The only other comment I’ll add is that performing a behind the scenes booking can become uber complex with fare unbundling or a-la-carte pricing models, where airlines/merchants add options, alerts, T&Cs or diverse degrees or cross-sell on their checkout pages.

In my opinion that’s the single toughest nut to crack for Kayak as a data intermediary.

Dennis & Sam – I don’t think the Frequent flyer data is an issue. Ask Traxo – they are asking for every frequency program ID out there and people are obliging. If Kayak provides value, keeps them secure, and earns the trust of their customers, there is no issue, most people will be happy to provide them. The key is earning the trust.

Alex, Sam & Jonathan – I don’t believe PCI compliance will be an issue for Kayak. They do not need to store the security code – it can be entered by the user at the time of sale to validate the purchase. The code can be encrypted and passed securely to the merchant without ever being stored by Kayak.

Joe, Roberto, Kevin – I still see Kayak strictly in the Meta-search space. One key to producing more relevant meta-search is having better profile information. That enhanced profile information also provides a better mobile experience by reducing the required amount of typing. It seems to me that the expanded profiles will also enhance the browser search & booking experience as well.

By triggering the purchase transaction, Kayak will get better clarity regarding true conversion statistics and revenue generation. Knowing the customer has committed to a booking also helps improve the reliability for TravelPost reviews – perhaps introducing the potential for a “confirmed traveler” seal of authenticity on the reviews.

One additional benefit is that the Kayak Ad network should be able to monetize the enhanced profile information by charging advertisers a higher CPA based on improved targeting and conversion while offering site visitors more relevant offers and promotions.

It looks like a win-win-win for Kayak, the traveler, and the advertisers. Suppliers may also win if they provide a strong brand franchise, comparable product, compelling marketing and competitive pricing. The potential loss will be traffic to the travel supplier websites prior to booking, although there may still be ample opportunity to upsell and cross-sell travelers in the post-sale / pre-trip phase.

But the big win is in the mobile space… It’s already hard enough for these iPhone users to simultaneously drive, talk on the phone, text their friends & eat fast food. Kayak just made it a bit easier for them to add booking travel to their multi-tasking list.

Kayak will see huge mobile internet traffic growth – as long as these iPhone users manage to avoid becoming mobile highway traffic fatalities.

What I wonder is if Kayak just sees those as technical details that will be addressed in due time, but recognizes the vulnerability of OTA’s now and thinks it’s more important to make a move to establish a strategic beachhead in mobile booking.

Given that Kayak’s been, as Joe points out, investing a lot in offline marketing – including most of the full-page iPhone co-op ads in USA Today – perhaps they’re betting on how difficult it could be for an OTA that’s been successful on one platform (PC internet) to transition that success to a mobile platform?

As just one example, OTA strengths online in driving massive traffic by indexing tons of pages for SEO and outspending on SEM are basically non-existent on mobile at this point, so if Kayak’s investing heavily in driving penetration for its mobile apps before the OTA’s do, the OTA’s might be well-behind already.

Any other thoughts?

I do not see this as a new model, not even with their focus on the mobile market; there are other OTAs that already support mobile for simple bookings.

Kayak will be very similar to an OTA but get paid for the referral by the supplier rather than charging a booking fee to the traveller and staying clear of the customer service obligation.
This model has been there for a while, even amongst our customer base.

What Kayak has going for them is a great market penetration and this is a good way for them to monetise even further on their traffic.

From Gigaom
“The company is building a wallet system to allow users to book travel using their Kayak accounts. They’ll be able to use their saved credit card, frequent flier numbers and flight preferences, and Kayak will then go enter that data into the providers’ sites”

Yes – they can store the security code – if they are a payment processor – but that is tied to them – not able to be transmitted around the place.

Hence if they are working with credit card security codes it must be the money they are transferring to airline partners (e.g. Kayak operating as an agent) rather than the credit card details. As they can’t be storing the security code…..

That is the million dollar question….

Travelfusion should be inspired by this move, as they’ve been doing exactly this behind the scene booking for years and on tens of airlines, but only for B2B.

Sounds like a winner, in fact it might be the first time meta search has made sense to me as a business. If half the users on meta search nowadays are like me, they use it figure out the airlines supplying a city, then book direct with the airline…

Side note, I’ve mentioned kayak and momondo to tons of friends, yet none of them can remember the names, let alone spell them… Fly.com has some advantages there!!