How Kayak Let Quarterly Revenue Sink Their Ship

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It’s sad when a business you love starts to die. Such is the case with Kayak. I’ve loved Kayak for years. It was such a simple and quick way to find the lowest prices on flights, and then to refine my search with different filters (when does the plane land? How many stops? Are prices cheaper at another airport? Am I willing to take a red-eye?)

Today, Kayak still has those features, but they do everything they can to steer you toward a monetization opportunity that you never asked for and quite possibly ends in an abysmal outcome.

For example, I recently looked into a business class ticket on Kayak. Three annoying things happened. First, I got a pop-up of hotels in my destination city, even though I was just looking at airfare.

?Second, the top results that Kayak showed me were from ticket brokers.

And lastly, in case I didn’t click on the ticket broker results, Kayak has taken a huge chunk of real estate on the site and dedicated it to . . . ticket brokers.

The hotel upsell, while annoying, is not my main issue. Rather, it is the ticket brokers that are the problem.

Take, for example, Crystal Travel, one of the recommended brokers. Their price on this ticket (note: this was not my actual itinerary but Crystal Travel showed up prominently in my original search) is $100 less than every other seller for the same exact itinerary. For my search, Crystal was offering $600 off the best rates anywhere else.

Too good to be true? Apparently so, as the reviews of Crystal Travel repeatedly include phrases like “scammers”, “liars”, “cheats” and “a front for a scam operation.”

Other brokers that Kayak prominently promotes also have the same bottom-of-the-barrel reviews. So you might save a couple hundred bucks on your trip, but you might also end up stuck in a foreign airport without a valid ticket and without any customer service support to resolve your issue.

I suspect that these scammers do so well on Kayak, primarily because they are benefiting from Kayak’s strong brand. Because Kayak used to stand for accuracy and quality, users today book tickets with scammers because they assume that Kayak wouldn’t let fraudsters show up in their results.

So what happened? Almost certainly, someone at Kayak had a quarterly number to hit and simply showing results from, you know, actual airlines, was not driving enough revenue. So the natural next step was to find companies that would either add to the revenue Kayak was getting from the airfare purchase (hotels) and to take huge fees from scam artists rather than the modest commissions paid by the airlines.

Death by a Thousand Quarterly Earnings Calls

This strategy - which seems to be getting more prominent by the day for Kayak - will likely work well. Until it doesn’t. Brands are powerful influencers of human behavior. Millions of consumers visit Kayak because the brand has historically been associated with “accuracy”, “comprehensiveness” and “speedy results.”

Building a brand is tough. Maintaining that brand is equally tough. I suspect that the bean counters at Kayak don’t understand the tradeoff they are making between short-term revenue and maintaining their brand. The Kayak team is probably looking at their quarterly numbers and giving each other high fives. “Our revenue from Fraud Airlines went up 5X year over year - we are getting HUGE bonuses this year!”

Eventually, consumers figure it out and their perspective of a brand turns negative. Once that starts to happen, it is often too late for the brand to recover its relationship with its customers. Suddenly, the numbers stop looking good. “What happened to Fraud Airlines - where’s the revenue? Why has our gravy train stopped?”

Great companies measure success by lifetime value (LTV) and customer satisfaction (such as Net Promoter Score). They eschew any short-term revenue opportunity that interferes with either of these two metrics. Average companies - like, sadly, Kayak - can look great for a while but eventually fade away.

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