Booking Holdings and Hopper are attacking travelers’ anxieties in wildly divergent ways. Booking is trying to soothe them, while Hopper doesn’t mind a little angst if it means more fintech revenue.
Online Travel This Week
Booking Holdingslong established as the largest online travel company, and Hopperthe up-and-comer, both want travelers to enjoy peaceful, problem-free trips, but while Booking wants travelers to rest assured throughout the journey that it would come to the rescue, Hopper doesn’t mind if travelers fret a bit before departure about all the ways that things might go wrong.
Consider that Booking Holdings sold 11 million flight tickets in more than 40 countries during the first six months of 2022, up from 4 million in the first half of 2019, according to Chief Financial Officer David Goulden. Some 5 percent of those flight bookers are new customers, and many are also booking hotels and homes.
It’s all part of Booking Holdings labor-intensive and multiyear “connected trip” strategy to make travel more seamless, and to spur loyal customers who keep coming back directly to spend an increasing percentage of their travel budgets with the company.
Anxiety be damned is an inferred part of this strategy because Booking hopes to be the one-stop shop, and the modern-era travel agency that jumps in as a trip problem-solver. The ultimate vision is to automatically rebook missed flight connections for flyers, and to inform hotels if the guest might be waylaid or late, or might not even appear until the next day because of a disrupted flight.
On the other hand, Hopper is making a ton of money — OK it isn’t profitable but claims its sales are up four-fold year over year and will reach $4.5 billion in 2022 — in playing on consumer fears that airfares or hotel rates might soar.
This is all part of Hopper’s so-called fintech strategy. For an upfront fee, Hopper customers can freeze airfares or hotel rates for a certain period, cancel an airline or hotel reservation “for any reason, or even leave a hotel stay on any whim even after the traveler checked in.
These type of fintech sales now account for about 30 percent of Hopper’s revenue globally — perhaps $1.3 billion annually — including 50 percent of flight revenue.
Hopper then takes some of this fintech bonanza and uses it to lower airfares, hotel rates, or car rental prices to entice its customers to keep coming back for more.
Booking Holdings, too, is leaning into doing more “merchandising,” or discounting, to build loyalty. For some upper-echelon members of Booking’s Genius loyalty program, the company is providing free taxi rides to and from the airport. That’s beyond the discounts that hotels and other suppliers are already providing Booking’s customers.
Booking.com’s connected trip strategy seems to be more difficult to execute and protracted than Hopper’s. Booking’s strategy involves taking more bookings through its home-grown payments system, scaling its flights product globally, and building out its “alternative accommodations” business, which recorded 25 percent more room nights in the second quarter than during the same period in pre-pandemic 2019.
Hopper would argue that no other company can mimic the effectiveness of the algorithms it uses to hedge its fintech risks and that it is taking market share from the incumbents, but Booking might counter that the connected trip would trigger deep and enduring growth.
I’ll address the “anxiety factor” and separately interview their respective CEOs, Glenn Fogel of Booking Holdings and Fred Lalonde of Hopper, at Change Global Forum next week in New York City.
Booking.com Will Likely Get Labeled a Gatekeeper
It appears as though the European Commission would ultimately label Booking.com a gatekeeper when it comes to European hotel bookings, but a recent commission report cast doubt on the impact of such a designation. Skift
JetBlue Venture Arm Invests in Property Manager Frontdesk
JetBlue Technology Ventures participating in Frontdesk’s $13 million financing round as the property manager tries to expand in some of the second-tier-city markets where it already has a presence. Skift
UAE Seems Great Demand for Short-Term Rentals
Tourism in the United Arab Emirates is booming, and part of it is fueled by demand in short-term rentals as guests seek affordable stay options, including for remote work. Skift