Kayak CEO on $457 Million Writedown: Google Squeezed the Travel Industry Again

Booking Holdings announced Tuesday that it took a $457 million accounting writedown on its Kayak brand because of an expected reduction in cash flows and hikes in customer acquisition costs.

Kayak co-founder and CEO Steve Hafner's explanation to Skift Wednesday about what happened has implications throughout the travel industry.

In a Skift interview, Hafner laid much of the blame on the rise of large language models, which includes Google's AI Overviews: Kayak, he said, had to spend more money on Google ads to attract traffic that previously came from clicks on free links.

Google, which is "still by far the biggest third party channel," changed the mix, primarily in North America, of free links via search engine optimization (SEO) versus paid links in search results, Hafner said.

Kayak still has "a very big SEO presence on Google, but it's smaller than last year, and we replaced that free traffic with paid traffic on Google," Hafner said.