Hopper, a startup that has built its business by telling consumers the best time to purchase a flight, is expanding its predictive technology to cover hotels.
By way of a quick recap, Hopper was founded out of Cambridge, Massachusetts in 2010, and the company has gone on to raise $83 million in funding, including a $61 million round last December. Its formative years were spent archiving trillions of flight prices, which formed the basis for its predictive algorithms.
In 2015, the company launched Hopper for iOS, followed by Android several months later, to answer one simple question: Should you buy your flight now, or wait? Flight prices, you see, don’t always go up — and you shouldn’t always wait until the last minute to book, either. According to Hopper’s data, many flight prices actually hit their lowest point up to three months prior to departure because airlines are typically conservative with their initial pricing. By analyzing trillions of historical data points, the company can suggest when the best time to buy a flight is, with users able to set parameters within the app, such as origin / destination, direct flights only, and so on.
Now, Hopper is applying the same concept to hotel bookings.
New York, New York
According to Hopper, hotels follow a pricing pattern similar to that of airlines, as the best rates can often be found two to three months in advance. This means it makes sense to start monitoring prices early to get the best deal.
Hotels on Hopper launches today in New York City, which, according to the company, is already the most popular flight destination on its platform. Hopper is expecting to soon roll the feature out to other markets, such as Los Angeles, Miami, and San Francisco.
In the flight realm, Hopper started out with a focus on the lowest absolute price, but over time the company reeled in further data points to factor in convenience, and it now leverages AI to suggest places a user may wish to travel to. With hotels, Hopper is starting off with a more holistic approach — though prices are key, it’s also tapping other data points, including location and “vibe” (based on a mix of quantitative and qualitative data, including online reviews).
“Hopper has created an algorithm that takes into account what you care about, and will recommend whether you should buy or wait to book that hotel room you’ve been eyeing,” a company spokesperson said. “And just like with flights, we’ll be sure to alert you when to buy, wait, or if prices are expected to rise.”
The app also includes hotel profiles, which are basically full-screen immersive guides that cover everything you need to know about a hotel, including the bar, the gym, the lobby, the neighborhood, and, of course, the room itself.
In terms of how Hopper makes money, well, it currently garners commissions from airlines, and it also charges a $5 booking fee for flights. The company said that it has sold $500 million in flights and is now notching up around $1.5 million per day through the app. Hopper will adopt a similar model with hotels, though it says it won’t charge any fees for bookings.
Hopper promises “95 percent recommendation accuracy” on hotels up to six months in advance of a trip, and it expects to save you around $34 a night, on average, though this could be as much as $90 a night “in the best-case scenarios.”
The new hotels feature will only be available on iOS 11 devices at first, though it will be landing on Android shortly.
VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative enterprise technology and transact. Discover our Briefings.