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Montreal startup Hopper is getting into the big hotel booking leagues

Frederic Lalonde, left, with Hopper co-founder Joost Ouwerkerk.Frederick Duchesne

Hopper Inc., a heavily funded Montreal startup changing the way people book flights, is now aiming to succeed where mighty Amazon.com Inc. couldn’t: by taking on online travel giants Expedia Inc. and Priceline Group Inc. in the hotel market.

Hopper, whose mobile-only flight booking platform is a hit with millennials and is the world’s eighth most downloaded travel app, according to market research firm Phocuswright, is expanding its offering to allow customers to also book hotel rooms. Hopper is starting with 25 hotels in New York and plans to double that number and expand to 10 other popular markets in the United States, including San Francisco, Las Vegas and Miami in the coming months.

“As a general rule, it would be laughable for us to assume $100 billion [U.S.] the society [like Priceline]but given the traction we’ve seen on mobile… it really feels like we can go to several hundred million downloads worldwide and literally rebuild one of these mobile empires,” said Hopper CEO and co-founder Frederic Lalonde, which raised $82 million. (Canadian) in a venture capital financing last fall led by the Caisse de depot et placement du Quebec. “We’re aiming to literally own mobile and displace the two big giants that operate in the world.”

Hopper has become an unusual startup success story in online travel, as its app most often notifies potential travelers do not to book flights.

Instead, it asks users to enter their preferred travel dates, then notifies them via instant message when prices approach their lowest points, based on patterns gleaned from billions of flight quotes in line accumulated from airline reservation services over several years. Hopper claims a 95% accuracy rate with its forecasts, then processes approximately $1.5 million (US) in flight bookings daily through its online travel agent service. Hopper’s three-year-old app has been downloaded 17 million times, up from 10 million last December, and its revenue is expected to more than double this year, to more than $10 million.

“Hopper is a really surprising and impressive back-and-forth that has … landed on something that’s proven to be effective and very contagious and viral, especially among younger travelers,” said Phocuswright analyst Douglas Quinby. .

Now that users are tracking and buying flights in increasing numbers, Lalonde says hotel bookings offer a much richer price. Users add 100,000 monitored flights per day, with an average trip of eight days. This translates into hundreds of thousands of potential hotel nights that Hopper could book.

Hopper aims to create a similar prediction engine for hotels, based on 10 million quotes it collected from 500 New York hotels that are over a year old. This is a more time-consuming effort because the sources of this data are more fragmented than for airfares and must be compiled one market at a time.

Hopper also only seeks to present the best hotels. “As a general rule, we won’t touch more than 30% of what’s available on the market,” said Lalonde, who was formerly a vice president at Expedia after buying his previous startup in the early 20s. 2000s. “We obviously go for those that consistently have the best user ratings.”

Robin Spindel, vice president of marketing at Q&A, a Manhattan apartment hotel – and one of the first to log on to the app – said “Hopper’s immersive video content allows us to show why we are really different” from other extended hotels. residence properties. “We are already starting to see bookings through our visibility on Hopper and we look forward to growing the relationship and revenue through this exciting channel.”

The mobile platform sets itself apart from competing sites with a “Snapchatty” mobile user interface, as Lalonde describes it, which is easily navigable with swipes and taps of your fingers. Its hotel overview pages eschew the official promotional photographs and text blocks common on other sites in favor of Hopper-generated video thumbnails of rooms and lobby areas with brief text bubbles describing features.

“They’ve actually adapted a mobile app for millennials, so they’re an early market mover,” said Tom Birch, vice president of funds and technology at Caisse. “If you look at the big guys, they probably rolled out a mobile [offering] as a necessary evil” as business shifted to smartphones.” Hopper deployed it as a strategic differentiator. The competition will catch up over the next two years.”

But Mr Quinby warned that Hopper faced a tough challenge in the hotel market. Priceline and Expedia, which collectively own sites such as Booking.com, Hotels.com, Trivago and Orbitz, were immune to the disruptions; Amazon Destinations, Amazon’s short-lived hotel booking site, shut down in 2015 after just a few months.

“The challenge in hotels is that you need a lot of scale and a lot of properties,” Quinby said. “The question for Hopper is how are they going to initially compete with such a small selection of properties in one market? … But if they have the patience and the funds to build it, it would be great for the market to see another player give the [giants] a run for their money.”