Speaker 1: You're listening to Bloomberg Business Week with Carol Masser and
Speaker 1: Jason Kelly on Bloomberg Radio. All right, Well, we've been
Speaker 1: looking forward to this conversation in part because this next
Speaker 1: guest is going to tell us what we need to
Speaker 1: know about two things we love, food and travel, to
Speaker 1: industries that, unfortunately you have been incredibly hard hit, uh
Speaker 1: in this crisis. Steve Hafner joins this, co founder, CEO
Speaker 1: of Kayak and the CEO of Open Table. He's on
Speaker 1: the phone from Bridge Hampton, New York. Steve, really nice
Speaker 1: to have you with Carolin, myself, Jason Carroll, thanks for
Speaker 1: having me on, Steve. Al right, so let's start with
Speaker 1: travel if we can. Uh. You know, we've all been grounded.
Speaker 1: I think Carol and I both are used to sort
Speaker 1: of being out there doing reporting, doing remotes and all
Speaker 1: those different things. We've been grounded since February. How does
Speaker 1: how and when does travel come back? Here? Sure? So
Speaker 1: yesterday we published data on Kayak from about a billion
Speaker 1: consumer queries, and it's actually showing you that there is
Speaker 1: some recovery in travel interest. So the bottom period for
Speaker 1: for what we've seen the query volume was happened in
Speaker 1: April seven when queries fell eight year of a year,
Speaker 1: and since then they've been gradually recovering. So yesterday, if
Speaker 1: you look at the data, query volume was only down
Speaker 1: versus the previous year. So there there is a long
Speaker 1: way to go to be sure, but consumers at least
Speaker 1: are thinking about flying again and they're looking for trips.
Speaker 1: So tell us about you know, okay, so some I
Speaker 1: mean percentage wise, can you give us an idea because
Speaker 1: I know, you know, we keep talking about these numbers
Speaker 1: and they're coming off of such significant loads. I mean,
Speaker 1: it's still way down, correct, It's still way down. So yeah,
Speaker 1: last year there was twice as many people looking for
Speaker 1: flights on kayak and there are uh this year as
Speaker 1: of yesterday. But that's that's come up from down the
Speaker 1: first week of April, so it is a recovery. And
Speaker 1: remember this is search data, this isn't actually booking data.
Speaker 1: So this just means that people are thinking about traveling again, right,
Speaker 1: And I know that that is largely based on consumers.
Speaker 1: Talk to us about corporate travel because I think we're
Speaker 1: all trying to figure that out, not just again from
Speaker 1: a personal perspective, from our own work, but you know,
Speaker 1: knowing and talking to a lot of other CEOs about
Speaker 1: the decisions they're making in terms of, you know, maybe
Speaker 1: we should video con maybe we don't need to take
Speaker 1: quite as many trips. What's your read on that? Uh,
Speaker 1: you know, I share those sentiments. You know you're talking
Speaker 1: to somebody used to travel on a plane almost every day.
Speaker 1: So it's been amazing boon to productivity not to have
Speaker 1: to do that. And I think, um, you know this
Speaker 1: this pandemics, you know, one of the few bright spots
Speaker 1: is it's taught people how to conduct their affairs uh
Speaker 1: somewhat efficiently online. So typically, in past recessions and we're
Speaker 1: in one right now, business travel is one of the
Speaker 1: last things to return because companies are are really suffering, right,
Speaker 1: So consumers still want to travel, but consumers, but consumers
Speaker 1: may have may be able to afford that in a
Speaker 1: way that the business um can't. So typically business is
Speaker 1: the last thing recover. I think it's gonna we're gonna
Speaker 1: see more the same now, and it may never fully
Speaker 1: recover back to the levels that it once was because
Speaker 1: people have learned to adapt. Wow, so we may never
Speaker 1: see twenty nineteen levels again. That's right, And that and
Speaker 1: that has UM. I mean, we're preparing to see levels
Speaker 1: back in terms of total travel demand by about three
Speaker 1: that's kind of how we've structured our cost in our
Speaker 1: balance sheet. UM. But I think how people are traveling
Speaker 1: and what they're thinking about and how often they're going
Speaker 1: to travel are different and as a big implications for
Speaker 1: how airlines do their schedules, because you've got to remember
Speaker 1: that the business traveler usually is paying half the revenue
Speaker 1: on one of those flights. So I think they will
Speaker 1: see the frequency of trips go down, and I think
Speaker 1: you'll see average fairs go up to as business travels
Speaker 1: no longer subsidize you know, the consumers of leisure travel. Wow,
Speaker 1: that's fascinating and that's pretty significant. So what about on
Speaker 1: the open table side, what are you seeing in terms
Speaker 1: of restaurants. We're seeing recovery and restaurants as well. So
Speaker 1: people want to travel and they also want to dine out,
Speaker 1: and we're seeing a stronger recovery on on the restaurant
Speaker 1: side of the business half of you know, we've got
Speaker 1: about sixty thou restaurants UM on the Open table platform,
Speaker 1: about half of them have reopened, which is great and
Speaker 1: in terms of seated diners. Um, we we capture that
Speaker 1: data and we make it publicly available as well. Um,
Speaker 1: that was down only about seventy yesterday, So so people
Speaker 1: are going out and seventy percent sounds like a big reduction,
Speaker 1: but you have to remember that because of COVID nineteam restrictions,
Speaker 1: most restaurants aren't operating at full capacity. A lot of
Speaker 1: them are only outdoor only where they have set up
Speaker 1: tents outside or that even that they have to have
Speaker 1: their tables space six ft apart. So a lot of
Speaker 1: them are you know, fifteen to twenty percent capacity, and
Speaker 1: you know they're they're they're selling every seat they can
Speaker 1: and every table they can, which is great news. It's
Speaker 1: not enough to keep them in business, find you. But
Speaker 1: but it does show that consumers want to get out
Speaker 1: of their houses well. And and to that point, I mean,
Speaker 1: I believe you guys had forecast and I think others
Speaker 1: have followed you in this regard that we could see
Speaker 1: a quarter of restaurants across the country go out of business.
Speaker 1: Does that still feel about right or what are you
Speaker 1: guys thinking? Now? That's that's still our best guests? You know,
Speaker 1: restaurants are tough business. They go out of business all
Speaker 1: the time, as as you well know. But usually what
Speaker 1: location goes under it's because the concept was bad, what
Speaker 1: the management was bad, and a new restaurant takes his place.
Speaker 1: That's not what we're expecting now. So when we talk
Speaker 1: about restaurants going out of business, that means the location
Speaker 1: shutters permanently and becomes something else. And you know, it
Speaker 1: all depends on what happens with COVID nineteen and the restrictions, right,
Speaker 1: so can we safely dine out again indoors? Will employees
Speaker 1: come back and start working in restaurants again versus collecting
Speaker 1: benefits were doing other types of work. So you know, well,
Speaker 1: we'll see what happens. But that's that's our prediction. Hey, Steve,
Speaker 1: thirty seconds and then we're gonna do some news and
Speaker 1: come back. But I just do when do you just
Speaker 1: talked about workers? Are some restaurants Are they having any
Speaker 1: trouble finding staff and getting workers to come back? Absolutely
Speaker 1: they are, and and a lot of restaurant tours have
Speaker 1: been very vocal about that. So you know, the benefit
Speaker 1: package that was passed by the government was very generous,
Speaker 1: and I applaud the government for doing that, and you know,
Speaker 1: unwanted by product of that is some people are making
Speaker 1: more money by staying home than than by working to
Speaker 1: clean the restaurant business. So you know, I'm friends with
Speaker 1: a lot of restaurant tours here in Bridge Hampon and
Speaker 1: they're having a tough time even with being really able
Speaker 1: to reopen and actually finding staff to work. Still with
Speaker 1: us as Kayak an Open Table CEO Steve half Now.
Speaker 1: Steve is also co founder of Kayak, and he joins
Speaker 1: us on the phone from Bridge Hampton, New York. So, Steve,
Speaker 1: what are the things that we've loved talking with about
Speaker 1: leaders at companies right now? Is how the pandemic ultimately
Speaker 1: has changed any of your long term strategic planning for
Speaker 1: your businesses, um, So talk to us about that, sure,
Speaker 1: I mean, I think besides the immediate business impact and
Speaker 1: having to scramble to make sure that we are a
Speaker 1: viable entity and to get our users home and take
Speaker 1: care of our customers, we actually double down on a
Speaker 1: lot of our products initiatives. So you know, having business
Speaker 1: be where it is, which is dramatically decrease, has actually
Speaker 1: freed our development team to accelerate a lot of projects
Speaker 1: and you know. One of the things we've also seen
Speaker 1: is with fear of the virus comes changing consumer and
Speaker 1: business habits, so people are much more interested in, you know,
Speaker 1: on the restaurant side, for example, how to see your
Speaker 1: menu from your app, how to order from your app,
Speaker 1: how to pay from your app, um you know, how
Speaker 1: to bypass a hostess stand and pick your own table
Speaker 1: to sit at, so we actually see you know. One
Speaker 1: of the silver linings of the of the pandemic is
Speaker 1: a lot of innovation on both the dining and travel
Speaker 1: side of the business. So you know, Kayak soon it's
Speaker 1: going to launch a road trip components so people can
Speaker 1: see cool places go to nearby. And our rental card
Speaker 1: business and I never thought i'd say that, So our
Speaker 1: rel card business is actually bigger than our flight business today. Wow.
Speaker 1: So there's a lot of changes going on in in
Speaker 1: consumer habits and in business habits. So Open Table, for example,
Speaker 1: historically we've only been a table management system for restaurants,
Speaker 1: but now we've modified the software so grocery stores can
Speaker 1: actually accept reservations and use our our software. Soil can bars,
Speaker 1: soil convineyards, and soon soil can university dining halls. So
Speaker 1: really cool stuff happening. Yeah, so as you look across
Speaker 1: the country, you know, Steve, and this is something we
Speaker 1: are wrestling with literally every day, and and every time
Speaker 1: we talked to somebody who's not in the Tri State
Speaker 1: area physically, we're asking them, what's it like in Dallas,
Speaker 1: what's it like in Chicago, what's it like in Iowa. UM,
Speaker 1: you have the data that really gives you that those insights.
Speaker 1: As you look across the country, how does the US
Speaker 1: economy feel? You know, it's it's almost directly correlated with
Speaker 1: the amount of COVID impact. And you look ation and
Speaker 1: the resulting restrictions. So as researchers loosen up, business activity
Speaker 1: rapidly recovers. And on the travel side, people go to
Speaker 1: those places. So you know, if if you look at
Speaker 1: our travel satistics, UM, the top five places people are
Speaker 1: going to are in traditional destinations like New York, Paris,
Speaker 1: and London. There are actually places you can go to
Speaker 1: that our outdoors and you can do things like go
Speaker 1: to restaurants. So three of our top five cities right
Speaker 1: now are in Florida. The other two are in Puerto
Speaker 1: Rico and Dominican Republic, which just opened back up so
Speaker 1: you know, people want to travel, and when they do
Speaker 1: travel shorter flights nearby and places where they can actually
Speaker 1: go out to do stuff. Yeah, the outdoor venues that
Speaker 1: it seems like are really going to benefit, certainly for
Speaker 1: the next few months, certainly are a comfort level I
Speaker 1: know on on our side. UM, you know it's interesting too.
Speaker 1: I'm curious as you've gone through this process, what's the
Speaker 1: best advice you've gotten from someone during the pandemic, personal
Speaker 1: or professional? Well, first of those sides to stay home,
Speaker 1: and I think that served everyone pretty well. You know.
Speaker 1: On the professional side, you know, we've we've always operated
Speaker 1: Kayak and Open Table for sustainable, long term growth and um,
Speaker 1: you know, we haven't gotten over our skis on spending
Speaker 1: or anything like that, and we've played close attention to
Speaker 1: our users and our team members and that served us
Speaker 1: very well. So unlike a lot of other companies that
Speaker 1: were losing money going into this, we were making money. Um,
Speaker 1: and we trimmed our expenses to ensure that, you know,
Speaker 1: when travel rebounds were prepared. But you know, I love
Speaker 1: the fact that we didn't have to scramble, we didn't
Speaker 1: have to take um big changes to our operating models.
Speaker 1: We were able to cut our fees and waive them
Speaker 1: for restaurants to help, you know, them struggle with their businesses.
Speaker 1: So I think the the best of us I got
Speaker 1: professionally would be prepared, even in the good day, good times,
Speaker 1: for bad times ahead, and that served us very well. So, Steve,
Speaker 1: you mentioned earlier in the conversation that you know, you
Speaker 1: were on a plane practically every day in normal times.
Speaker 1: I'm sure you've been some incredible places. What do you
Speaker 1: sort of what what's the sort of place that's kind
Speaker 1: of out there in your mind of when everything is
Speaker 1: normal enough you want to go back to. You know,
Speaker 1: typically I spend a month a year in Sweden and
Speaker 1: my mom, who's any one lives there. I can't wait
Speaker 1: to go back to to Stockholm. It's one of the
Speaker 1: world's best places. And I really want to see my
Speaker 1: mom right right now. She doesn't even want to see
Speaker 1: me because she's afraid I'm gonna her um. But you know,
Speaker 1: that's that's where I really like to be. And by
Speaker 1: the way, I was just in Miami on on Saturday,
Speaker 1: so I do know would like to travel right now,
Speaker 1: and it's it's a plane trip is totally different now
Speaker 1: than it was before the pandemic. You know, the tone
Speaker 1: in the airport, at the traffic levels, the safety protocols
Speaker 1: as you bore the plane and as you're on the
Speaker 1: plane are very different with the mass and and you know,
Speaker 1: just goodie bags, no no meal service or drink service.
Speaker 1: But I'll tell you once you get to that defination,
Speaker 1: you're really happier there. Yeah. Interesting. Alright, Well, we look
Speaker 1: forward to catching up with you as we get more
Speaker 1: into whatever the next normal looks like. Steve Hafn really
Speaker 1: appreciate your candid insights. And you know at Bloomberg we
Speaker 1: love data and so to talk to someone else to
Speaker 1: data is really great. Steve Hafner is the co founder,
Speaker 1: CEO of Kayak and the CEO of Open Table. He
Speaker 1: joined us on the phone from Bridge Hampton, New York.
Speaker 1: Here's hoping for his sake and his mom's sake that
Speaker 1: he gets to Sweden before too long. That was very
Speaker 1: sweet and interesting to hear. You know, he was on
Speaker 1: a plane. It's different, but you know, people are going
Speaker 1: to make their way back ultimately, so we'll see more
Speaker 1: of that.