The Sensible Traveler

Selling travel . . . sort of

In the drive to be the Internet's one-stop shop for travel, search engines are vying to become the vehicle of choice.

These search engines are not all-purpose ones like Google or Yahoo, but travel search engines with names like Sidestep, Mobissimo, QIXO, and the latest, Kayak.

They don't actually sell travel, but instead turn a profit through referral fees when a user clicks through to a site that actually sells the airplane seat, hotel room, or rental car. The travel search engines scour, or scrape, dozens of Internet sites at once, searching for any offering that fits the user's search parameters.

''What's happening now is search engines and online travel are converging," said Steve Hafner, cofounder and chief executive officer of Kayak and former executive vice president at Orbitz, another online travel agency.

Hafner, in a briefing for reporters, said online travel is a $55 billion market and growing fast. He said his research indicates 6 percent of travelers booked online five years ago, while today that number is approaching 30 percent.

Still, Hafner said, surveys indicate many online travel shoppers are frustrated with their inability to find what they want on one website. Nearly 7 out of every 10, he said, shop around, visiting more than one site each time they make a travel purchase.

At Orbitz, for example, a search of air fares doesn't include two of the most popular discount airlines, Southwest Airlines and JetBlue Airways. To find out what those airlines offer, you have to go directly to their sites.

Travel search engines are trying to let customers search all the travel sites at once. Hafner said the goal is to present results in an objective way and let the customer decide which option to choose.

''We're a search engine," Hafner said. ''We don't care what you buy or where you buy it."

Hafner said search engines also have an economic advantage over their travel agent competitors. For an airline selling two seats, he said, the referral cost would be about $2.50 for a customer clicking through from That same customer booking through an online agency would cost the airline about $32 in commissions. For hotels, the price gap is much narrower, but still favors the search engine, Hafner said.

In demonstrating how Kayak works, officials at the company booked a room at a Hyatt in West Hollywood, Calif. The site indicated prices started at $175 a night at and $215 a night at Orbitz. Hafner said the difference in price was not unusual.

''For a lot of online agencies, buying a hotel room there is not the deal it once was," Hafner said. ''It pays to shop around."

With comments like that, it's no wonder the emerging search engines and the online travel agencies are not on the best of terms. Travelocity, for example, is currently not allowing Kayak to scrape its website, and other online travel agents may follow suit.

Some travel providers also are refusing to pay referral fees, which could threaten the search engine model. JetBlue, for example, has not yet agreed to pay Kayak referral fees, although Kayak officials say they are working on these types of agreements.

Kayak, which is still in the testing phase and will formally launch in the next few weeks, has many nice features. It lets you run a search and then modify it to find exactly what you want, adjusting the number of airlines, airports, stops, prices, and times to be considered. It also intends to provide multiple purchasing options, including online, by phone, and through a travel agent.

Hotel searches can be sorted by town and then by distance from a specific landmark. They also can be sorted by price and by star rating. Kayak includes hotel reviews from its users and scrapes reviews from other websites.

Sidestep, the most established travel search engine and the fifth-ranked player in terms of online travel, is gearing up to meet the challenge of new competitors by launching its own website. Currently, Sidestep is available only by downloading the search software to a browser, which allows the user to run a travel search on one website while simultaneously searching on Sidestep.

Phil Carpenter, vice president of corporate marketing at Sidestep, said no website can promise to deliver all travel options on every search, but he said Sidestep comes the closest. He said Kayak has a long way to go, noting its test site is actually searching very few hotel websites currently.

''At the moment, we have a real business and they don't," Carpenter said.

Bruce Mohl can be reached at

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