Hopper Races to add new travel services

As COVID-19 comes and goes and a sustainable reopening for business and leisure remains shrouded in uncertainty, at least one thing has become clear; People everywhere are eager to pack up, get out and travel again.

“The one thing this pandemic has proven is that people want to travel and they will as soon as they can,” Hopper co-founder and chief executive Fred Lalonde said in an interview with Matt Nesto of PYMNTS.

Hopper, which started as a simple airline ticket price prediction app, believes it can benefit from this trend, as well as the extra money people have in their wallets, by creating a whole new set of financial services. included in their travel reservations.

“When someone buys travel on Hopper, they spend an average of $50 more than if they bought the same product elsewhere,” he said. “That’s because 60% of people who book on our app also add a FinTech product. When you throw in extra cash like that, you can do a lot with it.

have a nice trip

Hopper’s Montreal business isn’t the only growing source of funding. Last week, it raised $175 million in a late-stage Series G funding round led by GPI Capital, with participation from Glade Brook Capital, WestCap, Goldman Sachs Growth and Accomplice.

See more : Travel FinTech Hopper Closes $175M Series G

That’s money the company plans to use as it pursues new verticals spanning nearly every space associated with travel, including short-term vacation home rentals, activities and experiences and business trips.

Hopper has made a name for itself with airline ticket reservations, offering price freeze services that allow consumers to lock in a lower price for their tickets and then expand to protection services such as cancellations and refunds. .

“We take non-cancellable tickets and non-refundable tickets and make them cancellable and refundable, for a fee,” Lalonde explained. “But the fastest growing service we offer is disruption protection. So if your flight is delayed or you miss it for any reason, we can rebook you on the next most convenient flight from that airport, even if it’s a different airline.

Transformation of travel

But it was the shift to hotel reservations and car rentals that really sparked Hopper’s latest growth spurt, Lalonde revealed.

“This is probably the most significant transformation of our business model,” he said. “These products now account for around 50% of our travel bookings. And all we’ve done is apply the same principles we’ve applied in the air, which is to always look for the lowest price. Around 50% of the hotels we offer are now cheaper than what you can find on the web.

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Hopper has also recently expanded into the B2B realm with its new Hopper Cloud initiative, which makes its travel FinTech products available to any third party looking to sell travel services. That, too, was a resounding success, Lalonde told Nesto.

“It turns out that if you’re in the middle of a pandemic where everyone’s income is down and you can go up to them and ask them if they’d like to make an extra $50 per booking, unsurprisingly, the answer is always yes,” he said. noted. “The Hopper Cloud offering has grown like crazy and we’ve signed customers on every continent. It is an extremely successful initiative.

Airlines regularly charge a fee for what was free, and Lalonde explained that Hopper had become the first fintech startup to find a way to squeeze more money out of the average traveler since online bookings became a thing.

“You can go back to 1994 when the first ticket was sold on Travelocity. Everyone fought for a discount of the same $340 transaction,” he said, referring to average airfare spending online. “Basically, customer spend stayed constant until we added these features.”

Lalonde thinks he can entice travelers to spend even more. He spoke of an upcoming ‘supercycle’ that has been slated for domestic air travel in the United States, Europe and China, noting that people are desperate to get out and travel again after spending most of for the past 18 months locked up in their homes.

“As people can go back to places like Florida, Louisiana when it becomes safe again, you’re going to see people travel,” he insisted.

Read more: Air travel increases in May but still below pre-pandemic levels

Business travel will also rebound, Lalonde said, beating his own earlier prediction. He told Nesto that a year ago he was convinced the rise of Zoom and video conferencing would spell the end of business travel, only for that segment to return to near pre-pandemic levels until to just a few weeks ago, when the delta variant of COVID-19 set things back.

“I think we’ve underestimated how much people want to travel to do business,” he said. “I think travel is intimately linked to business culture.”

If Lalonde is right about the re-emergence of business travel, Hopper stands to benefit greatly, he said. Although currently 90% of its bookings on the app are for leisure travel, that is changing.

“On the Hopper Cloud side, we have customers who are on the business travel side that we’re talking about as well, so you’re going to see that change,” he said.

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Another major goal for Hopper is to make acquisitions to drive expansion into new markets and segments. The company is currently charting a course into international markets.

Mr. Lalonde said he views acquisitions as an essential part of the company’s growth strategy. Its new home rental offering, for example, was launched after the acquisition of a New York-based startup called Journey.

“The way we launch new businesses is that we always put great leaders in them,” Lalonde said. “Hopper Cloud and Hopper Cars were both built by teams we acquired. We love when people start their own business because it always leads to better results. It’s a great way to fuel the furnace of innovation.



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Willie R. Golden