In a major twist, Kayak began taking direct hotel bookings on its own website through a white-label partnership with the Travelocity Partner Network.
Under the revamped system, the first hotel booking option in Kayak's core hotel search results will be Book Kayak.com, with the word "Book" highlighted in green.
Travelers can click the button, input their credit card information and then book the hotel on Kayak.com.
The usual metasearch options, where consumers would be transferred to Orbitz, a hotel website or via an ad to Expedia for bookings will be listed below the direct Kayak booking option.
The new display looks like this:
Kayak is not becoming an online travel agency per se, but has upset the metasearch applecart.
The Travelocity Partner Network is the merchant of record and handles customer service on a white label basis.
So, the Travelocity Partner Network is the travel agency involved here.
To the traveler, however, the booking experience on Kayak, including filling in billing information, is Kayak-branded like this:
Robert Birge, Kayak's chief marketing officer, says the credit card statement may say World Choice Travel, which is a division of the Travelocity Partner Network.
The deal is not an exclusive one for the Travelocity Partner Network and Kayak can bring in additional partners in the future.
The Book Kayak.com option was slated to be released in limited beta March 14 on Kayak.com and to debut perhaps within days on Kayak UK. Other Kayak international sites, such as Swoodoo, likely will get the option, as well.
Birge says the company has known for a long time that some consumers would prefer to book on Kayak instead of having to navigate to a partner site to complete the booking.
After all, Birge concedes, "some sites have great booking paths and some are not that great."
Kayak apparently has no intention of transforming into an online travel agency and Birge says its core metasearch business will remain intact.
"We will continue to provide choice and that will not change," Birge says.
And, Birge discounts the notion that the Kayak direct-booking option will hurt relationships with its metasearch distribution and advertising partners.
"Online travel agencies are accustomed to choice within Kayak and how they view their relationship with us will not change," Birge says.
The Book Kayak.com option will be coming to Kayak's iPhone application "in the coming weeks," Kayak says.
Here's what the current mock-up looks like:
Kayak hopes the Book Now button in the iPhone app will bridge the gap between hotel information displays and converted bookings. Mobile apps accounted for 8.2% of Kayak's total queries in 2010, but less than 1% of revenue.
Since the summer of 2010, Kayak's iPhone app has offered a Kayak Connect option, enabling travelers to book a limited number of domestic U.S. airlines within the app instead of having to phone suppliers or navigate to other websites to book.
Kayak hopes the Book Now option on the iPhone app will ease the process further.
"For people in the mobile app, this will make purchasing a whole lot easier," Birge says.
Neither Kayak nor Travelocity disclosed the terms of their new contract, but Travelocity was bullish about the deal.
"The addition of Kayak to the Travelocity Partner Network is a testament to the strength of Travelocity's broader distribution network and our global hotel platform," says Hugh Jones, Travelocity's president and CEO. "Our TPN partners are world-class organizations and share our commitment of bringing value and quality service to our mutual customers."
Kayak's decision to bring in Travelocity as its white label hotel partner comes despite the fact that Travelocity is absent from Kayak's core metasearch results.
Asked about the disparity, David Larsen, vice president of the Travelocity Partner Network, says "this private label relationship is a natural and powerful fit amongst the two companies."
Characterizing implementing direct hotel booking on Kayak sites as "not a trivial affair," Birge says the company, which became PCI-compliant, "has been working on it for a year in one capacity or another."
So, will Kayak, which may be on the cusp of an IPO, expand direct hotel bookings on Kayak to airline tickets and other products, as well?
Birge says Kayak won't discuss future plans until they are executed, but added "we are always looking to improve" and "we're looking to provide new offerings all the time."