Skift Take
Hopper makes more money on add-on, fintech-oriented services than on selling travel — even the usually juicy hotel business. The business isn't profitable but who cares when grabbing market share is on the agenda.
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In online travel, selling flights tends to be a low-margin business, but charging travelers $20 to $40 to freeze airfares or room rates — and dealing with the consequent risk — now that's where the real money is.
Frederic Lalonde, the founder and CEO of Hopper, the app best-known for its flights business, thinks eventually the entire travel industry will awake to what he estimates to be this $200 billion market opportunity in various fintech services.
Lalonde told Skift that around 70 percent of Hopper's revenue these days comes from ancillary products, including price freezes, the ability to change flights for any reason up to 24 hours before departure, a rebooking service, and a price drop guarantee.
Forget about airline tickets: These ancillary/fintech products are even more profitable than Hopper's hotel bookings, Lalonde said.
He said these fintech services — one can debate whether they are really fintech or ancillary add-ons — add around $40 to each