Hopper soars past 30 million downloads with AI-based airfare prediction app

Björn Müller
Feb 13 · 4 min read

When is the best time to book a flight? As early as possible? Or at the last minute, when airlines want to get rid of their remaining seats? It’s a mystery most travelers face and a never-ending topic in the press around every major holiday. Understandably so: Prices for Christmas flights changed more than 150 times in November and December of 2018. From the traveler’s point of view, the way flights are priced is a black box — and it’s something that airlines have kept a well-guarded secret.

This is where the Canadian startup Hopper comes into play. Founded in Montreal (Quebec), Hopper brings more transparency to the process by letting the data speak for themselves. Through an analysis of historical price data, the mobile app recommends the optimal time for users to book their desired route.

Hopper even knows where you should go
With just a few clicks, Hopper saves the users’ flight request and sends a push notification when the price — calculated by a proprietary algorithm — either reaches its lowest expected point or is projected to rise due to changes in demand. In addition, a calendar shows alternative and less expensive travel times for the same journey. Hopper even recommends different destinations that have dropped in price for the indicated dates of travel. In fact, one-quarter of Hopper’s bookings result from these AI recommendations. Users are therefore booking trips they didn’t explicitly search for, but the app knew to suggest.

Hopper recommends the best time to book a flight.

As price transparency is still a major issue in 2019, the concept definitely hits a nerve. Meta-searchers such as Kayak, Skyscanner, as well as virtual-interlining providers like kiwi.com give users the opportunity to compare current prices. But they don’t have the ability to predict the best time for booking your next flight. Another disadvantage to these platforms is that travelers are often confronted with constant price changes and fares that become unavailable once a certain flight has been picked.

What makes the difference
Hopper stands out by having built the largest airfare dataset in the industry, which it combines with deep-learning methods to accurately predict the optimal time slot for booking most routes. But Hopper is just getting started, as its crystal ball becomes more accurate with every request it processes. Hopper is also growing fast: Its global roll-out is just around the corner and more airlines and new routes will be added to its service in the near future.

While Hopper’s approach to flight booking is unique and entirely focused on mobile users, the company’s business model resembles that of a classic online travel agency (OTA). The company receives either a commission per flight sold and/or a fixed fee for forwarding a customer. Hopper users can also share part of their savings with an optional gratuity to the company.

Hopper announced a US $100 million round of venture capital funding in October 2018, boosting the company’s valuation to a massive US $685 million. The investors’ enthusiasm for the firm seems more than justified: So far, the Hopper app has been downloaded 30 million times and is on track to surpass US $1 billion in sales.

Who is behind the company
Unlike many startups in the travel and mobility context, Hopper was founded by an industry veteran: CEO Frederic Lalonde. Frederic sold his first startup to Expedia in 2002, where he continued to work for four years, in part as VP of Hotel Supplier Strategy. Currently, he serves on the board of directors of MakeMyTrip, India’s largest online travel agency. Company CTO and co-founder Joost Ouwerkerk also worked alongside Frederic at Expedia.

Hopper’s investors are also fellow Canadians and supporting the company as it becomes the next unicorn in Travel & Mobility Tech. Hopper’s latest round was led by Canadian pension funds OMERS, alongside Caisse de dépôt et placement du Québec (CDPQ), Accomplice, Brightspark Ventures, Investissement Québec, BDC Capital IT Venture Fund, and new investor Citi Bank Ventures.

In January 2019, the Lufthansa Group has entered into a research alliance with Hopper focused on the subject of artificial intelligence in airline revenue management. In addition to this research partnership, the Lufthansa Innovation Hub will support Hopper’s much-anticipated expansion to Europe starting in the summer of 2019.

Where to learn more about Travel & Mobility Tech

If you want to learn more and stay up-to-date with the sector’s trends, the hottest startups and the most relevant news and funding rounds, sign up for our exclusive Travel & Mobility Tech Newsletter right here.

Björn Müller

Written by

Entrepreneuer + ex VC — currently @Lufthansa Innovation Hub

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