What with Expedia, Travelocity, Orbitz, Priceline, Hotels.com and every airline, hotel chain and car-rental place hosting its own site, you would think that the last thing the world needs is another travel destination on the Web. Nonetheless, veterans of several of the aforementioned online travel giants have launched yet another start-up, Kayak.com, claiming that it would be more of a travel search engine than a direct competitor to the others. The site has been in beta since last fall and offers a few things not seen on other sites, like complete access to discount airlines like JetBlue and Southwest, and a nice way to refine results without having to go back to the beginning of the search. CEO Steve Hafner, who got out of Orbitz to paddle Kayak's course, recently tried to explain what needs his new venture could serve.
LEVY: Why do we need another travel site? There are millions of them already.
HAFNER: That's precisely why you need another one. There are so many sites out there, all with different design, different inventory on them, that you need one to help users navigate them. The whole idea with Kayak is to be a search engine that helps consumers access all those other Web sites, make it more convenient for them, give them a little bit more peace of mind and then give them booking choice about where they actually make their purchase. Ultimately, what we were trying to do at Orbitz was to sell you something. At Kayak we're not trying to sell you something. We don't actually provide the booking services, so we're one step further removed. We don't have a point of view on what you buy--American versus United--or, frankly, where you buy it, AA.com or even Orbitz. We're not a travel agency at all.
Where do you get your revenues?
The way we get paid is a lot like the way Google gets paid, so when we hand someone off to another Web site that has its products on our site, we get paid a small referral fee.
Are travel consumers spoiled by prospects of big discounts?
There's a little bit of that, but I really think that consumers know intrinsically it pays to shop around. What's really changed [in the past few years] is that the supplier side [direct sales] has gotten a whole lot better. It used to be hard to buy an American Airlines ticket from AA.com. Now it's often better to go there to book.
Kayak has a very spartan interface. Is this an attempt to be Google-esque?
I remember back when Orbitz was really an easy site to use as well. You always start with this design concept of simplicity, but you get tempted over time to add more and more functionality on the Web site to start cross-selling people, to start advertising, having banner ads and pop-ups and stuff. We really want to stay close to our knitting and have a site that's very easy for people to use.
On the other hand, your site is so stripped down that there seemed to be no way to book an itinerary that isn't a simple round-trip flight.
I would've been surprised if you had, because we don't offer it yet. Right now we have round trips only, and it's for economy class. In the next couple months you'll see us do single-city and multicity, business class, first class and then even other passenger types, which is code for infants and seniors, etc. So it's just a question of being still a bit young.
Will you sell travel packages and special offers?
We're gonna get there, but the reality is that the vast majority of Americans don't buy packages. In a site like Expedia, these are 8 percent of their transaction volume, but it's 20 percent of their revenues, which is why they try to force so many people down the packaging path. The truth is, most consumers like to buy individual components.
What do you think is the future of the travel agent in this country?
Travel agents are great, and they're never going to go away, and the reason is they can provide you with expert advice and guidance in a way that a supplier can't, and they can provide you with breadth.
What's it like to start an Internet business in 2005, as opposed to a few years ago, when you did Orbitz?
What's different now is that the amateurs are all gone. Everyone used to think it was easy to start an Internet business. It's awfully hard. The easiest part is, frankly, the business concept. The hardest part is executing it and then making the world aware of it.
As we speak, I understand you're on a Florida vacation. Did you book through Kayak?
I did. I mandate that people on my team book through Kayak, and that if they stay in a hotel and they want to get reimbursed, they have to write a review on it, too.
Really? Where are you staying now?
Actually, I'm staying at my in-laws', so the price is right.
Will you do a review?
I don't know if it would be an objective one. I'd have to say it was a great place. Which it is.