Travel Operators Try New Tactics To Lure Leisure Travelers

The travel market is an unusual space to watch in terms of its recovery and how lopsided it is in many directions. Domestic consumer travel in the states, Hopper CEO Fred Lalonde said, has roared back with a vengeance and appears by all accounts to be in the midst of powerful super-cycle right now, created by a combination of pent-up demand, unspent consumer savings and an infusion of stimulus funds.  In fact, within hours of the third round of stimulus payment starting to hit bank accounts, Lalonde said, demand surged on Hopper’s popular travel platform and delivered its busiest day ever.

According to Lalonde, the data show that a very healthy domestic and short-haul international travel trend (to places like the Caribbean and Mexico) is happening in Hopper’s primary market. Specifically, total bookings this year are up 126 percent, not versus the trough of 2020, but versus 2019.

“So that is more than double,” he said. “What you’re seeing is people didn’t have the opportunity to travel around in 2020 and stayed home. They’re basically in a super-cycle in terms of purchases right now.”

That super-cycle, he said, is obscuring the other less-encouraging areas of the market. What would normally be a 50-50 split between domestic and international travel is now more like an 85-15 percent split. That abnormally wide split, however, is showing some signs of abating as more global destinations re-open, as seen via searches Hopper is recording on its app.

Business Travel Still Stalled

More attention-grabbing, he said, is the softness in business travel’s recovery and the long-term implications that will have for the industry as a whole. Normally business travel accounts for roughly half of the travel bookings made in the U.S., but accounts for more than two-thirds of airline and hotel revenue due to the outsized spending habits of the working set. This rift, Lalonde noted, had been to the consumer’s benefit over the last several decades, with airline tickets actually declining in price instead of increasing like all other goods and services.

“A lot of those super-cheap airfares benefiting customers from over the past decade, were subsidized by business travel,” he said. “Now, if business travel doesn’t come back to a hundred percent, that means that the business model of airlines and hotels is going to have to evolve.”

Raising prices is an option, of course, but one unlikely to delight consumers — which means travel brands are going to need to think differently and more innovatively about how they capture revenue going forward.

Because while a super-cycle in consumer travel is more than balancing out the difference now, he said, the pressure is on to find ways to capture new revenue out in the market.

That’s one of the main reasons, Lalonde said, that Hopper has recently released Hopper Cloud to other players in the travel market.

Bringing Data To The Market

While Hopper has traditionally been a consumer-facing outfit, the firm is making its first foray into the world of B2B with the launch of Hopper Cloud, which will offer other travel industry players a glimpse into its data as well as the ability to transmit those insights alongside Hopper’s other tools to their own customers.

“We are starting to offer our financial products and features, which are things like price, freeze, disruption, protections, flexible dates to other providers of travel,” he said. “But it’s for online travel agencies, anybody who runs a loyalty program, airlines, hotels — it’s a cloud-based version of everything that made the Hopper app so useful and interesting on the FinTech side for our customers.”

The firm is taking a play from the Amazon book, he said, attempting to do what the eCommerce giant did when it opened up Web Services using Amazon’s infrastructure to power other businesses.

Hopper, he said, is using its unique FinTech products and starting to offer them through other distribution channels that sell travel to consumers. Because travel, he said, is recovering and will continue to do so — but it may not come back quite the way it was before.

“The fundamental reason we put Hopper Cloud out there is to actually help players capture that new revenue and share it with everybody who sells travel,” Lalonde said. “To us, the main focus is getting all that data to market.”