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.

Google’s AI Overviews Reduced the Visibility of Free Links

Over the past year, Google has pushed its own AI-driven answer formats in response to the ChatGPTs of the world. So Google’s answers to consumer queries are often self-contained and don’t require a click to a third party, such as Kayak or Expedia.Source: Google

The free links have lower visibility than paid links, so companies such as Kayak have to spend more to acquire customers.

In the second quarter, according to Steady Compounding, Google’s “paid clicks increased 4% year-over-year. With search revenue up 12%, Google’s growth is coming primarily from higher prices and, to a lesser extent, increased volume.”

Hafner said the Google tilt toward more paid links affects every company that is “really good at getting free clicks,” including Kayak. He said Google’s moves affect “all verticals,” including flights and hotels.

Trivago Also Feels the Google Squeeze

Kayak rivals Trivago and Tripadvisor have also felt the Google squeeze from changing ad formats and the decline of SEO.

Despite the Kayak impairment charge, the value that Booking Holdings’ gave to the fair value of the Kayak brand — essentially its trade names, trademarks, and domain names — was greater than that of its competitors.

At the end of 2024, the value of Trivago’s brand was 45.34 million euros ($52.6 million), down from 75.61 million euros ($87.7 million) a year earlier, according to a financial filing. In 2024, Trivago took a 30 million euro ($34.8 million) impairment charge on its intangible assets.

Similarly, the value of the intangible assets of the brand Tripadvisor — essentially its legacy metasearch business that competes with Kayak and does not include Tripadvisor’s Viator and TheFork brands — fell to $36 million at the end of 2024. A year earlier, that Tripadvisor brand value was $43 million, according to its 2024 10-K.

Story Continues

As of the end of the third quarter of 2025, the fair value of Kayak’s trade names (its brand) was $103 million, according to Booking Holdings’ quarterly filing.

Impairment Charge a ‘Nothing Burger’

Hafner brushed off the impairment charge.

“First of all, it’s a nothing burger. It’s an accounting issue,” Hafner said. “And what it reflects is one simple thing, which is that free traffic that everyone in the business has been getting is now paid traffic. So if you’re a standalone company like Trivago or Tripadvisor, that markdown is reflected in your valuation.”

However, he added that if you are a subsidiary like Kayak, the change “is reflected in a goodwill writedown.”

Hafner said Kayak is “still quite profitable.” But referencing the impairment charge and the falling valuations of competitors, he added: “When you see your competitors with a valuation that’s a lot lower than where they used to be, even at our profit levels, you just can’t carry us on the books the same.”

Google didn’t immedately provide a comment.

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