View it as an opportunity or an evil, but if you're an entrepreneur, business travel is likely a big part of your life. Each year we pick the people, places and companies that are improving the way we get around and our experiences once we get there. This time we focus on the long-standing achievements of Kayak--whose streamlined search system has become the de facto standard for trip-building--as well as a disruptive new airline model and more. The efforts of these companies are making travel more efficient, comfortable and, sometimes, even enjoyable--allowing you to spend less time planning and more time focusing on what matters: growing your business.
Lifetime Achievement: Steve Hafner, Kayak
Still Innovating
Kayak's new corporate headquarters fills an abandoned Stamford, Conn., police station. It looks like the office of a startup, not that of a company valued at nearly $2 billion. Exposed brick walls are unadorned. Employees, including executives, sit at desk clusters throughout one big room. Goofy accoutrements, such as an old British telephone booth, do the work of actual décor.
CEO Steve Hafner and his partners sold the business to Priceline in November 2012 for a significant payout. Yet Hafner still doesn't have an office.
It's all by design. A decade into Kayak's life span, Hafner still perceives the travel search engine as a work in progress. The sale to Priceline wasn't so much an example of an entrepreneur cashing out (ending the business-creation arc in order to eventually begin it again elsewhere) as it was getting the economy of scale Hafner needed to fulfill his vision. "There's so much left to be done," he says, pulling up a chair to a round plastic table in a makeshift coffee area.
Hafner was part of the team that launched Orbitz in 2001. Yet he doesn't see himself as a serial entrepreneur. A former Boston Consulting Group foot soldier with a degree from Dartmouth's Tuck School of Business, he hardly fits that profile. "Steve was on a blue-chip path," says Robert Birge, Kayak's CMO. "He was as establishment as you can get."
Instead, what Hafner had back then was a single insight. He grew up living in Texas, Peru, Costa Rica and Guatemala and traveling widely. As the internet gained traction, his instinct told him that people would want to buy plane tickets online, from a virtual travel agent as opposed to a real one.
But by getting airline-industry funding for 80 percent of Orbitz, he denied himself the chance to create his ultimate product: a one-stop site for planning an entire trip. "The airlines' objectives weren't always in the best interest of our users," he says.
It's important to start with a simple idea, it might be really hard to execute, but it should be very easy to explain.--Steve Hafner, Kayak
Hafner also realized early on that coupling the search and purchase features in a single place meant that neither could be maximized: If you showed only the flights you were able to sell, consumers inevitably would leave to see what else was available--and they wouldn't come back to buy from you. "We saw that it was silly to bolt together 'Here's the information' and 'I'll sell you a ticket,'" he says.
That was the impetus for Kayak, which Hafner founded in 2004 with ace code-writer Paul English. It brought to the travel industry the Google model of attracting enough search traffic to entice a critical mass of advertising. By merely listing information and then sending consumers to websites where they could finish their transactions--Avis or Hertz, United or Delta, Orbitz or Expedia--the number of employees involved in the process could be minimized. The software did all the work. And with nothing being sold, there were no customer-service issues to address. "Our goal," Hafner says, "was to create the world's best travel website with the fewest people." (As of 2011, bookings can be made directly through Kayak, but the service is handled by a third party and offered as a convenience rather than a selling point.)
That has made Kayak wildly profitable. Priceline, which owns Booking.com and several other travel sites, started courting the company several years ago, but agreeing on a real-world valuation of Kayak was difficult until Hafner launched an IPO in 2012. Soon after, the two sides negotiated the $1.8 billion sale on their own. "It might actually be the largest deal ever done without an investment bank," Hafner muses.
Priceline is little more than a holding company that operates its businesses independently. It displays their logos on its letterhead in order of profitability, and Hafner is determined to get Kayak to the No. 1 spot in the far left-hand side. But what drives his continuing interest in the business is the unique opportunity he perceives for the brand: to consolidate all aspects of a consumer's trip under one umbrella and use new technologies to make travel more efficient.
"We already have the critical mass of information," he says. "We have the app on the phone. We know who you are and, through GPS technology, we know where you are. It makes sense for us to connect it all."
So if you've searched for a room through Kayak and booked it using the flow-through software, why not get your room key delivered to your phone as you approach the hotel and avoid the check-in process entirely?
"We already can send you boarding passes when you arrive at the airport," Hafner points out. "The airlines have asked us not to, so we don't, but it's technically possible today. And that's just the beginning." Having founded the company on the principle of decoupling, he now sees a reason to start putting the pieces back together.
Such ambition helps explain Kayak's spartan office space. "We've been through something like five different buildings in Connecticut in less than 10 years," Hafner says. "We keep outgrowing them. I have a feeling this isn't the last one."
Travel Company of 2014: Surf Air
All-you-can-eat Flights
"Ninety percent of the airports in America are operating at less than one-third their capacity," says Wade Eyerly, founder of Surf Air. "More than half are operating at less than 10 percent. We joke that on their way to 'the' airport, most people pass two or three other airports. So we're taking advantage of the most overbuilt infrastructure in America."
Santa Monica, Calif.-based Surf Air--which services four California airports and recently announced expansion plans to Las Vegas and Lake Tahoe/Truckee, pending FAA approval--opened for business last June. But utilizing Pilatus PC-12 executive aircrafts and regional airports such as San Carlos, neatly positioned between Palo Alto and San Francisco, isn't even the most innovative aspect of Eyerly's concept. It's Surf Air's subscription model--starting at $1,599 per month for unlimited flights--that may change the way executives travel, which is something almost everyone who ever steps on a plane agrees would be a good thing.
"When you look at satisfaction among consumers, airlines rank dead last," Eyerly says. "They're literally the only thing you hate more than your cable company."
The Surf Air team--including new CEO Jeff Potter, who formerly ran Frontier Airlines--has identified more than 50 U.S. metropolitan areas as potential routes. To frequent-travel clusters such as Dallas-Houston-Austin-San Antonio and New York-Washington, D.C.-Philadelphia-Atlantic City, N.J., the airline is eyeing upscale leisure corridors such as Boston to Martha's Vineyard and New York to the Hamptons. "In all, we believe this is a $2 billion, 300-aircraft opportunity," Eyerly says. "There are 15,000 airports in America that can fit an aircraft of our size, so there are a lot of places we can go."
He started last June by grabbing a piece of one of the busiest air routes in America: Los Angeles to San Francisco. The fact that his airline uses small airports as access points--San Carlos, Burbank, Santa Barbara and Hawthorne--rather than LAX and SFO, is something he perceives as a major advantage. So is the fact that his customers do not have to pass through a security screening, since nobody steps onto a Surf Air plane who hasn't passed a background check as part of the subscription purchase.
The result is a far more efficient travel experience, equivalent to flying on a private plane but at a fraction of the cost. "Depending on how you value your own time," Eyerly says, "this becomes a very big win for you." Based on the average round-trip fare between Surf Air's markets, three trips per month means a cost savings.
The catch is committing to more than $5,000 worth of flights with the initial 90-day subscription. (After that, Surf Air operates on month-to-month contracts.) So far, the retention rate has been near
90 percent. "We've seen 16 people leave," Eyerly says, "but all were because of reasons like, 'I left my job, so I'm not commuting anymore' or 'I married the girl I was flying back and forth to see'"--not, he stresses, because of dissatisfaction with Surf Air.
We're taking advantage of the most overbuilt infastructure in America. --Wade Eyerly, Surf Air
A former security and intelligence officer with the U.S. Department of Defense, the NSA and other government agencies, Eyerly first hashed out the Surf Air concept with his brother, an operations manager for Frontier, in 2006. About five years later, both had left their jobs and started the company, which has been helped along by an investment from Tony Hsieh's VegasTechFund.
Growth has been purposefully slow because buying new planes is severely cash-intensive--but also because nobody knew in advance how frequently customers would travel if taking another flight cost them nothing more than airport parking. "The critical challenge in running an all-you-can-eat buffet is not running out of food, right?" Eyerly says. "We were very careful to make sure we didn't make more spots available than we could handle."
They sold out their first 150 subscriptions in 10 days. Eyerly left as CEO in late February (he retains equity in the company), in part because of the opportunity to hand the reins to the vastly experienced Potter.
"There's such significant growth opportunity here, not only in California and the Southwest but in a wide range of geographical areas," says Potter, who oversaw Frontier from 2002 to 2007. "We're still in stage one of what I consider will be a 50-stage enterprise. I'm not here to run three little airplanes. I'm here to take those three little airplanes and grow this to a grand scale."
Best New Hotel: The Langham, Chicago
An Exclusive Club
From an Eames chair in the 13th-floor Club Lounge of the 9-month-old Langham hotel, which sits on the Chicago River between State and Wabash in the heart of downtown, a glimpse of Lake Michigan is framed by the Trump International Hotel & Tower to one side and the Hotel Monaco to the other.
Within a mile sit a Peninsula, Four Seasons, Ritz-Carlton, Waldorf Astoria, JW Marriott, Radisson Blu Aqua and the flagship Park Hyatt, along with numerous boutique options.
With so many top brands clustered into such a small area, Chicago's Near North Side and the area around it has emerged as America's most competitive hotel market for luxury business. Nowhere else--not in Manhattan or Beverly Hills or San Francisco's Financial District--is competition for the same rarefied sliver of the business-travel category quite so fierce.
The Langham, only the fourth North American property from that Hong Kong-based chain, vaulted to the top of Chicago's TripAdvisor rankings soon after its September opening. Actually, says Robert Schofield, the hotel's managing director, "108 days--but who's counting?"
While only a minority of Langham guests have access, Schofield believes the Club Lounge is the single most important factor. Unique to Chicago, it melds the efficiency of a working office with the feel of a private club. "More than anything else," Schofield says, "it sets us apart."
For a daily upgrade of $100 per person, access to the Club Lounge includes breakfast, a buffet and evening appetizers; two hours of boardroom use; clothes-pressing on demand (for three items); showers and changing rooms for early arrivals or late departures; supercharged Wi-Fi; and free-flowing wine and cocktails.
Butlers are on hand to handle everything from shoeshines to sourcing hard-to-find business supplies or an executive's favorite snack. Nooks facilitate private meetings and conversations. The views are magnificent. For the entrepreneur on the go, all that's missing is the venture capitalist.
"One of Langham's goals is to redefine the club-room concept, which had become a little tired," explains Rose Genovese, vice president of sales and marketing for North America. "Chicago is a prototype."
The rest of the hotel is spectacular enough. Set in the lower floors of a Mies van der Rohe-designed skyscraper, a designated city landmark that was repurposed from IBM offices, The Langham manages to be luxurious without feeling overly opulent. Each of the 316 rooms has a travertine limestone bathroom with soaking tub, a sweeping view of the city below and décor with a light touch.
"Everything is exactly where it needs to be," Genovese says. "The lighting is simple. The technology is simple." The hotel feels youthful but not young, businesslike but warm, sexy but never inappropriately so. "Audrey Hepburn," Schofield quips.
A David Rockwell-designed restaurant, Travelle, serves Mediterranean-inflected small plates and meals. Afternoon tea, a carry-over from the original Langham, which opened in London in the 1860s, is an ornate production held in a light-filled riverfront atrium. A spa focuses on Chinese wellness techniques. A ballroom, screening room and boardrooms can accommodate meetings of nearly any size.
The hotel feels youthful but not young, businesslike but warm, sexy but never inappropriately so. --Robert Schofield
The level of personalized service rivals that of the nearby Peninsula, the industry standard. From the moment you pull up at The Langham and identify yourself, you'll be called by your name--even by the employee manning the fitness center. "We pride ourselves on knowing the exact preferences of each of our guests," says Carlos Carrera, the hotel's head butler.
It's enough to make guests wonder where The Langham has been all their lives. After rebranding Boston's Le Méridien in 2003 and Pasadena, Calif.'s historic Ritz-Carlton Huntington in 2007, the company has added only a lower-tier Langham Place in New York to its North American portfolio. Just nine other full-fledged Langhams exist in the world, in Asia and Oceania, as well as in London.
The company claims to be seeking a similar growth trajectory to Ritz-Carlton and Four Seasons but has struggled to find suitable locations. In Chicago, the opportunity to design a hotel from scratch to fit 13 floors of an iconic building proved too exciting to pass up, even with the competition in the neighborhood.
"We're looking to be in gateway cities," Schofield says. "San Francisco, Miami and Washington, D.C., are some of the names on our list. To do so, we need the right opportunity in each place."
Best Reemerging Destination: Atlanta
Entrepreneurial Renewal
For decades, the self-proclaimed "City too busy to hate" was the city too busy to do anything. Traffic snarled I-75 and I-85, the main north/south arteries. Getting across town meant a succession of crowded, two-lane roads. Once-charming Buckhead was overgrown with national chains, and the best of the city's hotels were generic. Atlanta's growth had given it all the charm of a shopping mall, but with none of the convenience.
"For much of Atlanta's past, we were chasing somewhere else," says Kasim Reed, who has served as mayor since 2010 and was reelected last year by a wide margin. "We were a small town with a bit of a chip on our shoulder."
A turning point was the 1996 Olympic Games, which--in any logistical or organizational sense--failed miserably. That led the political and business communities to realize that Atlanta wasn't going to be the next London or Tokyo, at least not in their lifetimes--and perhaps that wasn't such a bad thing. For the first time since the 1960s, the city scaled back its ambition. "Before, we were trying to be a small Manhattan or Washington, D.C.," Reed explains. "When you sat in a meeting, you'd always hear references to other places. You don't hear that anymore. Over the last 10 years, we've become comfortable enough in our own skin to just try to be the best version of ourselves."
The result is a city with a rejuvenated downtown, hip neighborhoods in former industrial districts, a dining scene featuring creative versions of traditional Southern food and a new wave of benchmark hotels. (In recent years, the city has gained singular versions of St. Regis, Mandarin Oriental and Loews properties, as well as compelling boutiques such as the Ellis, Artmore and Glenn.) The BeltLine, a redevelopment of 22 miles of old railroad tracks, is continuing to push its ribbon of parks, transit options and trails into new neighborhoods and has emerged as a national model for urban green space.
Given that renewal, perhaps it's no accident that an entrepreneurial scene is suddenly thriving. The city that gave us Coca-Cola and Ted Turner hadn't been a major player in the tech revolution. But David Cummings, a young Floridian who sold the business-to-business software company Pardot for nearly $100 million, felt Atlanta was primed for innovation. A year ago he bought a building on Piedmont Road and established Atlanta Tech Village. For about $400 per employee per month, companies both small and smaller get furniture, internet, events, workshops, snacks and a startup community in which ideas regularly cross-pollinate. His tenant list now includes 155 companies, some as small as a single person, and is growing by the month. It wouldn't have worked a decade ago when he arrived in Atlanta, Cummings acknowledges. "But the city has changed," he says. "All of a sudden, there's a broad base of startups in town."
On a recent afternoon, Mayor Reed visited Tech Village for the first time. In a conference with a half-dozen of the most successful entrepreneurs, he stressed his determination to make the city even friendlier to small businesses. His goal is to create a pocket of venture capitalism where entrepreneurs can pitch representatives of leading national firms. "As you build new businesses," he says, "you're going to have someplace for your ideas to go. Once you all educate me, I can do the messaging. I can get the message out."
Though a January blizzard exposed weaknesses in Atlanta's response to inclement weather, sending video images worldwide of hundreds of cars sitting motionless for hours on area highways, the travel infrastructure has improved somewhat in recent years. The MARTA mass-transit system services half a million riders daily. And in Hartsfield-Jackson, the busiest airport in the world, some concourses have been renovated and are filled with enticements, including the best restaurant in any American airport.
That eatery, One Flew South, isn't part of a chain, nor even an airport spinoff of a successful concept in the city. Rather, it's an ambitious one-off that's run as a restaurant would be in an upscale part of town. In its commitment to innovative versions of regional food, seen in dishes like thyme-roasted pork belly and bacon-and-goat-cheese salad, One Flew South represents Atlanta's determination to be nothing more than itself. "This isn't airport food; it's Atlanta food," executive chef Duane Nutter says. "It is a perfect representation of the new Atlanta."
