Travel app Hopper is booking $1 million in flights per day, and getting 90% of its revenue from push notifications
Hopper claims to be able to forecast future flight prices with 95% accuracy, up to a year in advance.
The basic premise is that you set up what days you want to fly, and then Hopper sends you push notifications telling you about how prices are changing and recommending when you should buy. Then you can buy your flight directly in the app.
Hopper's strategy seems to be working. Besides winning design awards, it has been downloaded over 10 million times, and just announced a big ~$62 million round of funding ($82 million Canadian).
While Hopper as a company has been around since 2007, it has really come to prominence since last September, when it began to sell flights in its app.
Hopper's rise has shown the power of two things: push notifications and buying flights in-app.
To forecast, Hopper looks at demand, at people's shopping behavior in the app. "We identify pockets of shopping [behavior] before [airline prices] react," CEO Frederic Lalonde tells Business Insider.
Hopper keeps you updated with push notifications, and tries to get you the best possible deal. It charges a $5 flat fee when you book.
Part of getting you to buy at the right time even comes to crafting the language of the push notifications, Lalonde says. He tells of story of how Hopper added the word "Whoa" to a particular notification, which indicates that the deal is in the top 5% Hopper has seen. Conversion doubled simply by adding the word "Whoa."
And it might surprise you, but Lalonde says that "no one" waits for the lowest price. They usually pull the trigger when they see they are getting a pretty good deal.
The fresh $62 million will go toward developing new features, continuing to expand internationally, and getting into adjacent areas like hotels, according to Lalonde.
I'm a frequent Hopper user and two of the features Lalonde mentioned particularly piqued my interest.
The first is something called the "fair bear," which is in beta. One of the issues I've had with Hopper is that sometimes budget airlines, which have hidden things like luggage fees, appear to be cheaper than they are in the app. The fair bear will pop up a notification of the various caveats if you are booking a budget flight (there is also a filter you can use to remove them).
The second feature is the ability to plan a trip with friends and family who don't live in the same place as you do. Here's how it works. Let's say you live in New York and your friend lives in Los Angeles. You put the dates you want to go in and Hopper gives you a few potential locations where the price is optimized for both of you.
The second one also fits into Hopper's broader mandate to get into "discovery," to suggest trips that you might like to go on based on similar users. Hopper wants to become your travel hub on your phone, the place you go when you are looking to take a vacation. While there are many successful travel websites, there isn't a clearly dominant app on your smartphone, perhaps partly because of people's historical reluctance to complete purchases on their phones (versus browsing).
But Hopper is betting that will change, and the phone will become your main source of arranging travel.
Hopper's total funding to date has been $104 million Canadian.
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