at the company.
The dawn of kayaking
Do you have any thoughts about the initial team that started Kayak and the process of launching Kayak? How did you guys get started?
The secret to a successful company is a little difficult to pinpoint, but it starts with a good idea. A great team, plenty of capital, and good luck. And we were able to combine all these elements at the right time.
I mean, the original founding team was phenomenal. Paul English, Bill O'Donnell, Paul Schwenk, Jeff Lago, but a bunch of guys. But I think the talent level at Kayak now is just as good as it was back then. If not, even better.
We asked Paul English, Kayak's co-founder and former chief technology officer, via email for his thoughts on Kayak after 20 years.
Paul, any thoughts on Kayak's 20th anniversary?
Paul English: Hello from Rome. What impresses me most about Kayak's early days is how lucky the team we hired was. I'm not being humble when I say that without the original team, Kayak would never have succeeded. I'm still a fan of kayaking. I use it all the time. If I were to work in kayaks again, I would turbocharge the Trips. [For more about English’s career at Kayak, read this.]
Kayak vs. Google
Steve, I told someone on the team that I was going to interview you around Kayak's 20th anniversary. And they said to me: “Look, Google is having lunch and Open Table has been overtaken by her Rezy and other companies.” What would you say to that?
I think your colleague has a misunderstanding. Our business is very successful, and OpenTable is very successful. Well, we're not as big as Google. However, we have no intention of doing so and are having a lot of fun creating great products.
And we are very profitable. There aren't many companies that can say that much. I remember my first pitch to venture capital when we launched Kayak. Because when we started Kayak, Google existed.
We said, “Here's what we're going to do.” Build this metasearch site and search travel results from all over the web. Because at that time there was no mobile app. We direct consumers to where they want to shop, and we make money doing so.
This is a big enough category that we could be number two. And that's where we are. And our goal was never to be bigger than Google. That's better than Google. And we're better than Google.
how?
As a consumer, when you search on Kayak, you get better search results than Google, with more options, better prices, and more accurate search results.
So, go to Google and look at different categories, not just travel. But when you're ready to buy, visit Kayak. By the way, just move to OpenTable. Tell your friends that OpenTable has over 55,000 restaurants and fills 1.7 billion seats annually. We have a very profitable business. So he's wrong.
Google declined to comment on whether Kayak is better than Google.
Selling to Priceline
Do you think Kayak would have done better if it had remained independent? Too often, brands get lost among larger companies. Do you think Kayak could have done better on its own?
Absolutely not. When they bought us, we lived in his five countries and his three languages. Today, we are present in 60 countries and 25 languages, allowing us to operate independently. Since then, we have made $700 million worth of acquisitions. We are not distracted by the public markets.
Check out Trivago and TripAdvisor. They are independent – how well do they do it?
Being independent is overrated. We achieved everything we wanted to do. Glenn and BHI (Booking Holdings Inc.) have been extremely supportive of our mission. And I'm very happy to be part of a larger group.
What I learned from Kayak Hotel
How do you feel looking back at your foray into kayak hotels at this point? [Kayak opened three Kayak-branded hotels but exited the business after around two years in late 2022.]
It was worth a try. One of Kayak's hallmarks is that it has never shied away from being innovative and taking risks, and Kayak Hotels took a big risk.
However, it must be remembered that at that time Sonder and Serena, as well as many other companies, were pursuing this field. So we thought we'd give it a sniff too.
And what we quickly learned was that there's a reason OpenTable doesn't have restaurants, and there's a reason Kayak doesn't have hotels. Because the real guest experience involves a lot more than just great technology. And when we got into it, everything we do at Kayak is test, learn, and scale – Kayak Hotel was never able to get past the learning scale. We quickly learned that this was not a great business.
When you say OpenTable doesn't have restaurants, does that mean OpenTable doesn't own restaurants?
OpenTable does not operate restaurants. That sweet spot is software. And it turns out Kayak's sweet spot is software, too.
Was OpenTable a good deal?
Do you think it was a mistake for Booking to acquire OpenTable because at the time everyone was talking about the synergy between travel and dining? Sounds logical, but it didn't really work out that way.
OpenTable was a great acquisition. It's an amazing company. Food and accommodation are fundamentally different, so synergies with Booking.com were not expected. Most meals are local. It's not a tourist. I don't use the Booking.com app to make restaurant reservations. Use the OpenTable app.
It was an incremental acquisition, but let's leave it at that.And, personally, I wish I hadn't paid more for OpenTable [$2.6 billion in 2014] than what I paid for the kayak [$2.1 billion in 2013] Because Kayak is a more profitable company. But it is what it is.
accomplishment and regret
What do you think are Kayak and OpenTable's three biggest accomplishments over the last year?
On the Kayak side, we've always done well with consumer sites and meta. Since 2021 we have been working on a kayak hotel, but it did not work out, but we also have a business kayak.
I think Kayak for Business is on a great trajectory right now. So his three big corporate clients are PricewaterhouseCoopers, TripAdvisor and Diageo. More to come. And he has 30,000 small accounts that self-sign up and use the site.
Are you doing managed travel?
Businesses can use us to see where all their employees are traveling. You can upload your own travel policies and negotiated rates. And the best part is, you don't have to submit expense reports or use a credit card.
You don't need your own personal credit card. We have a virtual credit card. The bill is then directly billed to, for example, American Airlines via the blockchain. Therefore, you will save his 2% fee on your credit card.
And how is blockchain used?
In other words, it is a ledger that shows where transactions take place and who last made the transaction. So if you are a traveler and you book on Kayak; [actually] Please make a reservation at AA.com. Let's also say you use a corporate travel agency to modify the itinerary that is entered into the blockchain. We have a digital ledger.
So at any point of contact, you can see exactly what happened throughout the customer journey. That's pretty cool.
What is your biggest regret and what are you most proud of about Kayak?
We had an opportunity to buy 25% of Uber early on, but we didn't do it. That's a pretty big regret. I think we may have put it on sale a little too soon. I'm glad it sold. However, it turned out to be OK.
And in the early days, did they use Adobe Flash to launch websites? They shouldn't have done that. Therefore, the development work took about a year.
But overall, we've been successful over the last 20 years, so I don't have many regrets. we were very lucky. We had a great team and achieved great results. And I predict the next 20 years could be just as good, if not better.
Photo credit: Kayak and OpenTable CEO Steve Hafner.
