Kayak is changing its business model and is expected to become a direct competitor with sites like Orbitz and Expedia.
According to a Mashable report, acting as simply an aggregator was one of Kayak’s biggest faults. The online travel-searching company did not allow customers to book flights or hotels directly on its site. Instead, users were directed to other third-party travel sites or to airlines directly.
With this latest change in its approach to the industry, Kayak will begin offering customers the option to book hotels directly on its site. The service will launch in beta on Monday and is expected to strengthen its operations as the company heads into an initial public offering.
According to the company’s November 2010 filing with the SEC, it had generated revenues of $128 million from January through September 2010, representing 48 percent year-over-year growth. During the same time period, the site saw 69 million user searches for travel information, a 37 percent increase from the previous year.
In perhaps one its smarter moves, Kayak is partnering with Travelocity for its new business model. As the former joins the hotel-booking industry, the latter will process the transactions and deal with customer service issues.
Earlier this month, Kayak had announced a deal with Bing to bring its flight search results to the Bing site. The hotel-booking option is expected to be available to the public in the coming weeks on Kayak’s website and iPhone app.
Kayak critiqued the competition in its IPO filing, saying that Google held an unfair advantage in travel search. Kayak believes that the competition from general search engine companies could have an adverse effect on Kayak and that its partnership with Bing could level the playing field.
Last month, Microsoft launched its own travel assistance tool. The 2011 version of Microsoft Streets & Trips provides travelers with a convenient and easy way to plan their adventures from beginning to end and find interesting places to stop along the way.
Microsoft Streets & Trips assist users in preparing their plans and also helps them to personalize their travel ahead of time. Whether they want to visit a casino, a winery, a cinema or even an amusement park, Microsoft Streets & Trips has information that will help them with their choices.