Kayak, the travel price-comparison service, on Tuesday debuted a corporate travel service for large companies.
25.08.2023 - 13:13 / skift.com / Steve Hafner / Dennis Schaal / Fred Lalonde
In the aftermath of Expedia turning off its hotel and vacation rental feed to Hopper, Steve Hafner, the CEO of travel search engine Kayak and dining platform OpenTable, thinks Hopper took advantage of the relationship.
“Expedia finally wised up to Hopper’s actions,” Hafner told Skift. “They were taking Expedia’s inventory, using those rates and sales volumes to prioritize direct deals, and then undercutting Expedia’s prices because they could make it up later by selling fintech — that consumers don’t need.”
In other words, according to this line of thinking, Hopper would take advantage of the customer traffic that Expedia’s hotel inventory drew into the Hopper app, and then offer its own direct deals with hotels at lower prices than Expedia offered. Hopper could make up for the shortfall by selling things like its high-margin hotel price-freeze feature.
Hopper labels some hotel deals as coming from Hopper. These are “exclusive deals,” according to the company, that Hopper obtains through direct partnerships with hotels.
Hopper didn’t reply to a request for comment about this and other opinions from Hafner.
The Kayak CEO, whose company is part of Expedia and Hopper rival Booking Holdings, is hardly a disinterested party. In addition to the Booking Holdings ties, Kayak partnered with Hopper around October 2021 on some of its fintech products, and ended the relationship a little more than a year later.
Kayak apparently had different motivations than Expedia. “We turned off Hopper a while back,” Hafner said. “It just wasn’t performing anywhere close to their projections.”
In the tangled web of online travel, Hafner was from 2000 to 2003 an executive vice president of Orbitz, which was owned by major U.S. airlines but now is an Expedia brand. Hopper CEO Fred Lalonde sold a company to Expedia in 2002, and worked there on hotels for the next four years.
Hafner said he admires what Lalonde “has built so far,” adding, “but it’s time to make some money.”
“Fred’s toes are the ones being squashed by business partners,” Hafner said. “OTAs (online travel agencies) see Hopper as a more meaningful and aggressive competitor, and suppliers hunger for their fintech margins.”
Airline commissions are notoriously paltry, but Hopper makes a huge chunk of its revenue from selling flight price freeze and a variety of other flight and hotel fintech products.
Hafner said Lalonde is under pressure to turn a profit, but Hopper will need to curtail all the money it spends on convincing consumers to download its apps, and money handed out when Hopper users refer a friend.
Hafner argued that Hopper doesn’t have a revenue problem, but has a profitability issue.
“He doesn’t have a revenue problem per se,” he said. “Rather, he needs
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