Airline, Hotel Prices Are on the Rise: Kayak CEO
Increasing demand in the wake of a strong Memorial Day weekend signals that prices are on the rise for travelers in the United States this summer, said Steve Hafner, CEO and co-founder of travel search website Kayak.com.
Kayak searches multiple online travel booking agencies to provide users with an aggregated search of airline fares, hotel rooms, and car rentals.
"Here in the U.S., our query growth was up in the high single digits," Hafner said. "Average fares in the U.S. tend to be increasing, that's a function of relatively strong demand as well as airline consolidation. Also, the average daily rate for hotel rooms seems to be going up in the single digits here in the U.S. That's a function of strong demand."
With an estimated 4 million searches per day on Kayak, the company sees little change in behavior for both high-end and low-end consumers, Hafner said. However, more consumers are concerned with price increases and are willing to be flexible to find deals, changing dates or locations based upon price.
For those customers, "there are still deals to be found," he said on "Squawk on the Street".
Hafner said that the U.S. market is well-developed for online travel booking and he sees the faster growth rates is mostly in Europe and Asia. Worldwide expansion, he said, is the key to the industry.
Last week, Priceline.com's $1.8 billion acquisition of Kayak closed after months of regulatory review. The deal was announced in November 2012, but was delayed until May 2013 because of a prolonged anti-trust review in the United Kingdom. The deal cleared U.S. anti-trust regulators in January.
"What we bring to Priceline is a great brand and a great audience," Halfner said, dismissing the notion that consumers will use the company's service differently after the acquisition. "At Kayak, since our inception, we've been very committed to being the best place to book travel. That means more comprehensive search results and choice on where to purchase it. That's not going to change under Priceline's stewardship."
"We've got a lot of unfinished business at Kayak. We have a lot of growing to do," he said.