Kayak Private Sale, the travel metasearch company's upcoming offering of exclusive hotel, flight and vacation package deals to registered users, is an interesting product name for a company considering an initial public offering, but I digress.
A departure from Kayak's core metasearch business, Private Sale has raised some eyebrows in Australia and the U.S.
Fellow Tnooz node Tim Hughes, writing for his personal blog, The BOOT - The Business of Online Travel, pointed out that getting into the exclusive deals' business makes Kayak "a zero percenter no more" in terms of an operational-costs' advantage. And former Kayaker Drew Patterson notes that offering exclusive deals is not part of Kayak's traditional DNA.
Hughes says that, with private deals, Kayak likely would lose the cost advantage that comes with not having to support an ample sales staff because someone is going to have to go out and strike those exclusive supplier deals.
And, Patterson, the founder and CEO of private-sale [lower case] vendor Jetsetter and a former vice president of marketing at Kayak, also raises some issues.
Patterson has lots of respect for his former colleagues at Kayak, but points out that "the challenge for those guys is that this looks a lot different than their core business."
In other words, Patterson points out that Kayak metasearch is all about being unbiased and comprehensive, whereas exclusive deals/private sales are much the opposite of that.
Patterson doesn't give as much emphasis as Hughes to the "zero percenter" issue, noting that Kayak already has "a decent sales organization."
But, Patterson argues that Kayak, which heretofore has concentrated on its media business, will now have to focus to a greater extent on the booking and overall customer experience, processes that "are different than Kayak's DNA."
However, Kayak has a bunch of smart people and a "top team," Patterson says, so he's confident Kayak is up to the challenge.
So is Patterson worried that Kayak's entry into exclusive deals will hurt Jetsetter's business since that is Jetsetter's core business?
"Not especially," Patterson says. "I don't think this is top of mind to them."
Yes, for the Kayak Team, private sales or not, a public offering, i.e. an IPO, perhaps is much more top of mind.