''What's happening now is search engines and online travel are converging," said Steve Hafner, cofounder and chief executive officer of Kayak and former executive vice president at Orbitz, another online travel agency.
Hafner, in a briefing for reporters, said online travel is a $55 billion market and growing fast. He said his research indicates 6 percent of travelers booked online five years ago, while today that number is approaching 30 percent.
Still, Hafner said, surveys indicate many online travel shoppers are frustrated with their inability to find what they want on one website. Nearly 7 out of every 10, he said, shop around, visiting more than one site each time they make a travel purchase.
At Orbitz, for example, a search of air fares doesn't include two of the most popular discount airlines, Southwest Airlines and JetBlue Airways. To find out what those airlines offer, you have to go directly to their sites.
Travel search engines are trying to let customers search all the travel sites at once. Hafner said the goal is to present results in an objective way and let the customer decide which option to choose.
''We're a search engine," Hafner said. ''We don't care what you buy or where you buy it."
Hafner said search engines also have an economic advantage over their travel agent competitors. For an airline selling two seats, he said, the referral cost would be about $2.50 for a customer clicking through from Kayak.com. That same customer booking through an online agency would cost the airline about $32 in commissions. For hotels, the price gap is much narrower, but still favors the search engine, Hafner said.
In demonstrating how Kayak works, officials at the company booked a room at a Hyatt in West Hollywood, Calif. The site indicated prices started at $175 a night at Hyatt.com and $215 a night at Orbitz. Hafner said the difference in price was not unusual.
''For a lot of online agencies, buying a hotel room there is not the deal it once was," Hafner said. ''It pays to shop around."
