It is the most wonderful time of the year because the holidays are here and we get some time off, have money, we'll travel, have time, will travel. But Katie, are there any travel deals to be had? It's a great question. Luckily, my husband has been booking everything, so I couldn't tell you. But but he'll know the answer to that. Yeah, we'll get him on here tomorrow. Okay. Well, in the meantime, let us check in with Steve Haffner, he is CEO of Kayak, to tell us what he
sees out there. Steve, give us a read of what you're seeing. Are there a lot of people looking searching for last minute deals? Absolutely, travel interests, consumer travel interests and getting out in a way is stronger than ever so Kayak domestic queries up versus last year. International queries are up even more people, despite the headlines of macro trends, UH seemed very eager to get out in a way.
And and that's reflecting in prices. By the way, the average domestic airfair is five dollars right now, and if you want to leave our borders, the average international affair is almost a thousand dollars. Well, we live in the macro, and all we talk about is inflation is a recession coming, And like you said, you're not really seeing that reflected. And I want to talk about the psychology of that. Is that revenge traveling? Is that just extreme pent up demand? Yeah,
I mean we we're not seeing it yet. But what you have to remember what the travel business. We had two years of basically no travel, and that was all collapsed into six months of travel two And you know, I think I think most of the revenge travel is done by now. People are just remembering how great travel is and they're looking forward toward the next trip. So I think that's what's going on. I suspect prices will stabilize a little bit going into at least I hope
they do. But we we don't see any slowdown in consumer interests and travel. I want to pick up on something you mentioned, which is, uh, international flight searches are up sixty percent year on year. How much of that do you think is due to the strong dollar and people realizing that if they go somewhere else they can take advantage of their dollar because at home, and I mean, obviously this is a case globally inflation is is such a scourge and it's really limiting what we can spend
out there. But if you go to Europe, then you know there's a discount. If you go to Japan, there's a discount. And it if you're going to spend the time and the money to take a break and go somewhere, better to go somewhere where your dollar gets you further. It definitely goes a lot further abroad than it usually does,
especially in Europe. But the problem is you still got to get there first, and you know, international air Force, like I mentioned, are almost a thousand dollars round trip and economy to get there, so it's still very expensive. I will say that the most the highest trending destinations aren't in Europe. They're actually in an Asia Pacific because you've got a bunch of countries there that have been
closed for the last two to three years. So I'm talking about Vietnam is the top of our list, Australia, Thailand even so, I know that during the pandemic and right afterwards, are a lot of flights that were cut and so the supply of these flights were limited. Have we seen supply come back up to meet that increased demand? It's coming back, but it's it's still below where it
wasn't two thousand nine. So if you look at t s a passenger accounts, now we're almost back to two levels, which is pretty impressive because the airlines themselves have about eight percent fewer seats to fly, so you know, if you're if you've been flying, you will notice the planes are full. And that's also what's being reflected in the air fares. And I know we're talking about holiday travel and the fun type of travel, but let's talk about um business travel for a little bit. Are we seeing
any sort of rebound there? Business travel is definitely back, not in terms of total passenger a count, but in terms of revenue because of these average fairs. What's different about it though versus pre pandemic is, uh, the day trip. The whole notion of flying somewhere to see a client and being home in your own bed at night is
essentially gone, so just way to convenient for that. Plus a lot of companies allow their employees attack on a day or two on either side, so what we're seeing is a lot more to the three day trips than than single day trips. And then the second trend that's a little bit uh different these days with business travel is it's not all about visiting clients. Now. A lot of companies are trying to get their employees together, so we're seeing a lot more off sites and fun destinations.
So that must mean that the kinds of um flight routes that companies are the airlines are offering has to reflect that perhaps we are not flying into San Francisco anymore to this savent step because they can zoom. Certainly, we know that all these people who are in the Bay Area are working from home, so that they're fine with doing that technology and meeting that way. But if companies are sponsoring their employees to go on an off site, it might be to New Mexico as opposed to San Francisco.
That's right. So the last three Kayak oup sites, for example, have been in Dubai, in Mexico and in Iceland. I want to work at Kayak. That sounds great. Let's talk, though, I mean I'm still stuck on the macro since that's all we do at Bloomberg. And you do write in your notes, uh that if you look at domestic flight searches, prices are up fifty two percent internationally prices up twenty nine percent, and obviously the consumer is resilient. We're seeing
that in all parts of the economy. But at what point if you look at past inflationary periods, and to be fair, there haven't been a ton of them in the past two decades or so, But at what point do we start to see maybe a little bit of that demand destruction in the face of higher prices. Well, look, I I would hope demand softens a bit, because that will absolutely put a little bit more downward pressure on on prices. But I think it's actually input costs that
need to soften first. So fuel it's a big, big cost center for the airlines. That's got to come down. Staffing costs has gotta come down, and then we you know, the big airlines have ordered much more fuel efficient planes. So if United you can get its hands on, you know, a hundred more Dreamline ears from Boeing, that will help a lot with their their actual unit economics. Is there going to be a quiet period, a lull um in terms of travel coming up anytime soon? Or has our
post COVID travel habits changed? All of that changed what we're familiar with, where you know, maybe mid January is a really quiet period, but that that's no longer the case. I don't Yeah, we haven't seen that in the numbers, so it used to be historically you see these peaks and valleys, and but what the airlines would trying to do is cut airfares to maintain occupancy on their planes, and hotels who do the same thing with their rates.
But we're seeing no evidence of any price softness, which tells you that demand is is still pretty strong throughout all these periods. And I think the pandemic gave consumers a lot of flexibility, particularly someone so you don't have to go into the office every day, as you mentioned in San Francisco in particular, So that that means that they're exercising the desire to fly in a typical pit time periods. And I think that's that's good for the industry,
and that's actually good for consumers too. And let's unpack some of this demand. Where are people actually looking to go, especially on an international level, where are they trying to fly to. It's the usual suspects, you know, the big cities,
so Paris, London, etcetera. In Europe, and then as I mentioned, a pack is a is a big draw in terms of being trendy right now because you know, you're average American hasn't been to Australian three years, right because you had a quardantinae when you got there for extended period time at your cost. So for for those folks who have connections in a pack in Japan or in Thailand, etcetera, now is the time to go, and they're voting with
their feet. Steve, is there anything you're excited about when it comes to innovation and travel, something that you're looking ahead to that could really change how these companies are responding to this increased demand? Absolutely. Look at Kayak, we've been innovating the space where it was it was twenty years.
So the thing that I'm really interested in these days is how can we make the security line and the check in much more efficient than it is today because we simply don't have the staff and the human resources to handle the volume of consumers coming through airports right now and onto planes. So you would hope that identity facial recognition can can make the whole process a lot
more efficient, and I think that's that's coming. So if you've ever had the experience of boarding a delta flight internationally, but they just scan your face when you board. It's pretty darn cool and also very very efficient. See kind of scary. That is scary. I don't want to think about that one too deeply. But Steve twenty seconds, are
you traveling this holiday? I am not. I actually live in Miami and up in Stanford for the for the cold weather for the next three weeks, and then you know, once the dust settles on January and the rear view mirror, then I'll go down the same parts, all right. So I think you're the opposite of the snowbird if you're traveling from Florida to the snowy place. Really interesting to get some time with you, That is Steve Haffner. He
is co founder and CEO of Kayak. He joins us on Zoom from Stanford, Connecticut to break down the holiday travel trends. We have much more at Bloomberg Business Week coming up. You're listening to Bloomberg Radio