Low-cost travel shopping app Hopper has risen from relative obscurity to notoriety in the past two years: in 2021, its 15 million downloads trailed only Uber, Google Maps and Lyft on the US travel market, according to Apptopia.
But Hopper CEO Frederic Lalonde has a much bigger goal: to become North America’s leading travel “super app.”
“We believe there is no good North American travel app designed to exist as a starting point,” Lalonde said in a recent interview. “And we think the main thing you have to offer isn’t necessarily discovery or all these weird theories that have been tried and failed, like greater social media connectivity. It’s that when you use this app , you know you’re getting the lowest price all the time, so we’re building a complete ecosystem where our customers can just fire up the app and do whatever they need in it.”
Super apps, which provide a single entry point to a wide range of services, made their debut in the Asian market with major players such as WeChat, Alibaba and Grab.
Hopper has started to follow such a path in the travel space by offering reservations for planes, hotels, vacation rentals and car rentals, all through an app only. The company also acquired the digital tours and activities marketplace PlacePass last fall and aims to integrate tours content into the app later this year.
But what particularly excites Lalonde is the company’s suite of unique technical solutions. Hopper is well known for its price prediction algorithm, which advises travel shoppers on the best time to purchase airline tickets. More recently, the company has added financial technology, or fintech, solutions, which Lalonde says have widened the pie in the North American OTA market.
These solutions include the ability for travel buyers who aren’t ready to make a purchase to freeze the price of an airfare, hotel room, or car rental with fees typically included between 5% and 15% of the underlying cost of the product. Then, if the price of the flight, room or car increases, Hopper covers the difference up to a predetermined cap.
Hopper also sells a product called the Flight Disruption Guarantee, which allows customers who miss a connection or whose flights are canceled or delayed by at least one hour to receive a full refund or a free rebooking through the app.
For hotels, Hopper has just released Leave for Any Reason and Cancel for Any Reason solutions. Leave for Any Reason allows guests dissatisfied with their accommodation to choose another hotel of the same star category and Hopper will cover the cost of the rebooking.
Hopper says 60% of its customers currently buy at least one fintech product, which is half of its total revenue. The products generate a profit margin of at least 50%, Lalonde said, far exceeding travel booking margins.
Lalonde says that basically people will pay for security, especially when paired with convenience. On Hopper, he added, customers spend an average of 10% more on travel than on other OTAs.
“It’s because they add these products, which we’re the only ones offering,” he said.
Lalonde said he expects e-commerce in North America, including travel purchases, to follow the pattern of Southeast Asia, where mobile purchases dominate desktop purchases. When that happens, he said, North American travel buyers won’t be willing to search through dozens of websites. That’s why a great application will emerge.
“So the question is, will this be an e-commerce app that sells travel?” Lalonde said rhetorically. “Will it be a travel app that carpools? Will it be a carpool app that travels? But someone’s going to win.”