Expedia CEO Dara Khosrowshahi said in the Expedia Q4 2005 conference call: “I don’t see how they [the travel search engines] can gain any kind of real brand awareness or broad brand awareness.”
Well one way is to hire the guy who made Vonage a household name. Kayak today appointed Dean Harris CMO.
Gosh, Stuart, a great checklist. Let’s see how Kayak stacks up as of today:
a) done. Yes, the best place to buy an American Airlines ticket is (drumroll please) aa.com. Let’s see, no booking fee, better functionality, mileage bonuses..I guess they don’t suck so bad anymore. And that’s true for almost every other airline, hotel, and rental car provider.
b) working on it. direct XML and bookit APIs will solve this issue before the summer travel season.
c) no one acquires their initial reach efficiently. At Orbitz, we burned through more than $200 million before we turned a profit. Travelocity is still losing money 10 years after its debut. So we expect to lose money educating consumers that Kayak is a better product than Expedia etc.
I’ll see Greg and Terry next week, and will pass along your love.
Best,
Steve Hafner (Kayak CEO)
Nice work Steve. Now, please don’t take my comments as anti-meta. I mean, it’s obvious to me that meta of some description will play a role down that track. But, c’mon, you sure do have challenges, no?
First off, most air supplier sites actually *do* still suck. Massively. They might try to compensate with no fees etc., but the fact is that the usability of most of them is crap. So, uh, outside of hub cities? They lose. And near as I can figure, handing your customers off to them has to convert like crap much of the time, for you, too.
Secondly, seriously, how are you going to get that high-yield, without-it-you’re-not-relevant independent hotel inventory? Sure the chains would see you and yours as The People’s Champ (”less than 25%? WE LOVE YOU!”). But that barely scratches the surface in terms of supply. It will be a cold day in a hot place before ExpediOrbiLocity let you and yours access *their* inventory. What database are you going to tap into in that case? You think SRS or whoever is going to let you in? Why should they? You’d be renedering them obsolete. And Pegasus would want to be paid…da da da. This is not news, now is it?
And then of course the car guys already have it figured out pretty much, so they really don’t need you — or anybody for that matter. Oh, what about packages, and multi-carrier trips? And destination services?
Oh, and did I mention that your reach is microscopic?
Look, I think there’s real potential for meta, and for you guys in particular - waaaay more than Side-step, though their web based thing is less lousy than their toolbar download thing (Download? Huh? Is it still 1998 and nobody told me?). I’d say that, assuming you can get a *good* reach deal done (read: not aol. Terry, if you don’t learn from history…) you guys are probably in about as good a spot as FareChase. And, of course, the economics of the business mean that you kids should be able to get something done.
But, with respect, it’s far from over. But hey - what do I know? I am just an independent investor and bon vivant 
– Stuart
Stuart -
Excellent point about the need for independent hotels and the challenges of gathering that inventory. Did you happen to catch Dennis Schaal’s Travel Weekly story covering Kayak’s integration with Pegasus, Synxis, and Optims? It’s a good read.
Drew Patterson (Kayak Business Development)
The article Drew is referring to can be found here:
http://www.travelweekly.com/articles.aspx?articleid=49987 (free reg required)
Nice. Sorta. As far as it goes. But a little misleading, no? Unless I am not remembering correctly - and I’ve been out of the game for a year, drinking a lot of red wine and picking the sand from between my toes, so it could have changed - isn’t it just that the hotels mentioned don’t have their own sites, and Pegasus et al white label ones for them? I could have this wrong, but isn’t it just that these hotels are saying “FINE Pegasus, we will pay your stinkin’ segment fee to take the business as direct as we can to save the OTA’s 25%”? Said another way, isn’t this just what those properties *have* to do if they want to use meta as a means to market and don’t want to build another site/connection, because they don’t *really* sell direct?
As opposed to you actually searching, displaying and being able to “sell” everything in the Pegasus box?
– Stuart
stuart,
i can imagine that it’s tough to stay up on industry trends with such distractions. most of the smaller chains and independents don’t have in-house resources to build their own booking engines. Instead they license booking engines from vendors like Pegasus to enable reservations on their sites. By searching the booking engine, you create the same consumer experience as going directly to the hotel’s website. For an example, check out the Kimpton (www.kimptonhotels.com) or Leading Hotels (www.lhw.com) websites.
drew
Right. Which is my point. So essentially you the hotels want you to display them, and they are hosted by PEGS etc. so now they are eating the segment fee and you are “displaying Pegasus inventory” kinda, sorta.
Off to Torino…
– Stuart
Stuart,
Given that the “Orbi” part of ExpediOrbiLocity trio already allows SideStep, FareChase, Mobissimo and the like to display their inventory, I would think an agreement with Kayak might not be too far away. Maybe more like a cold day in Torino if that happens?
Hey, that would be great news for The Yak, to be sure. Though it wouldn’t get them all the way there - Speedya and Travel’O'City (man, I used to *love* hearing that one in focus groups ) have much more merchant inventory than Obits. But still would be good news.
Oh, and fact is Torino isn’t all that cold
– Stuart
[…] nt and disruptive just like the services they are creating. Then there’s branding. Kayak hired the former CMO of Vonage. This guy will spend money to build the travel search industry and everyone […]
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February 17th, 2006 at 11:56 am
Good move. Of course, until (a) the Supplier sites stop sucking so much and (b) users are actually able to find the fares displayed and (c) these guys somehow get access to the 80% of hotels that *aren’t* in chain/consortium databases and (d) they get any reach to speak of without nuking what little efficiency they have… they will languish in the wilderness. Let me check my notes…yup, that’s it. But then, they know that all ready.
Not that this isn’t an obvious way forward, and not that I don’t love you Kayak kids (Hi Greg, Terry…
)
– Stuart