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How Does KAYAK Make Money (Business and Revenue Model)

The KAYAK business model

How Does KAYAK Make Money?
Here’s what you should know:
  • What is KAYAK, and how does KAYAK work?
  • How does KAYAK make money?
  • Referrals
  • Advertising (Third Party and Directly)
  • KAYAK’s Subsidiaries, Acquisitions, and Exits
  • KAYAK’s profit and revenue
  • What is the KAYAK business and revenue model?
  • KAYAK’s funding and valuation

How does KAYAK make money if it’s free? Here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the KAYAK business model, their year-over-year revenue, and how KAYAK works.

What is KAYAK, and how does KAYAK work?

KAYAK, a subsidiary of Booking Holdings Inc, is an online travel agency and metasearch engine.

How KAYAK works is: Users go to KAYAK to check out flights, hotels, and cars. Once they find something they like, they are redirected to those travel agencies to book.

Founded in 2004 by Steve Hafner and Paul English, KAYAK went public in 2005 and was later acquired by Booking Holdings on May 21, 2013, for $2.1 billion. Today, KAYAK receives more than 2 billion search queries per year and partners with more than 1,500 advertisers.

Some of KAYAK’s competitors include Tripadvisor, Expedia, and other online travel websites.

KAYAK App in Apple App Store | KAYAK Business Model | How Does KAYAK Make Money?
Source: Apple App Store

How does KAYAK make money?

Some of KAYAK’s statistics include more than 2 billion search queries per year and over 1,500 partnering advertisers.

So how does KAYAK make money from all that website traffic and advertisers?

Below is a breakdown of how much money KAYAK makes and its revenue model. Including their main revenue streams and how much they make from their services.

Here are the 2 ways of how KAYAK makes money (in 2021):

KAYAK has a revenue model that makes money in two (2) ways – referrals and advertising.

#1. Referrals

KAYAK makes money through referrals by driving traffic to OTCs (Online Travel Corporations) and travel service providers.

The way it works is: KAYAK partners with select travel service brands to drive traffic and sales through KAYAK’s search result recommendations. When users click to the referring site and/or book something, KAYAK makes money.

Note: It’s unknown how much money KAYAK makes per each successful referral.

#2. Advertising (Third Party and Directly)

KAYAK also makes money through advertising – through, both, third party Ad Networks and with advertisers directly.

Directly: KAYAK partners with more than 1,500 advertisers for ad placement on their platform. These show up in the search results as “sponsored”. Partnering companies include airlines, hotels, car rental companies, and other travel service industries.

Third-party: KAYAK allows Ad Networks to display targeted third-party ads on their platform. KAYAK makes money on this through ad clicks and impressions.

KAYAK Advertising | KAYAK Business Model | How Does KAYAK Make Money?
Source: KAYAK

Note: Although there is no way to know for certain how much money KAYAK makes from third party ads. Based on the estimated amount of traffic they get, worthofweb estimates they could be making an extra $20 million per year in ad revenue.

KAYAK’s Subsidiaries, Acquisitions, and Exits

Aside from KAYAK being acquired by Booking Holdings for $2.1 billion, KAYAK has made a few of its own acquisitions as well.

To date, KAYAK has made a total of 6 acquisitions.

KAYAK Acquisitions
Source: Crunchbase

KAYAK’s profit and revenue

Booking Holdings, parent company to KAYAK, does not publicly release KAYAK’s financial reports.

However, before getting acquired by Booking Holdings in 2013, KAYAK publicly reported annual earnings of $292.7 million in 2012. This was KAYAK’s last publicly reported revenue.

On the other hand, Booking Holdings made $6.8 billion in revenue in 2020.

Note: Because Booking Holdings Inc., parent company to KAYAK, is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Booking Holdings’ publicly released financial reports, including annual reports, through Booking Holdings’ investor section on their website.

What is the KAYAK business and revenue model?

KAYAK makes money through a few revenue models that they combine within their company, they are:

  • Referral business model
  • Advertising based business model
  • Mergers & acquisitions (M&A) business model

KAYAK’s funding and valuation

According to KAYAK’s Crunchbase profile, KAYAK raised $229 million over 7 rounds.

KAYAK was acquired by Booking Holdings on May 21, 2013, for $2.1 billion.