How Kayak Fared 10 Years After Priceline’s Offer to Buy It

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Editor’s Note: Every Wednesday, Executive Editor and online travel rockstar Dennis Schaal will bring readers exclusive reporting and insight into the business of online travel and digital booking, and how this sector has an impact across the travel industry.

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Ten years ago this week, on November 9, 2012, the Priceline Group (today’s Booking Holdings) announced a deal to acquire Kayak, the Connecticut-based metasearch engine, which had been a public company for less than four months.

“A bomb just dropped in the online travel world: Priceline the world’s largest travel company, has agreed to acquire travel meta-search company Kayak, for about $1.8 billion,” wrote Skift founder Rafat Ali, adding, “Priceline will gain a great online and mobile team to build its portfolio and will put muscle behind the Kayak brand.” After regulatory scrutiny, Priceline welcomed Kayak into the fold on May 21, 2013.

To understand the context, Kayak was among the hottest things in U.S. online travel in those days, although Google had acquired flight-tech company ITA Software in 2011.

When Kayak, which was co-founded in 2004 by Steve Hafner and Paul English, went public on Nasdaq on July 20, 2012, Skift published a blog with around 18 updates documenting every move that day. When the closing bell clanged on its initial trading day, Kayak’s share price had increased 26 percent to $33.18, while 70 percent of Nasdaq’s other listings headed downward.

So what has been the outcome for Kayak so far under Booking Holdings, and in an era when Google’s fight and hotel metasearch products have established a global footprint and sucked some of the life out of numerous competitors? From a financial standpoint, It’s tough to say with certainty because Booking doesn’t reveal much about Kayak’s earnings.

Asked about Kayak’s fate under Booking Holdings over the last nine-plus years, Kayak CEO Hafner told Skift: “We don’t report numbers, but I can assure you that our business has prospered since the acquisition. Booking Holdings has supported our international expansion (from 14 countries to over 40), mergers and acquisitions (more than $550 million for Momondo and Hotelscombined), and anything else that we’ve tried like Kayak Miami Beach.”

Kayak/Booking Holdings acquired metasearch companies Momondo in 2017 and Hotelscombined in 2018. In partnership with hotel operator Life House, there are now three Kayak-branded hotels, one in Miami Beach, Florida, and two in Playa del Carmen, Mexico.

“If it hadn’t worked, I still wouldn’t be at Kayak,” Hafner said, contrasting his tenure of 18 years or so at Kayak with leadership changes over the years at Expedia-controlled Trivago and Trip.com Group-owned Skyscanner.

One person close to Kayak, who has some knowledge of Kayak’s financials, said “they continue to crush it.”

Google has certainly adversely impacted Kayak’s stature. And at times one has to question whether Booking Holdings could be committing more advertising and marketing dollars to keep Kayak front and center in travelers’ trip-planning considerations. In 2015, then-Priceline Group CEO Darren Huston even questioned the value of metasearch, although his own company, now called Booking Holdings, already owned Kayak; Expedia had a majority stake in Trivago; and Trip.com Group acquired Skyscanner the next year, in 2016.

“The Google threat is real,” said Kayak co-founder Paul English, who left the company in late 2013. “I wonder if there will ever be any antitrust against Google for taking over search results vertical by vertical, and starving what were previously strong companies.”

English added that rivals such as Tripadvisor, which is currently formulating a turnaround plan, “were much more vulnerable than Kayak, since I think most of TripAdvisor’s traffic was SEO (search engine optimization), where most of Kayak’s traffic was self-directed.”

English said he’s disappointed that Kayak hasn’t done more with taking direct bookings, especially mobile ones. “It is so harsh to do a search in the Kayak app, and then when I find what I want, I have to open another app and start all over again,” he said.

Martin Lumbye, the CEO of North East Venture, was one of four people who launched Momondo in 2006. He left Momondo in 2014, and Kayak acquired it three years later.

Lumbye said Momondo’s front end doesn’t appear to have undergone any radical changes in recent years, but he believes its back-end technology is likely faster and deeper.

“The biggest developments probably lie in the access to capital needed to scale internationally, and the ability to have more power in negotiations with online travel agencies and airlines regarding the costs per click they pay to Momondo and Kayak because size does matter,” Lumbye said. 

Kayak, as well as Tripadvisor, used to be must-use marketing vehicles for travel companies, at least in North America. Is Kayak still important?

Clayton Reid, CEO of travel and tourism marketing company MMGY Global, said he’s surprised how well Kayak has withstood Google’s “aggressive tactics.

Kayak “is still very much relevant for travelers in our survey of travel influence” Reid said. “Kayak has certainly fared better than Tripadvisor and Trivago, with a more consistent place in the travel making decision process. The other two have tried to move more up funnel with, I would argue, poorer outcomes.”

In Brief

Airbnb to Start Showing U.S. Guests Total Price Up-Front

Airbnb will next month begin showing U.S. customers the total price of a booking, minus the taxes, up-front in its listings and on maps when they opt in to view it in that way. Under regulatory pressure, the company has done this in Europe for an extended period. Airbnb said it will also curb some hosts onerous checkout task requirements. Skift

Tripadvisor Hints at Turnaround Plan

Tripadvisor officials hinted that its Viator tours and activities brand, as well as hotel metasearch, will be anchor elements of its turnaround plan under new company leadership (new CEO and chief financial officer). Details to come in 2023. Skift

Hopper Gets More Funding From Chum Capital One, $96 Million

Who is Hopper’s favorite distribution partner? Undoubtably it is Capital One Travel. The credit card company just contributed an additional $96 million in fundings to Hopper’s coffers as banks up their travel portal game. Skift