You're listening to Bloomberg Business Week with Carol Masser and Jason Kelly on Bloomberg Radio. All right, Well, we've been looking forward to this conversation in part because this next guest is going to tell us what we need to know about two things we love, food and travel, to industries that, unfortunately you have been incredibly hard hit, uh in this crisis. Steve Hafner joins this, co founder, CEO of Kayak and the CEO of Open Table. He's on
the phone from Bridge Hampton, New York. Steve, really nice to have you with Carolin, myself, Jason Carroll, thanks for having me on, Steve. Al right, so let's start with travel if we can. Uh. You know, we've all been grounded. I think Carol and I both are used to sort of being out there doing reporting, doing remotes and all those different things. We've been grounded since February. How does
how and when does travel come back? Here? Sure? So yesterday we published data on Kayak from about a billion consumer queries, and it's actually showing you that there is some recovery in travel interest. So the bottom period for for what we've seen the query volume was happened in April seven when queries fell eight year of a year, and since then they've been gradually recovering. So yesterday, if you look at the data, query volume was only down
versus the previous year. So there there is a long way to go to be sure, but consumers at least are thinking about flying again and they're looking for trips. So tell us about you know, okay, so some I mean percentage wise, can you give us an idea because I know, you know, we keep talking about these numbers and they're coming off of such significant loads. I mean,
it's still way down, correct, It's still way down. So yeah, last year there was twice as many people looking for flights on kayak and there are uh this year as of yesterday. But that's that's come up from down the first week of April, so it is a recovery. And remember this is search data, this isn't actually booking data. So this just means that people are thinking about traveling again, right, And I know that that is largely based on consumers.
Talk to us about corporate travel because I think we're all trying to figure that out, not just again from a personal perspective, from our own work, but you know, knowing and talking to a lot of other CEOs about the decisions they're making in terms of, you know, maybe we should video con maybe we don't need to take quite as many trips. What's your read on that? Uh, you know, I share those sentiments. You know you're talking to somebody used to travel on a plane almost every day.
So it's been amazing boon to productivity not to have to do that. And I think, um, you know this this pandemics, you know, one of the few bright spots is it's taught people how to conduct their affairs uh
somewhat efficiently online. So typically, in past recessions and we're in one right now, business travel is one of the last things to return because companies are are really suffering, right, So consumers still want to travel, but consumers, but consumers may have may be able to afford that in a way that the business um can't. So typically business is
the last thing recover. I think it's gonna we're gonna see more the same now, and it may never fully recover back to the levels that it once was because people have learned to adapt. Wow, so we may never see twenty nineteen levels again. That's right, And that and that has UM. I mean, we're preparing to see levels back in terms of total travel demand by about three that's kind of how we've structured our cost in our
balance sheet. UM. But I think how people are traveling and what they're thinking about and how often they're going to travel are different and as a big implications for how airlines do their schedules, because you've got to remember that the business traveler usually is paying half the revenue on one of those flights. So I think they will see the frequency of trips go down, and I think you'll see average fairs go up to as business travels
no longer subsidize you know, the consumers of leisure travel. Wow, that's fascinating and that's pretty significant. So what about on the open table side, what are you seeing in terms
of restaurants. We're seeing recovery and restaurants as well. So people want to travel and they also want to dine out, and we're seeing a stronger recovery on on the restaurant side of the business half of you know, we've got about sixty thou restaurants UM on the Open table platform, about half of them have reopened, which is great and in terms of seated diners. Um, we we capture that
data and we make it publicly available as well. Um, that was down only about seventy yesterday, So so people are going out and seventy percent sounds like a big reduction, but you have to remember that because of COVID nineteam restrictions, most restaurants aren't operating at full capacity. A lot of them are only outdoor only where they have set up tents outside or that even that they have to have
their tables space six ft apart. So a lot of them are you know, fifteen to twenty percent capacity, and you know they're they're they're selling every seat they can and every table they can, which is great news. It's not enough to keep them in business, find you. But but it does show that consumers want to get out
of their houses well. And and to that point, I mean, I believe you guys had forecast and I think others have followed you in this regard that we could see a quarter of restaurants across the country go out of business. Does that still feel about right or what are you guys thinking? Now? That's that's still our best guests? You know, restaurants are tough business. They go out of business all
the time, as as you well know. But usually what location goes under it's because the concept was bad, what the management was bad, and a new restaurant takes his place. That's not what we're expecting now. So when we talk about restaurants going out of business, that means the location shutters permanently and becomes something else. And you know, it all depends on what happens with COVID nineteen and the restrictions, right,
so can we safely dine out again indoors? Will employees come back and start working in restaurants again versus collecting benefits were doing other types of work. So you know, well, we'll see what happens. But that's that's our prediction. Hey, Steve, thirty seconds and then we're gonna do some news and come back. But I just do when do you just talked about workers? Are some restaurants Are they having any
trouble finding staff and getting workers to come back? Absolutely they are, and and a lot of restaurant tours have been very vocal about that. So you know, the benefit package that was passed by the government was very generous, and I applaud the government for doing that, and you know, unwanted by product of that is some people are making more money by staying home than than by working to
clean the restaurant business. So you know, I'm friends with a lot of restaurant tours here in Bridge Hampon and they're having a tough time even with being really able to reopen and actually finding staff to work. Still with us as Kayak an Open Table CEO Steve half Now. Steve is also co founder of Kayak, and he joins us on the phone from Bridge Hampton, New York. So, Steve, what are the things that we've loved talking with about
leaders at companies right now? Is how the pandemic ultimately has changed any of your long term strategic planning for your businesses, um, So talk to us about that, sure, I mean, I think besides the immediate business impact and having to scramble to make sure that we are a viable entity and to get our users home and take care of our customers, we actually double down on a
lot of our products initiatives. So you know, having business be where it is, which is dramatically decrease, has actually freed our development team to accelerate a lot of projects
and you know. One of the things we've also seen is with fear of the virus comes changing consumer and business habits, so people are much more interested in, you know, on the restaurant side, for example, how to see your menu from your app, how to order from your app, how to pay from your app, um you know, how to bypass a hostess stand and pick your own table
to sit at, so we actually see you know. One of the silver linings of the of the pandemic is a lot of innovation on both the dining and travel side of the business. So you know, Kayak soon it's going to launch a road trip components so people can see cool places go to nearby. And our rental card business and I never thought i'd say that, So our rel card business is actually bigger than our flight business today. Wow. So there's a lot of changes going on in in
consumer habits and in business habits. So Open Table, for example, historically we've only been a table management system for restaurants, but now we've modified the software so grocery stores can actually accept reservations and use our our software. Soil can bars, soil convineyards, and soon soil can university dining halls. So
really cool stuff happening. Yeah, so as you look across the country, you know, Steve, and this is something we are wrestling with literally every day, and and every time we talked to somebody who's not in the Tri State area physically, we're asking them, what's it like in Dallas, what's it like in Chicago, what's it like in Iowa. UM, you have the data that really gives you that those insights. As you look across the country, how does the US
economy feel? You know, it's it's almost directly correlated with the amount of COVID impact. And you look ation and the resulting restrictions. So as researchers loosen up, business activity rapidly recovers. And on the travel side, people go to those places. So you know, if if you look at our travel satistics, UM, the top five places people are going to are in traditional destinations like New York, Paris,
and London. There are actually places you can go to that our outdoors and you can do things like go to restaurants. So three of our top five cities right now are in Florida. The other two are in Puerto Rico and Dominican Republic, which just opened back up so you know, people want to travel, and when they do travel shorter flights nearby and places where they can actually
go out to do stuff. Yeah, the outdoor venues that it seems like are really going to benefit, certainly for the next few months, certainly are a comfort level I know on on our side. UM, you know it's interesting too. I'm curious as you've gone through this process, what's the best advice you've gotten from someone during the pandemic, personal or professional? Well, first of those sides to stay home, and I think that served everyone pretty well. You know.
On the professional side, you know, we've we've always operated Kayak and Open Table for sustainable, long term growth and um, you know, we haven't gotten over our skis on spending or anything like that, and we've played close attention to our users and our team members and that served us very well. So unlike a lot of other companies that were losing money going into this, we were making money. Um, and we trimmed our expenses to ensure that, you know,
when travel rebounds were prepared. But you know, I love the fact that we didn't have to scramble, we didn't have to take um big changes to our operating models. We were able to cut our fees and waive them for restaurants to help, you know, them struggle with their businesses. So I think the the best of us I got professionally would be prepared, even in the good day, good times,
for bad times ahead, and that served us very well. So, Steve, you mentioned earlier in the conversation that you know, you were on a plane practically every day in normal times. I'm sure you've been some incredible places. What do you sort of what what's the sort of place that's kind of out there in your mind of when everything is normal enough you want to go back to. You know, typically I spend a month a year in Sweden and my mom, who's any one lives there. I can't wait
to go back to to Stockholm. It's one of the world's best places. And I really want to see my mom right right now. She doesn't even want to see me because she's afraid I'm gonna her um. But you know, that's that's where I really like to be. And by the way, I was just in Miami on on Saturday, so I do know would like to travel right now, and it's it's a plane trip is totally different now
than it was before the pandemic. You know, the tone in the airport, at the traffic levels, the safety protocols as you bore the plane and as you're on the plane are very different with the mass and and you know, just goodie bags, no no meal service or drink service. But I'll tell you once you get to that defination, you're really happier there. Yeah. Interesting. Alright, Well, we look forward to catching up with you as we get more into whatever the next normal looks like. Steve Hafn really
appreciate your candid insights. And you know at Bloomberg we love data and so to talk to someone else to data is really great. Steve Hafner is the co founder, CEO of Kayak and the CEO of Open Table. He joined us on the phone from Bridge Hampton, New York. Here's hoping for his sake and his mom's sake that he gets to Sweden before too long. That was very sweet and interesting to hear. You know, he was on
a plane. It's different, but you know, people are going to make their way back ultimately, so we'll see more of that.