In a move the
company says is part of a broader strategy to diversify its portfolio of non-traditional
insurance and travel protection products, Amadeus will offer Hopper’s fintech solutions
to airlines, online travel agencies, metasearch companies and other travel
providers within the Amadeus Travel Platform.
The partnership
will begin with two products available through Hopper Cloud - the
company’s B2B initiative announced in March – “Cancel for Any Reason” and “Price
Freeze,” with plans to add more offerings in the future.
“We got in touch
with Hopper because we saw a great potential that these products can help us
with our overall diversification,” says Peter Altmann, head of mobility and
insurance at Amadeus.
“And then we
identified an online travel agency together who is interested in consuming the
Hopper products from us, and that was the decision point to go forward. We have
a pilot customer and that’s as well the reason why we are onboarding these two
products – Cancel for Any Reason and Price Freeze - because this OTA wants to
consume these two products.”
Altmann says he
hopes to have this OTA client equipped to offer Hopper’s products by the end of
this year and will reveal the name at that time.
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Hopper will be
the merchant of record and will underwrite all of the risk for the fintech
products sold by Amadeus’s customers.
“One of the major things that we remove in barriers to entry is when
we actually freeze a price whether for flight or hotel and the prices go up, we
make the airline and hotel completely whole. We pay the difference out of
pocket. So that means that anybody who is adding this to their suite doesn’t
have to worry about adverse effect to revenue management. If you are the
airline or hotel that’s important, and if you are a third-party it means you
are basically offering a customer-friendly and an airline-friendly and a hotel-friendly
product,” says Fred Lalonde, Hopper co-founder and CEO.
“Our ability to take this risk on our P&L...
is because of the AI. We are better at pricing risk of prices going up... than
anybody in the world right now in my opinion.”
When asked about the revenue model for this
partnership, Lalonde says, “The revenue share that comes out of that is
specific to every deal, but it’s basically we make some money, you make some
money.”
And he says Hopper will announce additional
clients for Hopper Cloud in the coming weeks, but Amadeus “is the first one we
are announcing simply because they moved faster than everybody else we are
talking to, to their credit.”
For
Amadeus, this partnership is the next step in a diversification strategy that
began last October when it announced a partnership with Setoo – a PhocusWire Hot25
startup – to provide personalized insurance products for travelers.
“When
we looked at Hopper, when we looked at Setoo before, our focus was to
understand what do the travelers want when they book travel arrangements. It’s really
to cater for the needs or the wishes of the traveler, because going forward I
believe fintech products will grow faster - or more - than traditional travel
insurance,” Altmann says.
“And
I believe that we will see a rapid uptake. We have already had had some off the
record conversations with some of our customers and there was a great level of
interest, as well having spoken with one large airline. They as well signaled a
very high interest that this could be helpful to increase for them the basket
size by integrating Hopper products into their booking flow.”
In
its own app, Hopper’s fintech solutions, first launched in 2019, are now driving
“tens of thousands of transactions” - with users spending an average of 15%
more than they would have if they made their booking elsewhere – and helping
the company triple its market share since the beginning of the pandemic,
Lalonde says.
As
part of this new Amadeus and Hopper partnership, Hopper also gets access to
Amadeus’ global car rental inventory, which currently consists of 40 car rental
companies in more than 191 countries.
Hopper
added car rental to its app in 2020, with the help of an internal team that had
been developing a corporate travel initiative that Lalonde says the company halted
when the pandemic hit.
“We
built a multi-sourcing, mobile-first car rental platform from scratch. It’s now
almost 20% of all of our sales,” he says.
In
the future, Lalonde says Hopper will expand its fintech offerings, add new
categories such as experiences in its app and continue its business development
in Asia, Latin America and Europe.