Summer travel deals scarce amid ‘very strong’ demand, says KAYAK CEO
KAYAK CEO Steve Hafner joins Yahoo Finance Live to discuss summer travel demand and expectations, as well as the outlook for travel deals.
– Memorial Day weekend travelers had a tough weekend with 5,000 flight delays, 500 cancellations just yesterday. The holidays that mark the unofficial start of the travel season give us a good idea of the strength of the hotel and airline sectors. Let’s get someone to read these gauges.
Kayak CEO Steve Hafner is here with us live. Steve, great to have you on the program. I wanted to ask you a fairly general question about the trends you were seeing. Again, it’s kind of a critical weekend to gauge travel demand during the summer season, what do the numbers look like from Kayak’s perspective?
STEVE HAFNER: Thanks for inviting me, Brian. It’s been an amazing start to the travel season. So on Memorial Day, if you went through an airport, which more than 13 million Americans did, that’s only a 7% drop from 2019. Historically, Memorial Day weekend is actually a road trip weekend. There are therefore many more people in traffic than in airports and on planes.
And if you look at Kayak’s research data for that, very robust travel demand. Our car rental inquiries have increased by 125% compared to 2019, so we are off to a very good start for the summer.
– Steve, it’s Akiko here. We’ve heard a lot about the huge spike in airline ticket prices. It doesn’t seem that if you look at the numbers that have necessarily affected travel plans at the moment. I mean, what does that tell you about summer demand ahead and whether you can sustain that kind of demand in the face of inflation?
STEVE HAFNER: Look, the demand is very, very strong. So if you look at Kayak’s data, again flights are up 16% for the summer compared to a few years ago, hotels up 50% and rental cars up 130%.
So people want to go out and travel. The downside, of course, is that the industry can’t add that level of supply. You can’t bring so many new plays, new cars, and new hotels.
So prices skyrocket. So airfares, for those of you who buy plane tickets, you’ve noticed that they’re about 45% higher than they were in 2019. Hotels, only 20%, even more expensive rental cars – over 70% more expensive than they were in 2019. So it’s going to be a tough environment for people hitting the road.
– At the same time, however, what we do know is that people want to hang out, don’t they? I mean, it’s 2022. People are still kind of eager to get out there and explore different places because they haven’t been able to for most of the pandemic.
Tell us about the traffic on your website that attracts potential travelers with trip ideas and then the routes through which they can actually book them. Do you see web traffic comparable to certain levels when vaccination campaigns were massive last year? What does he look like now?
STEVE HAFNER: It’s even better than last year. So the rebound is very strong, and it’s not just here at Kayak. I think everyone in the travel industry sees this, from airlines to hoteliers, et cetera.
So, you know, I think for people who travel, it’s a little harder or a lot harder to find deals, and deals are a relative term these days. So if you have flexibility on destinations and dates, you are better able to set a good price. If you want to use Kayak Price Alerts, we can notify you when prices drop.
But if you go there and are willing to head south, you can find some great deals. If you want to go to Europe compared to 2019, the dollar is around 50% stronger against the euro. We are almost head to head again. Europe is therefore a little on sale, if you will.
– It’s a good time to go shopping in Europe. Steve, what does this data tell you, though, about where exactly people are heading? Is it mostly domestic travel? Are these the usual international destinations like Europe? Where do you see the greatest demand?
STEVE HAFNER: It’s still domestic travel because unfortunately if you’re going to fly outside of the United States, you still have to wear a mask and you still have to get tested on the way there and back. And for a lot of people, that’s a problem. So they prefer to stay local.
If they’re traveling overseas, the two biggest markets we’re seeing right now are the furthest markets, so Mexico and Canada. So that’s where people seem to travel. Although Europe has always been very popular for summer, we are no longer at the levels we used to be in 2019.