kayak quietly launched its corporate travel solution Kayak for Business (K4B) just before the end-2019 pandemic with a full launch in July 2021.
The product has been in development for the past year, but is still being treated as a startup by Kayak, according to CEO Steve Hafner.
He spoke with PhocusWire about the ups and downs of work during the pandemic, as well as the challenges facing Kayak for Business now.
The first mention of Kayak for Business was at the end of 2019. What did you think when it was launched?
The history of the origin is that we built it for our own use. Like what we did with Kayak initially, we couldn’t find a travel site that we liked to use as users, so we created Kayak.
In combination with OpenTable [which Hafner also oversees] We are approaching 2,000 employees and we didn’t like the corporate travel solution we used, especially from OpenTable, so we put together a small team and said let’s innovate and build some things on Kayak’s user site and that it eventually turns into K4B.
What did you not like about what is there? What didn’t they have?
They just didn’t have good search results or a user interface. We decided to start with Kayak’s user interface and then add the things that large corporations need, such as policy, cost tracking, approval queue, corporate and tariff rates, and easy booking solutions.
How difficult was it to do some of the things for approval and policy?
It was not difficult for our policy, but as we built we thought, “Why not build it in a way that others can use it?”
This took a little more work, especially in terms of data security. It’s one thing to have a user site that anyone can access, but when you have corporations that set special rules there and passengers can track each other, you want to make sure you have solid logs and data privacy.
Is it true that you started in the pandemic?
We released it publicly in February 2021, but between 2019 and February 2021 we had a beta site that corporations could request access to, and we would allow them, in parts, as we replicated the product so we could get more extensive use and finding and correcting errors. But in fact we did not release it in the world until July 2021.
Can you beat your customers for us?
We created it for small and unmanaged corporations, and 87% or so of our registrations are companies with less than 250 employees, so the product really appeals to people who don’t have a staff travel manager and may not have had one in the past. even official travel policies, but the product makes it easier for you to do so. But there are some big companies that use K4B.
Why do you think so? Is there a change in the way people look at these tools and what they need? Why would a large company turn to Kayak for Business?
Because this is a good product and the price is great – it’s free! I think the big corporations have thrown away their traditional edge travel managers and are using Kayak for Business side by side with their traditional program. I guess one day we’ll catch up with some of the more advanced features that corporations have that K4B lacks, and then maybe they’ll turn off the world’s GBT or CWT. The only major difference between K4B and others is that they provide customer service and we don’t.
What were the pros and cons of starting a pandemic?
It wasn’t the way we drew it. We thought we’d get started, get some traction, and add features over time. The pandemic was a bit silver because it gave us a longer track to build features without using much.
Airlines were much more receptive to partnership discussions, as they tried to find business wherever they could.
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This had a real chilling effect on the competition, so all the big corporate travel agencies and even some of the new entrants were in survival mode; we didn’t have to worry about that because we hadn’t accumulated a lot of staff or overheads, because we still had a consumer business that was actually quite sustainable during the pandemic.
The downside is that it took us a long time to achieve the PnL impact of the effort we see now, although it pales in comparison to the consumer side of the business.
How big do you think it can grow?
This is an issue that we discuss all the time. In healthy times, the consumer side and the opportunity for business travel should be approximately the same in terms of travel costs. I do not think that our market share will be as high for business travel as it is for consumers. I think the consumer will probably always be seven times bigger.
Aside from talking to the press and adding new features, what are you doing to get more customers?
This is the true beauty of the business model – we can catch people who use kayaks and divert them on the path of business travel. We are not trying to create a brand name, we are not addressing corporate clients, we are simply intercepting these corporate clients when they use us for entertainment or cheat on their corporate travel program with Kayak.
How do you catch them?
If you visit Kayak, you will see that there are many access points where we can attract you to the business program. We can let go [a message] from the header, based on the searches you do, if we find it’s a business search, if you search very often, we’ll show you the message more often. If you are a registered user and have a corporate email address, we will also send you the message. On average, without a sales team, we register two to three thousand corporations per month from this activity alone.
What about detention? Do you give them enough to keep them?
Detention is not a problem because it is a free program and what people usually do is register and use us or not. The problem is really the use and at the moment we think that the broken windows of this are that not many corporations from the small country still travel.
What kind of functionality is used the most?
On the business side, these are flights. We already have solid policies that companies put in place, and if you have a Slack approval queue and email, that’s better than calling someone, corporate rates and tariffs. But the thing I like to use the most, and this is anecdotal, is the integration of Expensify, so if you book something on Kayak, it automatically fills out your Expensify expense report.
What kind of functionality would you like to integrate in the future?
There is still a lot of integration that we do not have. Concur, for example, still doesn’t play well with Kayak, and many companies use Concur, so I’d like to find a way to partner with them down the road. We still have power to connect. I think we live in 60 markets, but the world is a much bigger place than 60 markets. And I think there are still some mistakes that we know need to be corrected.
Did you keep the team that originally created and developed it small so you could handle these things?
The team is a little bigger than it was in 2019 and they are always looking for more resources, but they are still treated like a startup in Kayak, which is great.
And this is probably your favorite way to keep it fresh and innovative?
We have a K4B team, and we have another team that is also a starter at Kayak Hotels, so we have some experience on how to do these things.
Do you think it will stay free or is there a possibility to build something premium or subscription?
This is something we talk about a lot internally. I am currently more focused on acceptance and use. K4B will always be free at the basic level. We are looking for a corporate version for large corporations and it will have some kind of SaaS fee.
Do you see yourself up there with TripActions and TravelPerks or up there with Amex GBT, CWT and these guys?
I think we are better than these characters in terms of our technological turnovers and our user and data. I think they are better than us in terms of customer service because they all provide it. My challenge is how deep we can go on corporate travel without providing customer service, and this is where we play, where we draw the line.
What is your broader view on returning business travel? Bill Gates said 50% will never return, while others say more than 20 to 25% will never return.
Both of these views have already turned out to be wrong. In the US, we are already returning to 85%. If you talk to the CEOs of airlines, they will tell you that we have already returned to 85%. This is without returning abroad and without abolishing the requirements for testing and removing masks for international flights. I think that after this disappears and provided we remain in a relatively stable economy, business travel has a bright future.
How can you see through technology that a mix of business and leisure is happening?
This definitely happens, we see it because of the parameters of the request. Once upon a time, you could easily distinguish between a business traveler and a tourist only by the search query – travel duration, origin, Monday or Tuesday? Was there a weekend stay, etc.?
What we see now is that it has become much more blurry and the average journey time is longer than before; we no longer see these day trips, and the advanced purchase window is also changing. Sometimes leisure customers book well in advance and business travelers book close to the day of departure. Now folk free time book a few days in advance, so I think the fun definitely happens, although I hate that word.
How else can you build K4B?
We introduced a lot of fun things into the product to gamify it a bit and get some word of mouth. One of the best things I’ve seen our people do is that individual employees can recommend places to stay or things to do for people visiting their location, which is really great. When I go to visit our office in Berlin, I stay at the hotel where our Berliners tell me to stay and do the activities they tell me to do.
The other thing is that we just moved to work from almost everywhere [policy]. We are remote first in Kayak and OpenTable, which means that our people are actively encouraged to change offices and can go to work in another office for up to six months and use K4B to do so.