Kayak’s $457m writedown underscores Google’s AI shift

As Google’s AI overviews reduce free search visibility, travel brands face higher customer acquisition costs

Booking Holdings took a $457 million writedown on its Kayak brand, blaming declining cash flows and rising acquisition costs. Kayak’s CEO Steve Hafner attributed much of the pressure to Google’s AI-driven search changes, which have reduced free link visibility and forced brands to spend more on ads — a challenge now echoing across the travel sector.

Key takeaways

• Google’s AI overviews cut free traffic: Kayak lost organic visibility as Google’s AI answers increasingly satisfy user queries without clicks to external sites.
• Shift from SEO to paid search: The company now replaces much of its previous free traffic with paid Google ads, driving up acquisition costs.
• Industry-wide impact: Hafner said Google’s changes affect all verticals — flights, hotels, and other travel categories — not just Kayak.
• Google’s revenue mix shows the tilt: Paid clicks rose 4% year-over-year, but overall search revenue climbed 12%, suggesting higher ad pricing drives growth.
• Other metasearch players hit too: Trivago and Tripadvisor have also written down brand values due to reduced visibility and increased ad costs.
• Relative brand strength remains: Despite the impairment, Kayak’s fair value remains higher than rivals Trivago (€45.3M) and Tripadvisor ($36M).

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