Skift Travel News Blog

Short stories and posts about the daily news happenings around the travel industry.

Online Travel

Hopper Attracts a $96 Million Investment From Capital One in Partnership Expansion

4 weeks ago

Capital One, which led a $170 million investment round in travel app Hopper in 2021, has added $96 million to the kitty, and the companies announced a long-term partnership between Hopper and Capital One Travel.

Hopper CEO and co-founder Frederic Lalonde
Hopper CEO and co-founder Frederic Lalonde in discussion with Executive Editor Dennis Schaal. Source: Skift

“Following the success of Capital One Travel, Hopper and Capital One are announcing an extension to their partnership as a way to continue creating best-in-class, intuitive solutions that make all parts of the travel journey seamless for customers,” Hopper’s announcement stated.

Hopper powers Capital One Travel, and Hopper also offers an array of fintech products, such as price freezes on flights and hotels, for an array of other partners.

Hopper claims to the the third largest online travel agency in North America, and to command 11.2 percent of third party flight bookings in the U.S., citing Marketing Information Data Tapes figures.

“The funds will be used to accelerate the company’s growth across several fronts including fueling its new social commerce initiatives,” Hopper stated.

Hopper has raised around $730 million in total funding.

A Hopper spokesperson declined to elaborate on Capital One’s equity stake in Hopper.

Online Travel

Hopper Partners With Vacation Rental Management Platform Hostaway

2 months ago

Online travel agency Hopper has entered into a partnership with short-term rental management platform Hostaway, an alliance that Hopper believes will boost its short-term rental brand Hopper Homes.

“Partnering with Hostaway allows us to bolster our high-quality inventory, and helps us deliver on our promise to provide the best booking options at the best prices,” said Susan Ho, head of Hopper Homes, which Hopper launched in January 2022.

Short-term rental property managers using Hostaway will be now able to list their properties on Hopper.

“We work with many property managers in the U.S., which is Hopper’s main market, so it benefits both companies to team up on this integration,” said Marcus Rader, the CEO and co-founder of Hostaway. “We’re excited about the possibilities this will bring to our customers.”

Hopper, which is the third largest online agency travel agency flight booker in the U.S. between behind Expedia Group and CheapOAir, is already partnering with vacation rental booking brand Vrbo.

The inside of a house
Hopper is making further inroads in the short-term rental market through its partnership with Hostaway (Courtesy: Medeu71/pxHere)

Travel Booking

Hostelworld Projects Return to Profit After New Social Networking Feature Slashes Ad Spending

2 months ago

Online travel agent Hostelworld is predicting a return to profit by the end of this year, thanks in part to its app’s new social networking feature, which it launched in April

The company struggled through the pandemic, which shut down large parts of core market Asia, as backpackers avoided hostel dormitories. In 2021 it reported a loss of $36.7 million in 2021. 

But in a trading update on Oct. 12, it said it was well positioned for “profitable growth” after a new social strategy produced more sales, and lowered marketing costs.

“Since launching our innovative and differentiated social network strategy earlier this year, we have seen strong growth week over week in the number of customers signing up to our app based social platform when they make a booking with us,” the company said.

In particular its “Solo System” helps solo travelers meet other guests. As of the end of September, almost 50 percent of all its customers had signed up to the platform, driving a significant increase in the volume of bookings.

Bookings in September reached 83 percent of 2019 levels, and were also boosted by the continuing recovery of Asia and Oceania regions, which were now at 70 percent of 2019 levels, up from 43 percent in June, Hostelworld said.

Net revenue in September reached 104 percent of 2019 levels.

“Social strategy is delivering margin growth well ahead of expectations, with marketing as a percentage of net revenue expected to improve from 70 percent in the first half to approximately 55 percent in the second half,” it added.

It now expects to end the year “modestly EBITDA (earnings before interest, taxes, depreciation and amortization) positive and with a stronger cash position than originally expected.”

“I am very pleased with the positive trends we are seeing from our innovative ‘Social’ strategy which is driving more customers to use our apps, and reduced marketing as a percentage of net revenue,” said group CEO Gary Morrison.

“Socializing” a travel booking app has also worked for Hopper. Speaking at Skift Global Forum in September, CEO Frederic Lalonde said the company had slashed its marketing spend, after becoming TikTok’s biggest spender on advertising in 2021 in the U.S.

“Today, our paid spend is almost at zero. We are giving the same money we gave to Mark Zuckerberg and TikTok to our customers in the form of tree watering games,” he said.

Travel Booking

Citi Is Developing a Travel Platform with Booking.com

3 months ago

Financial services firm Citi is launching Citi Travel later this year. The travel booking platform will be powered by Booking.com and its Rocket Travel subsidiary.

The portal is set to replace its existing City Thank You Travel Center website, and will offer hotel, air, and car hire options.

“Leveraging the scale and range of Booking.com, the new Citi Travel provides an unmatched breadth of hotel reservation options,” the companies said in a joint statement. “With more than 1.4 million hotels available worldwide — ranging from boutiques to beloved chains — there is the right option for every budget, vacation type and preference.”

Banks are continuing to develop travel products to gain more loyalty from their customers, giving them more options to spend their points. Capital One has recently invested in Hopper as well as private jet startup Aero.

Earlier this year, JP Morgan bought luxury travel agency Frosch, while in Nov. 2021, U.S. Bancorp acquired Will Smith-Backed TravelBank for $200 million.

Airlines

Jet Startup Aero Raises $65 Million to Grow Its Network

4 months ago

Semi-private jet company Aero has raised $65 million in funding to expand its network, and to service demand on existing routes.

Currently it operates flights to Aspen, Los Cabos and Sun Valley from private terminals in Los Angeles and San Francisco in the U.S, as well as Ibiza, Mykonos, and Nice from London’s Farnborough Airport

The Series B round was co-led by Albacore Capital Group and returning investors Expa and Keyframe Capital, as well as new investment from Capital One Ventures (which last year invested in popular booking app Hopper.)

Unlike other jet services, Aero aims to stand out by focusing on connecting millennials with destinations that offer Instagram-worthy experiences. It owns and operates its aircraft, and sells individual seats on flights to leisure destinations around the world.

Aero CEO Uma Subramanian formerly worked on Airbus’ helicopter service Voom.Flights, which closed down in 2020.

The startup previously raised $20 million in Series A funding in March last year, and before that $16 million in 2019.

CORRECTION: An earlier version of this article described Aero as a private jet company, and said it did not own or operate its own aircraft, and provides ticket resale for flights on registered air carriers on selected routes

Airlines

Lonely Planet on Summer Travel: Cope, Don’t Cancel

5 months ago

You’ve seen and heard the horror stories of travel plans gone awry in May and June, and now Lonely Planet is stepping up with advice for travelers that skittish travel businesses would welcome: “DO NOT let the threat of a cancellation keep you home. It’s been a long pandemic. It’s time to get out there again.”

Madrid Airport
File photo of Madrid Airport. Unsplash.

In an email, Lonely Planet said that is the counsel from its editor-at-large, Sebastian Modak.

Among Modak’s tips:

  • Research a specific flight’s past performance to see if it is prone toward delays and cancellations.
  • Be on the lookout for news about endless security lanes and baggage gone missing.
  • Think about doing domestic trips instead of traveling abroad.
  • Try not to avoid holiday or even weekend travel.
  • Consider alternative airports that may not be as popular.
  • In the U.S., consider Amtrak, which has increased its schedules, instead of flying.

Meanwhile, with all of the angst out there because of disrupted travel plans, online travel company Hopper reported that purchases of its flight protection products, which provide certain safeguards to thwart delays, cancelled flights or missed connections, jumped 28 percent over the last month.

On the other hand, in China, where Covid lockdowns have been intense, staycations in local hotels have become a trend. That might not be a bad idea for the less-adventurous among us.

Airlines

Hopper Forecasts 12.9 Million U.S. Flyers Over July Fourth Holiday

5 months ago

The July Fourth holiday in the U.S. kicks off with this week with vacationers expected to begin hitting the road en mass on Thursday. That’s when an estimated up to 2.7 million daily travelers are expected to take to the sky with a robust 12.9 million flyers over the entire long weekend, according to a new forecast from Hopper.

To put the numbers in perspective, the U.S. Transportation Security Administration’s (TSA) busiest day to date since the beginning of the pandemic was June 26 when agent’s screened 2.46 million people. Hopper’s estimate sees almost another 300,000 flyers traveling through airports across the country on Thursday and Friday, and an average of 2.6 million daily over the long weekend — or the five days from June 30 to July 4 — even as airlines and airports are already struggling with the surge of summer travelers.

(Hopper)

“With flight delay and cancelation rates well above 2019 averages, travelers should prepare for potential disruptions traveling over the long weekend,” Hopper said. However, with many airlines proactively cancelling flights ahead of time, the number of delays has decreased in recent days.

The busiest airports are of no surprise: Atlanta, Dallas-Fort Worth, and Denver — mega-hubs for Delta Air Lines, American Airlines, and United Airlines, respectively — top Hopper’s list. Los Angeles is also forecast among the busiest.

Airlines

U.S. Airfares Drop For First Time in 2022

6 months ago

The steady runup in ticket prices for flights in the U.S. this year appears to have come to an end. New data from Hopper found that average domestic fares have fallen by $20 to $390 since mid-May.

“Demand for domestic travel, which has been surging since late January also slowed in May, plateauing in line with airfare prices,” Hopper wrote Wednesday. However, the travel booking site noted that this is common as new bookings in mid-June begin to shift to fall trips that are after the summer travel peak ebbs in August.

(Hopper)

In addition, despite the $20 drop — the first since the beginning of the year — U.S. domestic airfares remain roughly 18 percent higher than at the same time in 2019. International airfares are up 22 percent year-over-three-years.

(Hopper)

Staffing, fleet, and other issues limit how much more U.S. airlines can fly. Most carriers, including the Big 4 — American Airlines, Delta Air Lines, Southwest Airlines, and United Airlines — have either cut flights to mitigate disruptions, or loaded schedules with fewer flights than they had planned at the beginning of the year. The situation is expected to ease in the fall and winter when there is less travel demand, and training backlogs shrink.

Online Travel

Hopper Fintech Products Now Being Bought by 70 Percent of Its Ticket Bookers

7 months ago

A fascinating interview with Hopper founder and CEO Frederic Lalonde on A16Z’s Future, with a deep dive on his thinking about superapps in travel and Hopper’s potential path into becoming one. In it, a nugget that now 70 percent Hopper’s revenues are coming from their add-on fintech produces, AND 70 percent of ticket bookers through Hopper’s app and site are now adding one or more these products to their shopping cart as part of the buying process, the average being 1.7, according to Frederic.

From the interview:

“With technology, if you’re able to predict things, if you’re able to create a digital experience, in principle, you should be able to cancel out every possible risk that you face when you travel. It turns out that A) you can, and B) that almost everybody has one thing that they worry about when they travel — some people care about prices, others care about arriving on time, some people just are worried the hotel is going to suck. But nobody worries about everything going wrong. Today, at least one of these add-ons are attached to 70% of the travel transactions we sell. When customers buy them, they average 1.7 per booking.”

On his superapp-in-travel ambitions: “I believe it’s a Western anomaly that Amazon isn’t into travel, that Facebook doesn’t sell anything, and that Snapchat does no e-commerce. I think it’s because we’re used to a Western construction for older people that is slowly getting eroded. And just like QR codes, just like text, as people adopt the technologies, we’re going to become more and more Easternized.

It stands to reason that either one of the travel companies will add high-frequency purchases to what they’re doing. We’re one contender for that. Or a high-frequency app that does delivery, like Uber, will get into travel. Or one of the e-comm companies is going to get into travel. It has to end with a couple of companies that offer a lot of things, and travel is just one thing.”

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