Skift Take

Nothing ventured, nothing gained. Kayak won't be opening any new hotels near you, but still hopes to make a go of building a hotel tech business. That, too, could be a big challenge.

Kayak exited the business of opening hotels and branding them as Kayak hotels, Skift has learned.

Kayak co-founder and CEO Steve Hafner confirmed the news, adding that the company laid off around 10 employees in connection with the move.

“We made the decision towards the end of 2022 to focus on hotel tech instead of building a chain of K-branded properties,” Hafner said.  “As a result, we unfortunately parted ways with a small team of folks focused on that effort. We still have engineers on the tech side.”

The news hasn’t been reported until now.

Hafner said Kayak intends to keep developing hotel tech.

Kayak entered the hotel business in 2021, and the first property it opened in partnership with hotel management company Life House was the Kayak Miami Beach.

When their leases expire, Life House, which operated three hotels for Kayak, will drop “Kayak” from the hotels’ names. The lease for the Kayak Miami Beach, for example, will expire in April 2024.

The other two hotels under the Kayak-Life House partnership were the Kayak Sol Playa del Carmen and Kayak Luna Playa del Carmen. Their leases are believed to expire later than the Miami Beach property.

Rami Zeidan, the founder and CEO of Life House, said the company would work with the hotel owners to determine branding post-Kayak, but might return to their names prior to the Kayak deal or something similar.

“We’ve learned a lot from the Kayak-branded hotels and the partnership is ongoing,” Zeidan said.  “We are continuing to operate those hotels and to develop great software with Kayak based on those learnings, which was always the intention.”

The idea behind Kayak’s entry into the hotel business — beyond offering hotel listings, advertisements, and price comparisons on Kayak brands such as Kayak, Cheapflights, Momondo, and HotelsCombined — was to use Kayak’s brand recognition and user base to help attract guests, and to take learnings from providing operations tech to build a broader tech business for hotels.

Hafner said Kayak still wants to build that hotel tech business. Sister company, both part of Booking Holdings, tried something roughly similar several years ago, but shut down the product, BookingSuite, in 2020.

Although online travel agency relationships with hotels seem to be better today than they have been historically, a Kayak hotel tech business might still have to deal with the challenge of hotels not wanting to cede control of operations, let alone data, to an online travel company.

Kayak seemed to be committed to the hotel business in its early stages. It co-led a $60 million financing round for Life House in 2021.

In 2018, Skift speculated that Expedia or Priceline Might Just Be the Next Great Hotel Brand, as many things in the travel industry seemed to be converging, including hotels and short-term rentals, for example.

With Kayak’s exit from offering hotels under its own brand, that prediction isn’t happening for the moment, but still could one day.

This reporter never stayed in one of the three Kayak-branded hotels, but spent an afternoon hanging out several months ago in the lobby of the Kayak Miami Beach. It had a vibrant, youthful social scene.

Still, parent company Booking Holdings and Kayak apparently felt that the investment wasn’t worth it, and as Hafner said, it wouldn’t be pursuing the idea of building a network of hotels under its own brand.

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Tags: booking holdings,, cheapflights, expedia, expedia group, future of lodging, hotel management, hotelscombined, kayak, life house, metasearch, momondo, online travel, online travel newsletter, priceline

Photo credit: The lobby of the Kayak Miami Beach.

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