“Price comparison is still going to be our bread and butter… We saw this opportunity to bring our tech savvy to these independent properties.”
Quote from Steve Hafner, co-founder and CEO of Kayak, in an article on PhocusWire this week about its decision to launch a real-life hotel in Miami.
Each Friday, PhocusWire dissects and debates an industry trend or new development covered by PhocusWire that week.
Kayak’s announcement this week that it’s getting into the hotel business is a curious move. Or is it?
Some might claim that it’s been coming for a few years, whereas the reality is that industry watchers have pondered since the 2000s if digital travel brands might take to the “real world” when the opportunity arises.
Expedia’s efforts to push the brand into the hotel concierge space with booking units for experiences and activities, was one of a number of fairly low-key and simple ideas.
And OYO’s model of franchising properties under its own brand is one that became the bedrock for the company in its early days.
Perhaps that model is what caught the attention of Kayak CEO Steve Hafner, who lives in the Florida city of Miami where the first property from the travel search site is located.
Whether the idea came about as a way to place the brand into the minds of consumers in a different way, post-pandemic, is unclear – it may have been something brewing at Kayak Towers for some time.
Beyond the obvious PR opportunities for Kayak, talk in the announcement about the property (which will managed day-to-day by Life House) being a “design lab” to develop software for independent and boutique properties, is arguably the most interesting element of the launch.
Kayak is coming at that from a position of zero experience and arguably zero influence in the hotel tech sector – but despite there being many vendors doing that job already, Hafner and co clearly see an opening that is far removed from its sizeable position in the hotel metasearch market.
Whether hotels will be inspired enough by whatever software that Kayak develops to ditch their existing provider remains to be seen. There will be some who consider it a brand extension too far; others will admire Kayak for simply having a go at something new.
What is equally interesting is the positioning of the move. Kayak and many of its metasearch kin have often been associated with price comparison, allowing users to find the cheapest fare on a fight as the default option.
Kayak Miami Beach will clearly (check the imagery) not be the cheapest property in the city, so perhaps this is a move to take the Kayak brand into a somewhat upmarket arena.