Priceline Agrees to Buy Kayak for $1.8 Billion
Priceline, already one of the largest players in the online travel market, made a huge move on Thursday, announcing their intention to buy search engine Kayak in a deal valued at $1.8 billion. Kayak offers search across multiple booking sites—including Priceline and its competitors—to find low airfares, hotel rates, and other travel services. Kayak will remain an independent operation within the Priceline family of companies, with the current Kayak management running the group. Steve Hafner, KAYAK Chief Executive Officer and Cofounder stated in a press release, "We're excited to join the world's premier online travel company. The Priceline Group's global reach and expertise will accelerate our growth and help us further develop as a company."
Kayak is pretty much the only game in town when it comes to major meta-search travel sites, handling more than 100 million queries monthly. Other big names in the market, including Orbitz, Travelocity, and Expedia can only offer up their directly sold rates and deals; Kayak's ability to offer options from those big sites, as well as scores of smaller booking engines, has made it incredibly popular for customers' comparison shopping.
Priceline's acquisition puts both companies in a position to benefit from that dominance and also to extend it. And while consolidation is rarely good for consumers—less competition rarely is—this move may actually work in travelers' favor. By improving the reach and power of Kayak, more deals can be uncovered in more places, assuming that they do really remain independent and don't suddenly start to favor Priceline listings over other booking engines.
And while bookings cannot be made directly through Kayak, they are still generating significant profits through commissions for bookings that are initiated on site. With the additional resources of Priceline, it seems that Kayak will look to expand into more markets—they are mostly focused on the US today—where Priceline already has penetration and experience. This should further boost the bookings driven by the Kayak brand, further increasing profits for the company.
Assuming the independent operations plan holds the net impact to most consumers should be minimal to positive. And, all things considered, that's a good thing when it comes to major mergers.Photo credit: Airplane in silhouette via Shutterstock
Member Comments Post a Comment
Be the first to comment!
Fodor's Top News & Features
- 10 Top Bakeries Across the US
- World's 10 Best Trips for Wine Lovers
- 20 Gorgeous Seaside Towns in Italy
- Pot Tourism: How to Buy Marijuana in Colorado
- 10 Castles You Can Actually Afford to Sleep In
- Romantic Getaway: Long Weekend in San Juan
- World's Best Destinations for Solo Travel
- Where to Drink in Chicago Now
- 10 Best Lakeside Hotels in the US
- Cheap and Chic: 10 Affordable Hawaii Hotels
- 80 Degrees: Fodor's Helps You Find Your Best Beach Vacation Spots
- Fodor's Go List 2014: Where we are going in 2014
- World Cup Fever: Start planning your trip to Brazil!
- Fodor's 100 Hotel Awards: Check out the winners of 2013
- Weekend Getaways: Fodor's Recommends the Best Weekend Escapes in the US
- Great American Vacation: Find Your Next U.S. Trip with Fodor's
- $215 & up -- Florida: 4-Star Hollywood Resort & Spa, 40% OffThe Westin Diplomat
- $2435 & up -- Prague, Vienna & Budapest: 8 Nights w/AirGreat Value Vacations
- $999 -- Ireland: 4-Night Dublin Escape in Fall w/AirAer Lingus Vacation Store
- $1267 & up -- Ireland in Fall: 8-Nt. Vacation w/Air & CarGreat Value Vacations
- $209 & up -- Baja Mexico 3-Day Carnival CruiseCarnival Cruise Lines
- $130 & up -- Downtown Chicago 4-Star Hotel, Save 45%The Westin Chicago River North