Many online travel intermediaries have popped up since the internet went public in the mid-1990s. Travelocity, Orbitz, Cheaptickets, Hotwire, Priceline, and others have succeeded in disintermediating the travel business and nearly extinguishing the traditional travel agent. But what happens when an intermediary comes along that disintermediates the same intermediaries who have just displaced some other intermediary? Enter Kayak. Rather than checking multiple travel sites to see who has the best deal on airfare, one can go to www.kayak.com, type in their departure and destination locations, and in a matter of seconds, view the fares available on all airlines servicing the route.
Actually, this is not true disintermediation. Kayak is not taking away business from the online travel sites as a whole. Rather, it is a referral site. Once customers have found the fare and carrier they prefer, they can then click on that fare and be taken to directly to the supplier's site (e.g. Expedia, Delta, Continental, Cheap-Tickets, etc.) to complete the transaction. But the effect of this new intermediary is increasing price competition among the intermediaries (and airlines). The result is likely to be a shift in which travel sites and airlines get any given customer's business, rather than a decrease in the category of travel Web sites.
a. Discuss the activities of Kayak in the context of disintermediation. How is this new service affecting the disintermediated travel agents, the disintermediated travel websites, and the airlines?
b. How might Kayak be contributing to channel conflict?
c. How is Kayak adding value for customers?