WEBVTT - Businessweek Talks- Kayak CEO Steve Hafner 0:00:00.480 --> 0:00:04.080 You're listening to Bloomberg Business Week with Carol Masser and 0:00:04.200 --> 0:00:08.639 Jason Kelly on Bloomberg Radio. All right, Well, we've been 0:00:08.680 --> 0:00:12.440 looking forward to this conversation in part because this next 0:00:12.480 --> 0:00:14.720 guest is going to tell us what we need to 0:00:14.760 --> 0:00:19.040 know about two things we love, food and travel, to 0:00:19.320 --> 0:00:23.079 industries that, unfortunately you have been incredibly hard hit, uh 0:00:23.079 --> 0:00:26.400 in this crisis. Steve Hafner joins this, co founder, CEO 0:00:26.560 --> 0:00:29.319 of Kayak and the CEO of Open Table. He's on 0:00:29.360 --> 0:00:32.199 the phone from Bridge Hampton, New York. Steve, really nice 0:00:32.240 --> 0:00:35.159 to have you with Carolin, myself, Jason Carroll, thanks for 0:00:35.159 --> 0:00:38.040 having me on, Steve. Al right, so let's start with 0:00:38.080 --> 0:00:42.239 travel if we can. Uh. You know, we've all been grounded. 0:00:42.240 --> 0:00:44.280 I think Carol and I both are used to sort 0:00:44.280 --> 0:00:46.599 of being out there doing reporting, doing remotes and all 0:00:46.600 --> 0:00:50.080 those different things. We've been grounded since February. How does 0:00:50.240 --> 0:00:54.040 how and when does travel come back? Here? Sure? So 0:00:54.480 --> 0:00:57.960 yesterday we published data on Kayak from about a billion 0:00:58.040 --> 0:01:00.920 consumer queries, and it's actually showing you that there is 0:01:01.200 --> 0:01:06.200 some recovery in travel interest. So the bottom period for 0:01:06.200 --> 0:01:08.520 for what we've seen the query volume was happened in 0:01:08.880 --> 0:01:12.120 April seven when queries fell eight year of a year, 0:01:12.520 --> 0:01:15.000 and since then they've been gradually recovering. So yesterday, if 0:01:15.000 --> 0:01:17.800 you look at the data, query volume was only down 0:01:18.720 --> 0:01:21.360 versus the previous year. So there there is a long 0:01:21.360 --> 0:01:23.880 way to go to be sure, but consumers at least 0:01:23.880 --> 0:01:26.520 are thinking about flying again and they're looking for trips. 0:01:27.360 --> 0:01:30.640 So tell us about you know, okay, so some I 0:01:30.680 --> 0:01:33.199 mean percentage wise, can you give us an idea because 0:01:33.240 --> 0:01:35.320 I know, you know, we keep talking about these numbers 0:01:35.319 --> 0:01:38.200 and they're coming off of such significant loads. I mean, 0:01:38.520 --> 0:01:42.680 it's still way down, correct, It's still way down. So yeah, 0:01:42.800 --> 0:01:44.959 last year there was twice as many people looking for 0:01:44.959 --> 0:01:47.960 flights on kayak and there are uh this year as 0:01:48.000 --> 0:01:51.800 of yesterday. But that's that's come up from down the 0:01:51.840 --> 0:01:53.840 first week of April, so it is a recovery. And 0:01:53.840 --> 0:01:56.880 remember this is search data, this isn't actually booking data. 0:01:57.120 --> 0:02:00.240 So this just means that people are thinking about traveling again, right, 0:02:00.760 --> 0:02:04.280 And I know that that is largely based on consumers. 0:02:04.320 --> 0:02:06.960 Talk to us about corporate travel because I think we're 0:02:06.960 --> 0:02:09.079 all trying to figure that out, not just again from 0:02:09.080 --> 0:02:12.600 a personal perspective, from our own work, but you know, 0:02:12.600 --> 0:02:16.440 knowing and talking to a lot of other CEOs about 0:02:16.480 --> 0:02:19.679 the decisions they're making in terms of, you know, maybe 0:02:19.720 --> 0:02:22.120 we should video con maybe we don't need to take 0:02:22.160 --> 0:02:25.640 quite as many trips. What's your read on that? Uh, 0:02:25.680 --> 0:02:27.720 you know, I share those sentiments. You know you're talking 0:02:27.720 --> 0:02:30.960 to somebody used to travel on a plane almost every day. 0:02:31.200 --> 0:02:34.000 So it's been amazing boon to productivity not to have 0:02:34.080 --> 0:02:36.480 to do that. And I think, um, you know this 0:02:36.480 --> 0:02:40.160 this pandemics, you know, one of the few bright spots 0:02:40.200 --> 0:02:43.600 is it's taught people how to conduct their affairs uh 0:02:43.800 --> 0:02:48.480 somewhat efficiently online. So typically, in past recessions and we're 0:02:48.480 --> 0:02:50.760 in one right now, business travel is one of the 0:02:50.840 --> 0:02:54.520 last things to return because companies are are really suffering, right, 0:02:54.520 --> 0:02:57.760 So consumers still want to travel, but consumers, but consumers 0:02:57.840 --> 0:02:59.639 may have may be able to afford that in a 0:02:59.680 --> 0:03:03.680 way that the business um can't. So typically business is 0:03:03.680 --> 0:03:05.600 the last thing recover. I think it's gonna we're gonna 0:03:05.600 --> 0:03:08.200 see more the same now, and it may never fully 0:03:08.200 --> 0:03:11.320 recover back to the levels that it once was because 0:03:11.360 --> 0:03:14.440 people have learned to adapt. Wow, so we may never 0:03:14.440 --> 0:03:18.120 see twenty nineteen levels again. That's right, And that and 0:03:18.160 --> 0:03:21.799 that has UM. I mean, we're preparing to see levels 0:03:21.800 --> 0:03:25.320 back in terms of total travel demand by about three 0:03:25.720 --> 0:03:28.040 that's kind of how we've structured our cost in our 0:03:28.040 --> 0:03:32.400 balance sheet. UM. But I think how people are traveling 0:03:32.400 --> 0:03:34.120 and what they're thinking about and how often they're going 0:03:34.200 --> 0:03:37.760 to travel are different and as a big implications for 0:03:37.840 --> 0:03:40.880 how airlines do their schedules, because you've got to remember 0:03:40.880 --> 0:03:44.560 that the business traveler usually is paying half the revenue 0:03:44.640 --> 0:03:46.560 on one of those flights. So I think they will 0:03:46.600 --> 0:03:48.440 see the frequency of trips go down, and I think 0:03:48.440 --> 0:03:51.320 you'll see average fairs go up to as business travels 0:03:51.320 --> 0:03:55.480 no longer subsidize you know, the consumers of leisure travel. Wow, 0:03:55.520 --> 0:03:58.200 that's fascinating and that's pretty significant. So what about on 0:03:58.240 --> 0:04:00.240 the open table side, what are you seeing in terms 0:04:00.240 --> 0:04:04.000 of restaurants. We're seeing recovery and restaurants as well. So 0:04:04.120 --> 0:04:06.560 people want to travel and they also want to dine out, 0:04:06.600 --> 0:04:09.000 and we're seeing a stronger recovery on on the restaurant 0:04:09.040 --> 0:04:11.080 side of the business half of you know, we've got 0:04:11.080 --> 0:04:14.280 about sixty thou restaurants UM on the Open table platform, 0:04:14.520 --> 0:04:17.599 about half of them have reopened, which is great and 0:04:17.640 --> 0:04:20.839 in terms of seated diners. Um, we we capture that 0:04:20.880 --> 0:04:23.200 data and we make it publicly available as well. Um, 0:04:23.320 --> 0:04:27.080 that was down only about seventy yesterday, So so people 0:04:27.120 --> 0:04:30.000 are going out and seventy percent sounds like a big reduction, 0:04:30.360 --> 0:04:33.880 but you have to remember that because of COVID nineteam restrictions, 0:04:34.160 --> 0:04:37.640 most restaurants aren't operating at full capacity. A lot of 0:04:37.640 --> 0:04:40.240 them are only outdoor only where they have set up 0:04:40.279 --> 0:04:42.840 tents outside or that even that they have to have 0:04:42.880 --> 0:04:45.400 their tables space six ft apart. So a lot of 0:04:45.440 --> 0:04:48.520 them are you know, fifteen to twenty percent capacity, and 0:04:48.800 --> 0:04:52.000 you know they're they're they're selling every seat they can 0:04:52.279 --> 0:04:54.520 and every table they can, which is great news. It's 0:04:54.560 --> 0:04:57.360 not enough to keep them in business, find you. But 0:04:57.360 --> 0:04:59.000 but it does show that consumers want to get out 0:04:59.000 --> 0:05:01.640 of their houses well. And and to that point, I mean, 0:05:01.720 --> 0:05:04.960 I believe you guys had forecast and I think others 0:05:05.000 --> 0:05:08.040 have followed you in this regard that we could see 0:05:08.080 --> 0:05:11.160 a quarter of restaurants across the country go out of business. 0:05:11.240 --> 0:05:14.320 Does that still feel about right or what are you 0:05:14.320 --> 0:05:18.720 guys thinking? Now? That's that's still our best guests? You know, 0:05:19.279 --> 0:05:21.440 restaurants are tough business. They go out of business all 0:05:21.440 --> 0:05:23.440 the time, as as you well know. But usually what 0:05:23.720 --> 0:05:25.920 location goes under it's because the concept was bad, what 0:05:26.040 --> 0:05:28.719 the management was bad, and a new restaurant takes his place. 0:05:29.080 --> 0:05:31.040 That's not what we're expecting now. So when we talk 0:05:31.080 --> 0:05:35.200 about restaurants going out of business, that means the location 0:05:35.240 --> 0:05:38.440 shutters permanently and becomes something else. And you know, it 0:05:38.680 --> 0:05:43.080 all depends on what happens with COVID nineteen and the restrictions, right, 0:05:43.120 --> 0:05:46.960 so can we safely dine out again indoors? Will employees 0:05:47.000 --> 0:05:50.240 come back and start working in restaurants again versus collecting 0:05:50.240 --> 0:05:53.560 benefits were doing other types of work. So you know, well, 0:05:53.800 --> 0:05:56.960 we'll see what happens. But that's that's our prediction. Hey, Steve, 0:05:57.040 --> 0:05:59.080 thirty seconds and then we're gonna do some news and 0:05:59.120 --> 0:06:00.440 come back. But I just do when do you just 0:06:00.480 --> 0:06:04.520 talked about workers? Are some restaurants Are they having any 0:06:04.560 --> 0:06:08.720 trouble finding staff and getting workers to come back? Absolutely 0:06:08.760 --> 0:06:10.680 they are, and and a lot of restaurant tours have 0:06:10.680 --> 0:06:13.400 been very vocal about that. So you know, the benefit 0:06:13.440 --> 0:06:16.120 package that was passed by the government was very generous, 0:06:16.400 --> 0:06:18.960 and I applaud the government for doing that, and you know, 0:06:19.040 --> 0:06:22.000 unwanted by product of that is some people are making 0:06:22.040 --> 0:06:24.599 more money by staying home than than by working to 0:06:24.680 --> 0:06:28.040 clean the restaurant business. So you know, I'm friends with 0:06:28.080 --> 0:06:29.919 a lot of restaurant tours here in Bridge Hampon and 0:06:29.920 --> 0:06:34.359 they're having a tough time even with being really able 0:06:34.360 --> 0:06:37.680 to reopen and actually finding staff to work. Still with 0:06:37.800 --> 0:06:40.320 us as Kayak an Open Table CEO Steve half Now. 0:06:40.440 --> 0:06:42.760 Steve is also co founder of Kayak, and he joins 0:06:42.839 --> 0:06:46.359 us on the phone from Bridge Hampton, New York. So, Steve, 0:06:46.400 --> 0:06:48.719 what are the things that we've loved talking with about 0:06:48.800 --> 0:06:52.640 leaders at companies right now? Is how the pandemic ultimately 0:06:52.680 --> 0:06:55.760 has changed any of your long term strategic planning for 0:06:55.800 --> 0:07:00.760 your businesses, um, So talk to us about that, sure, 0:07:00.920 --> 0:07:04.400 I mean, I think besides the immediate business impact and 0:07:04.400 --> 0:07:05.920 having to scramble to make sure that we are a 0:07:06.080 --> 0:07:08.520 viable entity and to get our users home and take 0:07:08.560 --> 0:07:11.320 care of our customers, we actually double down on a 0:07:11.320 --> 0:07:14.679 lot of our products initiatives. So you know, having business 0:07:14.880 --> 0:07:17.600 be where it is, which is dramatically decrease, has actually 0:07:17.600 --> 0:07:21.040 freed our development team to accelerate a lot of projects 0:07:21.120 --> 0:07:23.120 and you know. One of the things we've also seen 0:07:23.360 --> 0:07:26.920 is with fear of the virus comes changing consumer and 0:07:27.040 --> 0:07:31.120 business habits, so people are much more interested in, you know, 0:07:31.160 --> 0:07:33.320 on the restaurant side, for example, how to see your 0:07:33.360 --> 0:07:35.520 menu from your app, how to order from your app, 0:07:35.560 --> 0:07:38.360 how to pay from your app, um you know, how 0:07:38.360 --> 0:07:41.080 to bypass a hostess stand and pick your own table 0:07:41.120 --> 0:07:43.720 to sit at, so we actually see you know. One 0:07:43.720 --> 0:07:45.880 of the silver linings of the of the pandemic is 0:07:46.320 --> 0:07:49.160 a lot of innovation on both the dining and travel 0:07:49.160 --> 0:07:51.920 side of the business. So you know, Kayak soon it's 0:07:51.920 --> 0:07:54.520 going to launch a road trip components so people can 0:07:54.520 --> 0:07:58.280 see cool places go to nearby. And our rental card 0:07:58.280 --> 0:08:00.120 business and I never thought i'd say that, So our 0:08:00.160 --> 0:08:03.119 rel card business is actually bigger than our flight business today. Wow. 0:08:04.160 --> 0:08:06.120 So there's a lot of changes going on in in 0:08:06.400 --> 0:08:10.720 consumer habits and in business habits. So Open Table, for example, 0:08:11.120 --> 0:08:14.800 historically we've only been a table management system for restaurants, 0:08:14.840 --> 0:08:18.440 but now we've modified the software so grocery stores can 0:08:18.480 --> 0:08:22.520 actually accept reservations and use our our software. Soil can bars, 0:08:22.680 --> 0:08:26.200 soil convineyards, and soon soil can university dining halls. So 0:08:26.280 --> 0:08:30.040 really cool stuff happening. Yeah, so as you look across 0:08:30.080 --> 0:08:32.440 the country, you know, Steve, and this is something we 0:08:32.440 --> 0:08:35.319 are wrestling with literally every day, and and every time 0:08:35.320 --> 0:08:37.440 we talked to somebody who's not in the Tri State 0:08:37.520 --> 0:08:40.640 area physically, we're asking them, what's it like in Dallas, 0:08:40.640 --> 0:08:44.240 what's it like in Chicago, what's it like in Iowa. UM, 0:08:44.360 --> 0:08:47.720 you have the data that really gives you that those insights. 0:08:47.760 --> 0:08:51.040 As you look across the country, how does the US 0:08:51.120 --> 0:08:57.480 economy feel? You know, it's it's almost directly correlated with 0:08:57.600 --> 0:09:00.680 the amount of COVID impact. And you look ation and 0:09:00.720 --> 0:09:06.280 the resulting restrictions. So as researchers loosen up, business activity 0:09:06.559 --> 0:09:09.920 rapidly recovers. And on the travel side, people go to 0:09:10.000 --> 0:09:12.720 those places. So you know, if if you look at 0:09:12.720 --> 0:09:16.120 our travel satistics, UM, the top five places people are 0:09:16.120 --> 0:09:18.880 going to are in traditional destinations like New York, Paris, 0:09:18.960 --> 0:09:21.720 and London. There are actually places you can go to 0:09:21.760 --> 0:09:24.680 that our outdoors and you can do things like go 0:09:24.760 --> 0:09:26.800 to restaurants. So three of our top five cities right 0:09:26.800 --> 0:09:29.199 now are in Florida. The other two are in Puerto 0:09:29.280 --> 0:09:32.920 Rico and Dominican Republic, which just opened back up so 0:09:33.000 --> 0:09:35.040 you know, people want to travel, and when they do 0:09:35.160 --> 0:09:39.120 travel shorter flights nearby and places where they can actually 0:09:39.160 --> 0:09:42.360 go out to do stuff. Yeah, the outdoor venues that 0:09:42.480 --> 0:09:45.120 it seems like are really going to benefit, certainly for 0:09:45.120 --> 0:09:46.840 the next few months, certainly are a comfort level I 0:09:46.880 --> 0:09:50.200 know on on our side. UM, you know it's interesting too. 0:09:50.280 --> 0:09:53.160 I'm curious as you've gone through this process, what's the 0:09:53.280 --> 0:10:00.680 best advice you've gotten from someone during the pandemic, personal 0:10:00.760 --> 0:10:07.360 or professional? Well, first of those sides to stay home, 0:10:07.400 --> 0:10:10.000 and I think that served everyone pretty well. You know. 0:10:10.000 --> 0:10:12.960 On the professional side, you know, we've we've always operated 0:10:13.040 --> 0:10:17.520 Kayak and Open Table for sustainable, long term growth and um, 0:10:17.559 --> 0:10:19.720 you know, we haven't gotten over our skis on spending 0:10:19.840 --> 0:10:22.280 or anything like that, and we've played close attention to 0:10:22.280 --> 0:10:25.240 our users and our team members and that served us 0:10:25.360 --> 0:10:27.520 very well. So unlike a lot of other companies that 0:10:27.559 --> 0:10:31.960 were losing money going into this, we were making money. Um, 0:10:32.080 --> 0:10:34.400 and we trimmed our expenses to ensure that, you know, 0:10:34.400 --> 0:10:37.640 when travel rebounds were prepared. But you know, I love 0:10:37.679 --> 0:10:39.440 the fact that we didn't have to scramble, we didn't 0:10:39.480 --> 0:10:42.520 have to take um big changes to our operating models. 0:10:42.960 --> 0:10:45.000 We were able to cut our fees and waive them 0:10:45.000 --> 0:10:48.360 for restaurants to help, you know, them struggle with their businesses. 0:10:48.840 --> 0:10:52.360 So I think the the best of us I got 0:10:52.480 --> 0:10:56.240 professionally would be prepared, even in the good day, good times, 0:10:56.440 --> 0:11:00.000 for bad times ahead, and that served us very well. So, Steve, 0:10:59.840 --> 0:11:02.400 you mentioned earlier in the conversation that you know, you 0:11:02.400 --> 0:11:05.320 were on a plane practically every day in normal times. 0:11:05.520 --> 0:11:08.600 I'm sure you've been some incredible places. What do you 0:11:08.640 --> 0:11:10.840 sort of what what's the sort of place that's kind 0:11:10.840 --> 0:11:13.200 of out there in your mind of when everything is 0:11:13.400 --> 0:11:17.440 normal enough you want to go back to. You know, 0:11:17.559 --> 0:11:20.080 typically I spend a month a year in Sweden and 0:11:20.120 --> 0:11:23.080 my mom, who's any one lives there. I can't wait 0:11:23.120 --> 0:11:25.040 to go back to to Stockholm. It's one of the 0:11:25.040 --> 0:11:27.080 world's best places. And I really want to see my 0:11:27.120 --> 0:11:29.040 mom right right now. She doesn't even want to see 0:11:29.040 --> 0:11:33.600 me because she's afraid I'm gonna her um. But you know, 0:11:33.679 --> 0:11:36.080 that's that's where I really like to be. And by 0:11:36.120 --> 0:11:38.560 the way, I was just in Miami on on Saturday, 0:11:38.600 --> 0:11:40.560 so I do know would like to travel right now, 0:11:40.559 --> 0:11:43.480 and it's it's a plane trip is totally different now 0:11:43.520 --> 0:11:46.160 than it was before the pandemic. You know, the tone 0:11:46.160 --> 0:11:49.400 in the airport, at the traffic levels, the safety protocols 0:11:49.440 --> 0:11:50.920 as you bore the plane and as you're on the 0:11:50.920 --> 0:11:53.680 plane are very different with the mass and and you know, 0:11:53.800 --> 0:11:56.120 just goodie bags, no no meal service or drink service. 0:11:56.400 --> 0:11:58.280 But I'll tell you once you get to that defination, 0:11:58.280 --> 0:12:01.800 you're really happier there. Yeah. Interesting. Alright, Well, we look 0:12:01.840 --> 0:12:05.240 forward to catching up with you as we get more 0:12:05.280 --> 0:12:08.640 into whatever the next normal looks like. Steve Hafn really 0:12:08.640 --> 0:12:12.240 appreciate your candid insights. And you know at Bloomberg we 0:12:12.320 --> 0:12:14.439 love data and so to talk to someone else to 0:12:15.200 --> 0:12:18.160 data is really great. Steve Hafner is the co founder, 0:12:18.280 --> 0:12:20.800 CEO of Kayak and the CEO of Open Table. He 0:12:20.880 --> 0:12:23.560 joined us on the phone from Bridge Hampton, New York. 0:12:23.760 --> 0:12:26.440 Here's hoping for his sake and his mom's sake that 0:12:26.840 --> 0:12:28.760 he gets to Sweden before too long. That was very 0:12:28.800 --> 0:12:30.800 sweet and interesting to hear. You know, he was on 0:12:30.840 --> 0:12:33.400 a plane. It's different, but you know, people are going 0:12:33.440 --> 0:12:36.240 to make their way back ultimately, so we'll see more 0:12:36.280 --> 0:12:36.480 of that.