As COVID-19 comes and goes and a lasting reopening for business and leisure remains shrouded in uncertainty, at least one thing has become clear; People everywhere are eager to pack their bags, go out and travel again.
“The only thing this pandemic has proven is that people want to travel and they will do it as soon as they can,” said Fred Lalonde, co-founder and CEO of Hopper, in an interview with Matt Nesto by PYMNTS.
Hopper, which started out as a simple plane ticket price prediction app, believes it should benefit from this trend, along with the extra cash people have in their wallets, by creating a whole new set. financial services integrated into its travel reservations.
“When someone buys a trip on Hopper, they spend on average $ 50 more than if they bought the same product elsewhere,” he said. “It’s because 60% of people who book on our app also add a FinTech product. When you throw in extra money like this, you can do a lot of things with it.
have a nice trip
Montreal-based company Hopper is not the only source of growing funding. Last week, it raised $ 175 million in an advanced-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 $ 175 Million G Series
This is money the company plans to use as it pursues new verticals spanning almost every space associated with travel, including short-term vacation home rentals, businesses. and experiences and business travel.
Hopper made a name for itself with airline ticket bookings, offering price freeze services that allow consumers to lock in a lower price for their tickets, then spread to protective 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 some reason, we can book the next most convenient flight for you from that airport, even if it is another airline.
But it was the shift to hotel reservations and car rentals that really kicked off Hopper’s latest growth spurt, Lalonde revealed.
“This is probably the most important transformation of our business model,” he said. “These products now represent around 50% of our travel bookings. And all we did was apply the same principles that we applied in the air, which is to always source at the lowest price. About 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. It was also a resounding success, Lalonde told Nesto.
“It turns out that if you’re in the middle of a pandemic where everyone’s income is dropping and you can go to them and ask if they want to make an extra $ 50 per booking, no surprises. , the answer is always yes, ”he said. noted. “The Hopper Cloud offering has grown like crazy and we have recruited customers on all continents. It is a very successful initiative.
Airlines regularly add fees for what was previously free, and Lalonde explained that Hopper had become the first FinTech startup to find a way to make more money from the average traveler since online bookings became a big deal. thing.
“You can go back to 1994 when the first ticket was sold on Travelocity. Everyone fought for a reduction of the same transaction by $ 340, ”he said, referring to the average price of airline tickets spent online. “Basically, customer spending remained constant until we added these features. “
Lalonde thinks he can coax travelers’ spending 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 the time. of the last 18 months locked inside their homes.
“As people can go back to places like Florida, Louisiana when it gets safe again, you’re going to see people traveling,” he insisted.
Read more: Air travel in May but still below pre-pandemic levels
Business travel will also rebound, Lalonde said, confusing his own earlier prediction. He told Nesto that a year ago he was convinced that the rise of Zoom and video conferencing would spell the end of business travel, only for this 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 for business,” he said. “I think travel is closely linked to business culture. “
If Lalonde is right about the re-emergence of business travel, Hopper will benefit greatly, he said. Although currently 90% of its app bookings are related to 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 making a route to international markets.
Lalonde said he sees acquisitions as a critical 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,” said Lalonde. “Hopper Cloud and Hopper Cars were both built by teams we have acquired. We love when people have started their own business because it always leads to better results. It’s a great way to keep the innovation furnace burning.