This article is written by Ritesh Gupta, reporter at TravelDaily China.
In every business, there are decisive moments that eventually signal the beginning of a new era.
One just can’t stop relating this to what KAYAK is considering, and its repercussion for the entire travel meta-search category.
Yes, it’s about KAYAK’s foray into China. It is something that has been anticipated for long in the travel e-commerce category. The development would be significant considering the way KAYAK has gone about its expansion post its merger with The Priceline Group. For instance, in late 2013, the entity launched its operations in eight new markets in three continents. The list included Hong Kong and Singapore.
But China would definitely be a big test. In fact, this could also be termed as the final frontier for the U. S.-based entity. Or that very decisive moment, one where a global brand would end up leading the traffic generation business on a global, bigger scale.
KAYAK’sVP Asia Pacific,Debby Soo, has a vital role to play. She has launched local KAYAK sites in Australia, New Zealand, Hong Kong, Singapore, Taiwan, India and Japan.
San Francisco-based Soo is quite clear about the strategy KAYAK is considering for China. The first phase wouldn’t bea marketing blitz. Rather it’s about the product first.
“Content and understanding the nuances at the local level are of utmost importance,” said Soo, who is scheduled to speak at the upcoming 2014TravelDaily Conference, to be held in Shanghai (September 3-4, 2014).
The team is looking to stick to its proven approach of establishing its presence in markets outside the U. S. “As we have done elsewhere, product quality is preeminent, followed by monetisation. Once a certain threshold is reached, then the next step is worked out. Till then there are no big marketing plans, and possibly no strategic alliances,” shared Soo.
Being ready for China
Soo is clear about why the team is optimistic about China.
“We believe that Chinese users will be compelled to use KAYAK because of our easy, clean, intuitive user interface, and our fast, accurate and comprehensive search results,” said Soo,
So is there any benchmark or analysis that showcases the site’s superiority over others?
“We have consistently invested significant time and resources to innovate to meet customer demands,” said Soo. She adds, “We evaluate our performance (against other meta-search sites and OTAs)If any of our partners’ APIs or data isn’t accurate enough then we fix the problem includingat times discontinuing the association.”
KAYAK believes its legacy would serve it well, be it for its global brand recognition or association that it has built over the years..“What we definitely are upbeat about is our global presence. It certainly offers suppliers, OTAs etc. a chance to reach out to a wider audience,” At the same time, Soo acknowledged: “The long tail end of content would be a challenge. Our team is so lean (70% of 300-odd employees are technologists!) that reaching out to the entire market would demand perseverance.”
“Fail fast, fail often” mentality
KAYAK’s “fail fast, fail often” mentality drives innovation and entrepreneurial spirit among its tech team.
“For example, in our technology center in Boston, we stream live customer data -- the latest feedback, Twitter feeds, searches per country, etc. – there is a constant sense of urgency and focus on what’s happening right now with customers and how to fix it fast,” said Soo.
The team minutely scrutinizes user behaviour.
“We have so much data on what users are searching for and clicking on and we use that data to drive product decisions. We have several versions of KAYAK live at any given moment to test user preferences,” said Soo.
KAYAK’s technologists are counted as the major backbone.
Soo asserted that KAYAK’s technology benefits from an on-going, cumulative scale advantage with more than 100M user queries per month.
“We obtain data from multiple sources and continually optimize our global flight search technology and data requirements. We currently utilize fare information from Amadeus, ITA, other 3rd-party providers, airlines and online travel agencies,” shared Soo. KAYAK also uses proprietary search algorithms including patent-pending accuracy technology for airline price and availability data. The team, according to Soo, is consistently trying to outperform other flight search sites and online travel agencies in speed, comprehensiveness, best price found and accuracy.
As for mobile, KAYAK believes it has edge over others, in line with its vision of being the best on whatever device people may want to use.
“KAYAK’s mobile app features full search capabilities, a facilitated booking experience - a user never has to leave our app to book their travel, as well as flight tracking and itinerary management tools. KAYAK’s app features a full set of capabilities as well as an intuitive, fast and accurate UI,” said Soo.
Soo believes the market is challenging on a few counts. One of them is handling the issue of multiple price points. “It isn’t easy to make apples-to-apples comparisons here. What is available online might differ on various channels, and the same is the case with OTA and offline agencies. For us, online-offline discrepancy doesn’t matter, but we can’t afford to slip up in online pricing,” said Soo. So there is going to be a team that would specifically assess the accuracy to pave way for return users.
KAYAK believes its arsenal of tools will enable the company to combat such hurdles.
“A major development that we are seeing in the travel search market is the need for price transparency. Many OTAs, airlines and hotels charge users booking, taxes and baggage or credit card fees. These fees are often not included in the price that is shown to the user,” said Soo.
Citing an example, she added that the way the site displays information in Europe is quite different from what’s done the U. S. In fact, it was in response to this issue (price transparency) that paved the way for the creation of the Payment Fee Calculator, a feature that shows users exactly what they will pay for a flight or hotel room. “This feature was initially rolled out in Europe, where extra fees arethe industry norm, and we received such positive user feedback, that we have rolled out this feature across all of our markets,” said Soo.
Future of meta-search
Is KAYAK open to embracinga hybrid model i. e. transaction-oriented plus traffic generation?
Not for the moment, though nothing can be ruled out, said Soo.
“KAYAK’s value proposition for our partners is that we send extremely qualified, and high-converting traffic to our partners, and that our partners still “own” the customer because the customer books on their site,” said Soo.
She added, “Our focus for local suppliers and OTAs in China will likely not deviate from our current value proposition for existing global partners.”
No doubt meta-search sites are all about monetising the traffic they generate. So is there any benchmark that KAYAK has set for the traffic that it intends to generate here?
“We have a general sense of the level of traffic and how that traffic will monetize, but until we are live in a market, we really don’t know for sure what the numbers will be. As for cost per acquisition in our marketing efforts, one way we could determine the appropriate cost is to look at the cost per acquisition in some of our more mature markets that have similar market dynamics to the market in question,” said Soo.
Expectations from 2014TravelDaily Conference
Soo said KAYAK is considering launching in China. So the 2014TravelDaily Conference would be an ideal event. “The TravelDaily event is a widely attended and highly reputable conference. I am looking forward to sharing KAYAK’s global expansion plansand meeting and learning about new potential partners. I am also excited to learn more about the complexities of the online travel landscape in China,” said Soo.