KAYAK CEO Steve Hafner joins Yahoo Finance Live to discuss the demand and expectations for summer travel as well as the outlook for travel deals.
- Memorial day weekend travelers had a rough weekend with 5,000 flight delays, 500 cancellations just yesterday. The holiday which marks the unofficial start of the travel season gives us a nice gauge of the strength of the hotel and airline sectors. Let's bring in someone who reads those gauges.
Steve Hafner, CEO over at Kayak, is here with us live. Steve, great to have you on the program. I wanted to ask you just kind of broadly about the trends that you were seeing. Again, this is kind of a critical weekend to gauge the demand for travel through the summer season what are the numbers looking like from Kayak's standpoint?
STEVE HAFNER: Well, thanks for having me on, Brian. It was an amazing start to the travel season. So Memorial Day, if you went through an airport, which more than 13 million Americans did, that's only down 7% versus 2019. Memorial Day weekend historically is actually a road trip weekend. So there's a lot more people in traffic than in airports and on planes.
And if you look at Kayak search data for that, very robust travel demand. Our rental car queries were up 125% versus 2019. So we're off to a very strong start for the summer.
- Steve, it's Akiko here. We have heard so much about the huge spike in airline ticket prices. It doesn't seem like if you look at the numbers that's necessarily affected travel plans just yet. I mean, what does that tell you about the summer demand that's to come and whether you can maintain that kind of demand in the face of inflation?
STEVE HAFNER: Look, the demand is very, very strong. So if you look at Kayak data, again, flights were up 16% for the summer versus a couple of years ago, hotels 50%, and rental cars actually 130%.
So people want to get out and travel. The downside to that, of course, is the industry can't add that level of supply on. You can't bring that many new plays, new cars, and new hotels.
So prices skyrocket. So airfares, for those of you who are buying air tickets, you've noticed that there are about 45% higher than they were in 2019. Hotels, only 20%, rental cars even more expensive-- over 70% more expensive than they were in 2019. So it's going to be a tough environment for folks who are hitting the road.
- At the same time, though, what we know is that people want to get out there, right? I mean, it's 2022. People are still a little bit eager to go out and explore different places because they weren't able to during most of the pandemic.
Tell us about the traffic on your website which plugs in potential travelers with travel ideas and then itineraries by which they can actually book them. Are you seeing web traffic comparable to certain levels when the vaccination campaigns were out en mass last year? What does it 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 is seeing it from airlines to hoteliers, et cetera.
So you know, I think for folks who are traveling, it's a little bit harder or a lot harder to find deals, and deals are a relative term these days. So if you've got flexibility on destinations and on dates, you're better able to lock down a good price. If you want to use Kayak fare alerts, we can notify you when prices fall.
But if you do go out there and you're willing to head south, you can find good deals. If you want to get to Europe versus 2019, the dollar is about 50% stronger against the euro. We're almost one to one again. So Europe is a little bit on sale, if you will.
- It's a good time to go shopping in Europe. Steve, what does that data tell you, though, about where exactly people are headed? Is it largely domestic travel? Is it the usual international destinations like Europe? Where are you seeing the biggest demand?
STEVE HAFNER: It's still domestic travel because unfortunately, if you're going to get on a flight outside of the US, you still have to wear a mask, and you still have to get tested on the way out and the way back in. And for a lot of people, that's a hassle. So they prefer to stay local.
If they are traveling international, the two biggest markets that we're seeing lift now are the shortest markets away-- so Mexico and to Canada. So that's where people seem to be traveling. Although Europe historically has been very popular for the summer, we're not at the levels that we used to be in 2019.