Twenty years after founding Kayak with Paul English, Steve Hafner remains resolute that there is a future for travel search, even while acknowledging the growth limitations due to the dominance of Google in search and traffic acquisition.“People need a place to compare prices,” he said in an executive interview at Phocuswright. Acknowledging Google’s dominance in growth and traffic acquisition, he then likened Kayak and other meta-search competitors to dwarves compared to Google’s Snow White.
To stay competitive, Hafner emphasizes Kayak’s commitment to product excellence, supplier relationships, and marketing efficiency. “We don’t aim to be bigger than Google,” he said. “We aim to be better.”
A Reflective Journey: From Start-Up to Industry Staple
Hafner and his team have certainly proved their mettle in not only surviving but thriving the last 20 years. In fact, sharing a screenshot of “baby Kayak” in its first version, he admitted, “When we launched Kayak, we didn’t even know if we’d last a year. But we have actually outlasted a few airlines.”
Acquired by Booking Holdings in 2013 for $2.1 billion, Kayak has consistently adapted to industry shifts, particularly the rise of Google Flights as a dominant player in the search ecosystem.
In an interview with Phocuswire to mark its 20th anniversary in May, Hafner had said, “We had so many opportunities along the way to expand more aggressively than we did. … I wish we had gambled a little bit more. I also wish that Google hadn’t outbid us for ITA Software because we were so close to buying them. But we lost that one. It would have been a different world if we’ve been able to pull that caper off.”
Steve Hafner: “We don’t aim to be bigger than Google. We aim to be better.”
In the interview, Hafner reiterated the wish they had taken bigger risks, though he remains pragmatic. It certainly hasn’t stopped Kayak from betting on different revenue streams such as its move into managing independent hotels. It “sunset” the scheme lasty year, after investing couple of millions in it.
“We tried things like Kayak Hotels, but running hotels wasn’t the right fit. The return on investment just wasn’t there,” he said, highlighting the importance of strategic focus and knowing when to pivot.
Corporate travel and AI: The future bets
Hafner sees corporate travel as a promising avenue for growth. “Corporate travel is a broken product,” he remarked, explaining how Kayak is addressing legacy inefficiencies with its direct supplier connections and streamlined expense management. Despite the challenges of long sales cycles, he believes the sector offers more sustainable opportunities than battling giants like Google in the consumer space.
Artificial intelligence is another area where Hafner sees transformative potential. “In five years, AI agents will make today’s travel planning tools feel archaic,” he predicted. Kayak is actively exploring new search paradigms powered by AI, with plans to launch updated features soon.
Beyond travel, Hafner imagines AI revolutionizing everyday tasks, from sorting mail to managing schedules. “It’s not about one device replacing another – it’s about a proliferation of technologies that serve different needs,” he said, rejecting the notion of a single platform or device dominating the market.
The next 20 years: Building for longevity
As Kayak enters its third decade, Hafner is clear-eyed about the industry’s trajectory. “The big OTAs will remain dominant,” he said, noting that smaller players often lack the resources to compete. Still, he hopes for fresh talent and innovation, both within Kayak and in the broader travel ecosystem.
For aspiring founders, Hafner offers pragmatic advice: “Be nimble. Respond to data. And build a great team.”
Reflecting on his own leadership, he credits Kayak’s success to fostering an environment where talented individuals thrive. “My superpower isn’t hiring; it’s creating a place where great people want to work.”
Though Hafner remains confident in Kayak’s direction, he’s candid about his personal growth areas. “I wish I understood machine learning and AI better,” he joked.
Watch the interview here
