The Hopper app is a flight and hotel booking tool that helps you find the best prices, including making predictions about when to buy to get the best deal.
Most of us just learn what a travel product usually costs. Then if the price is lower than that, it’s a good deal, jump on it. And if it’s higher, try to understand the reason – a special event perhaps? – and if there’s no good reason, and there’s still plenty of time until travel, wait in case prices drop. I hate prepaid, non-refundable hotel bookings because prices do drop in addition to plans changing.
Hopper serves as good guidance for those that aren’t as savvy or encyclopedic on airline and hotel prices. They’ve come along enough to be closing a series F funding round at $170 million. And Capital One led the round.
In some sense the Hopper price comparison model is a natural extension for Capital One as well, since the bank offers its shopping tool that compares product prices and finds and applies coupon codes. (Capital One acquired WikiBuy two years ago.)
In addition to investing in Hopper, Capital One is partnering with them on a new Capital One Travel tool for their card customers expected to launch late this year.
They promise Hopper-style price prediction and pricing alerts, as well as “products and servicing capabilities to help customers easily change or cancel their reservations.” If their bookings are somehow more flexible than what you’ll find elsewhere that could be interesting. And the portal will provide for points-earning on paid travel (presumably rebating the commissions earned in some fashion) and for redemption as well. Perhaps they’ll offer better redemption deals through their portal than through their standard flexible ‘purchase eraser’ which lets you redeem for travel charges.
Whether a travel portal is worthwhile or not though depends on how they address the standard shortcomings that you find, either from online travel agency websites like Expedia or from credit card rewards booking sites.
- Customer service is poor. You haven’t lived a stressed out life until you’ve spent an hour on hold trying to reach a live person at Expedia. That person in the outsourced call center can’t help you. So they put you on hold to speak to someone. If they come back before you get cut off, they might even transfer you to someone – whom you have to explain your issue to all over again. Don’t believe them if they promise to call you back.
- You’re not getting better pricing. Third parties don’t generally have better airfares than booking directly, although it’s possible that one site may price a complicated fare differently than another. Hotels insist you pay slightly more to book through an online booking site.
In fairness you may not start out knowing you want to book the Hilton, or fly Delta, but why not go to a comparison site (Google!) to figure that out, and then book directly through the provider you want to travel with.
- You don’t get hotel elite status credit or benefits and don’t earn points. You’re not generally saving money on the hotel and in a sense it costs you more too – since you’re giving up earning points with the hotel loyalty program. You’re also not supposed to get elite benefits like upgrades, and the stay isn’t supposed to count towards earning status either. (You may also be assigned to a lesser room, booking the Marriott Key Bridge across from D.C. through a third party used to mean getting a dilapidated motel-style room at the back of the property.)
- There isn’t very good guidance on what you should book. A travel agent is supposed to guide you towards making the best travel decisions for your specific needs. Should you book that 40 minute connection in Chicago during winter? What hotel best matches your needs? But Expedia may even be showing you hotels based on ad revenue, not what’s best for you.
- You’re in bad shape when bookings turn south. You have a third party between you and the travel provider. That increases the risk that things go wrong. You may be at the bottom of the pecking order if a hotel is overbooked. When schedules change it can be harder to get rebooking assistance or tickets reissued.
- Try getting a refund. Even when airlines were willing to refund tickets for cancelled flights during the pandemic, online travel agencies frequently refused refunds. If they refunded tickets they’d have to give up the commissions. So they held onto your money.
It’s too early to say how Capital One and Hopper will handle these issues, but there’s potential if done right. I used to like booking through third parties for shopping portal benefits and the portal’s own loyalty programs, but those aren’t as rewarding as they used to be and the complications have become much more significant.
Hopper did launch consolidator fares with several international airlines three years ago in order to offer prices below published fares.
And in the hotel space, websites that are ‘members only’ can circumvent hotel chain best rate guarantees – obtaining lower prices from individual hotels. If the Capital One booking site, restricted to cardmembers, is used this way that could be interesting indeed.
They can offer increased redemption value by rebating commissions. And if there’s reasonable points-earning for flights and rental cars, where customers don’t lose anything booking through a third party, those rebates could be a reason for cardmembers to book certain paid travel through the site.
Finally, price prediction turns the usual online travel agency model on its head. The OTAs try to get you to book right away at all costs, often scaring you with how limited hotel rooms might be or how few tickets are left at a given fare. Price prediction will often tell you not to book, and that’s a breath of fresh air – even if their predictions aren’t guarnatees.
Hopper is imperfect. For instance their claim that London flights will drop 12% in price when JetBlue launches service doesn’t seem credible (and is based on data from a much thinner market). But building out alternatives to Expedia only has upside for consumers.