Speaker 1: It is the most wonderful time of the year because
Speaker 1: the holidays are here and we get some time off,
Speaker 1: have money, we'll travel, have time, will travel. But Katie,
Speaker 1: are there any travel deals to be had? It's a
Speaker 1: great question. Luckily, my husband has been booking everything, so
Speaker 1: I couldn't tell you. But but he'll know the answer
Speaker 1: to that. Yeah, we'll get him on here tomorrow. Okay. Well,
Speaker 1: in the meantime, let us check in with Steve Haffner,
Speaker 1: he is CEO of Kayak, to tell us what he
Speaker 1: sees out there. Steve, give us a read of what
Speaker 1: you're seeing. Are there a lot of people looking searching
Speaker 1: for last minute deals? Absolutely, travel interests, consumer travel interests
Speaker 1: and getting out in a way is stronger than ever
Speaker 1: so Kayak domestic queries up versus last year. International queries
Speaker 1: are up even more people, despite the headlines of macro trends,
Speaker 1: UH seemed very eager to get out in a way.
Speaker 1: And and that's reflecting in prices. By the way, the
Speaker 1: average domestic airfair is five dollars right now, and if
Speaker 1: you want to leave our borders, the average international affair
Speaker 1: is almost a thousand dollars. Well, we live in the macro,
Speaker 1: and all we talk about is inflation is a recession coming,
Speaker 1: And like you said, you're not really seeing that reflected.
Speaker 1: And I want to talk about the psychology of that.
Speaker 1: Is that revenge traveling? Is that just extreme pent up demand? Yeah,
Speaker 1: I mean we we're not seeing it yet. But what
Speaker 1: you have to remember what the travel business. We had
Speaker 1: two years of basically no travel, and that was all
Speaker 1: collapsed into six months of travel two And you know,
Speaker 1: I think I think most of the revenge travel is
Speaker 1: done by now. People are just remembering how great travel
Speaker 1: is and they're looking forward toward the next trip. So
Speaker 1: I think that's what's going on. I suspect prices will
Speaker 1: stabilize a little bit going into at least I hope
Speaker 1: they do. But we we don't see any slowdown in
Speaker 1: consumer interests and travel. I want to pick up on
Speaker 1: something you mentioned, which is, uh, international flight searches are
Speaker 1: up sixty percent year on year. How much of that
Speaker 1: do you think is due to the strong dollar and
Speaker 1: people realizing that if they go somewhere else they can
Speaker 1: take advantage of their dollar because at home, and I mean,
Speaker 1: obviously this is a case globally inflation is is such
Speaker 1: a scourge and it's really limiting what we can spend
Speaker 1: out there. But if you go to Europe, then you
Speaker 1: know there's a discount. If you go to Japan, there's
Speaker 1: a discount. And it if you're going to spend the
Speaker 1: time and the money to take a break and go somewhere,
Speaker 1: better to go somewhere where your dollar gets you further.
Speaker 1: It definitely goes a lot further abroad than it usually does,
Speaker 1: especially in Europe. But the problem is you still got
Speaker 1: to get there first, and you know, international air Force,
Speaker 1: like I mentioned, are almost a thousand dollars round trip
Speaker 1: and economy to get there, so it's still very expensive.
Speaker 1: I will say that the most the highest trending destinations
Speaker 1: aren't in Europe. They're actually in an Asia Pacific because
Speaker 1: you've got a bunch of countries there that have been
Speaker 1: closed for the last two to three years. So I'm
Speaker 1: talking about Vietnam is the top of our list, Australia,
Speaker 1: Thailand even so, I know that during the pandemic and
Speaker 1: right afterwards, are a lot of flights that were cut
Speaker 1: and so the supply of these flights were limited. Have
Speaker 1: we seen supply come back up to meet that increased demand?
Speaker 1: It's coming back, but it's it's still below where it
Speaker 1: wasn't two thousand nine. So if you look at t
Speaker 1: s a passenger accounts, now we're almost back to two levels,
Speaker 1: which is pretty impressive because the airlines themselves have about
Speaker 1: eight percent fewer seats to fly, so you know, if
Speaker 1: you're if you've been flying, you will notice the planes
Speaker 1: are full. And that's also what's being reflected in the
Speaker 1: air fares. And I know we're talking about holiday travel
Speaker 1: and the fun type of travel, but let's talk about
Speaker 1: um business travel for a little bit. Are we seeing
Speaker 1: any sort of rebound there? Business travel is definitely back,
Speaker 1: not in terms of total passenger a count, but in
Speaker 1: terms of revenue because of these average fairs. What's different
Speaker 1: about it though versus pre pandemic is, uh, the day trip.
Speaker 1: The whole notion of flying somewhere to see a client
Speaker 1: and being home in your own bed at night is
Speaker 1: essentially gone, so just way to convenient for that. Plus
Speaker 1: a lot of companies allow their employees attack on a
Speaker 1: day or two on either side, so what we're seeing
Speaker 1: is a lot more to the three day trips than
Speaker 1: than single day trips. And then the second trend that's
Speaker 1: a little bit uh different these days with business travel
Speaker 1: is it's not all about visiting clients. Now. A lot
Speaker 1: of companies are trying to get their employees together, so
Speaker 1: we're seeing a lot more off sites and fun destinations.
Speaker 1: So that must mean that the kinds of um flight
Speaker 1: routes that companies are the airlines are offering has to
Speaker 1: reflect that perhaps we are not flying into San Francisco
Speaker 1: anymore to this savent step because they can zoom. Certainly,
Speaker 1: we know that all these people who are in the
Speaker 1: Bay Area are working from home, so that they're fine
Speaker 1: with doing that technology and meeting that way. But if
Speaker 1: companies are sponsoring their employees to go on an off site,
Speaker 1: it might be to New Mexico as opposed to San Francisco.
Speaker 1: That's right. So the last three Kayak oup sites, for example,
Speaker 1: have been in Dubai, in Mexico and in Iceland. I
Speaker 1: want to work at Kayak. That sounds great. Let's talk, though,
Speaker 1: I mean I'm still stuck on the macro since that's
Speaker 1: all we do at Bloomberg. And you do write in
Speaker 1: your notes, uh that if you look at domestic flight searches,
Speaker 1: prices are up fifty two percent internationally prices up twenty
Speaker 1: nine percent, and obviously the consumer is resilient. We're seeing
Speaker 1: that in all parts of the economy. But at what
Speaker 1: point if you look at past inflationary periods, and to
Speaker 1: be fair, there haven't been a ton of them in
Speaker 1: the past two decades or so, But at what point
Speaker 1: do we start to see maybe a little bit of
Speaker 1: that demand destruction in the face of higher prices. Well, look,
Speaker 1: I I would hope demand softens a bit, because that
Speaker 1: will absolutely put a little bit more downward pressure on
Speaker 1: on prices. But I think it's actually input costs that
Speaker 1: need to soften first. So fuel it's a big, big
Speaker 1: cost center for the airlines. That's got to come down.
Speaker 1: Staffing costs has gotta come down, and then we you know,
Speaker 1: the big airlines have ordered much more fuel efficient planes.
Speaker 1: So if United you can get its hands on, you know,
Speaker 1: a hundred more Dreamline ears from Boeing, that will help
Speaker 1: a lot with their their actual unit economics. Is there
Speaker 1: going to be a quiet period, a lull um in
Speaker 1: terms of travel coming up anytime soon? Or has our
Speaker 1: post COVID travel habits changed? All of that changed what
Speaker 1: we're familiar with, where you know, maybe mid January is
Speaker 1: a really quiet period, but that that's no longer the case.
Speaker 1: I don't Yeah, we haven't seen that in the numbers,
Speaker 1: so it used to be historically you see these peaks
Speaker 1: and valleys, and but what the airlines would trying to
Speaker 1: do is cut airfares to maintain occupancy on their planes,
Speaker 1: and hotels who do the same thing with their rates.
Speaker 1: But we're seeing no evidence of any price softness, which
Speaker 1: tells you that demand is is still pretty strong throughout
Speaker 1: all these periods. And I think the pandemic gave consumers
Speaker 1: a lot of flexibility, particularly someone so you don't have
Speaker 1: to go into the office every day, as you mentioned
Speaker 1: in San Francisco in particular, So that that means that
Speaker 1: they're exercising the desire to fly in a typical pit
Speaker 1: time periods. And I think that's that's good for the industry,
Speaker 1: and that's actually good for consumers too. And let's unpack
Speaker 1: some of this demand. Where are people actually looking to go,
Speaker 1: especially on an international level, where are they trying to
Speaker 1: fly to. It's the usual suspects, you know, the big cities,
Speaker 1: so Paris, London, etcetera. In Europe, and then as I mentioned,
Speaker 1: a pack is a is a big draw in terms
Speaker 1: of being trendy right now because you know, you're average
Speaker 1: American hasn't been to Australian three years, right because you
Speaker 1: had a quardantinae when you got there for extended period
Speaker 1: time at your cost. So for for those folks who
Speaker 1: have connections in a pack in Japan or in Thailand, etcetera,
Speaker 1: now is the time to go, and they're voting with
Speaker 1: their feet. Steve, is there anything you're excited about when
Speaker 1: it comes to innovation and travel, something that you're looking
Speaker 1: ahead to that could really change how these companies are
Speaker 1: responding to this increased demand? Absolutely. Look at Kayak, we've
Speaker 1: been innovating the space where it was it was twenty years.
Speaker 1: So the thing that I'm really interested in these days
Speaker 1: is how can we make the security line and the
Speaker 1: check in much more efficient than it is today because
Speaker 1: we simply don't have the staff and the human resources
Speaker 1: to handle the volume of consumers coming through airports right
Speaker 1: now and onto planes. So you would hope that identity
Speaker 1: facial recognition can can make the whole process a lot
Speaker 1: more efficient, and I think that's that's coming. So if
Speaker 1: you've ever had the experience of boarding a delta flight internationally,
Speaker 1: but they just scan your face when you board. It's
Speaker 1: pretty darn cool and also very very efficient. See kind
Speaker 1: of scary. That is scary. I don't want to think
Speaker 1: about that one too deeply. But Steve twenty seconds, are
Speaker 1: you traveling this holiday? I am not. I actually live
Speaker 1: in Miami and up in Stanford for the for the
Speaker 1: cold weather for the next three weeks, and then you know,
Speaker 1: once the dust settles on January and the rear view mirror,
Speaker 1: then I'll go down the same parts, all right. So
Speaker 1: I think you're the opposite of the snowbird if you're
Speaker 1: traveling from Florida to the snowy place. Really interesting to
Speaker 1: get some time with you, That is Steve Haffner. He
Speaker 1: is co founder and CEO of Kayak. He joins us
Speaker 1: on Zoom from Stanford, Connecticut to break down the holiday
Speaker 1: travel trends. We have much more at Bloomberg Business Week
Speaker 1: coming up. You're listening to Bloomberg Radio