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Kayak’s acquisition of Momondo, which was announced earlier this year and is currently seeking regulatory approval, represents part of an effort to shore up Kayak’s lagging presence in Europe, according to Kayak CEO Steve Hafner.
Momondo’s strong brand recognition was perhaps the most attractive part of the Momondo package for the metasearch giant.
“It’s a great deal for us,” said Hafner at Skift Forum Europe. “They have local market expertise in ways we don’t… Momondo has done a great job building a brand. I quibble with [the] idea that everyone [in the online travel space] is the same. We’re not selling flavored water; brand is a big component of that. Momonodo has out-executed us in Europe on the brand dimension.”
Metasearch competitor Trivago remains Kayak’s most challenging competitor, due to its intense spending on advertising that has resonated deeply with travelers across Europe. It’s hard for Kayak to compete with a company spending 80 percent of its revenue on advertising, according to Hafner.
“[Trivago is] a big irritant to us because they are able to spend so much money on advertising,” said Hafner. “When you get a competitor that is about market share, not profit share, it’s a bit irritating.”
The metasearch space also faces the reality that travelers don’t really care where they end up booking; shopping around on direct sites, online travel agencies, and metasearch engines has become normal, somewhat eroding the gains enjoyed by metasearch sites being seen as having a more comprehensive offering of options.
Hafner mentioned a recent white paper released by Skyscanner that suggests metasearch sites will soon act like branded online storefronts for airlines.
“In general, people want to price shop, so the question is where do you want to do that,” said Hafner. “The best place to book a hotel is on a hotel website and airfare is on supplier website, but people still need to cross-shop. Gareth [Williams, Skyscanner CEO] tends to make things really complicated when they’re simple. People want to cross-shop and want to transact, and we’re all kind of experimenting with the best way to get that done. We’re all incentivized to have a transaction occur, but we all don’t need to write a white paper about it.”
When asked whether Kayak is considering turning its focus to Asia-Pacific after the Momondo acquisition, Hafner chimed in that the Chinese online travel space has yet to produce a true leader, despite Ctrip’s position at the top of the market today.
“Ctrip has the travel category cornered in China, but there are new companies popping up now,” said Hafner. “I wouldn’t bet against Baidu, Tencent, or Alibaba. They’re not going to stay constrained to their home market; could one of them gobble up Expedia?”