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Montreal startup Hopper takes a run at hotel-booking big leagues

Frederic Lalonde, left, with Hopper cofounder Joost Ouwerkerk.

Frederick Duchesne

Hopper Inc., a heavily financed Montreal startup that is changing how people book flights, is now aiming to succeed where mighty 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 enable customers to book hotel rooms as well. Hopper is starting with 25 hotels in New York City with plans to double that number and to expand to another 10 popular markets in the United States, including San Francisco, Las Vegas and Miami in the coming months.

"Typically it would be laughable for us to take on a $100-billion [U.S.] company [like Priceline], but given the traction we've seen on mobile … it really feels like we can grow to several hundred million downloads globally and literally rebuild one of these mobile empires," said Hopper CEO and co-founder Frederic Lalonde, who raised $82-million (Canadian) in a venture capital financing last fall led by the Caisse de dépôt et placement du Québec. "We have our sights set on literally owning mobile and displacing the two large giants that operate around the world."

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Hopper has become an unusual startup success story in online travel because its app more often than not tells prospective travellers not to book flights.

Instead, it directs users to enter their preferred travel dates and then notifies them by instant message when prices approach their lowest points, based on patterns gleaned from trillions of online flight quotes accumulated from airline booking services spanning several years. Hopper claims a 95-per-cent accuracy rate with its predictions, then processes about $1.5-million (U.S.) worth of flight bookings through its online travel-agent service daily. Hopper's three-year-old app has been downloaded 17 million times, up from 10 million last December, and its revenue is set to more than double this year, to more than $10-million.

"Hopper is a really surprising and impressive up-and-comer that has … landed on something that has proven to be effective and very contagious and viral, especially among younger travellers," said Phocuswright analyst Douglas Quinby.

Now, with users tracking and buying flights in increasing numbers, Mr. Lalonde says hotel bookings offer a far richer prize. Users are adding 100,000 monitored flights a day, with an average trip of eight days. That translates into hundreds of thousands of potential hotel-room nights that Hopper could book.

Hopper is aiming to build a similar prediction engine for hotels, based on 10 million price quotes it has gathered from 500 New York hotels dating over a year. It's a more time-consuming effort as sources for such data are more fragmented than for airfares, and must be compiled one market at a time.

Hopper is also only looking to feature the best hotels. "Typically, we won't touch more than 30 per cent of what's available in the market," said Mr. Lalonde, who previously served as a vice-president with Expedia after it bought his previous startup in the early 2000s. "We're obviously skewing toward the ones that consistently have the best user ratings."

Robin Spindel, vice-president for marketing with Q&A, a residential hotel in Manhattan – and one of the first to sign on with the app – said "Hopper's immersive video content allows us to showcase why we're truly different" from other extended-stay properties. "We're already starting to see bookings from our visibility on Hopper and can't wait to grow the relationship and revenue through this exciting channel."

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The mobile platform differs from competing sites with a "Snapchatty" mobile user interface, as Mr. Lalonde describes it, that is easily navigated with swipes and finger taps. Its hotel feature pages eschew official promotional photographs and blocks of texts common on other sites in favour of Hopper-generated video vignettes of rooms and lobbies with brief text bubbles describing features.

"They've actually geared a mobile app to the millennial generation, so they're a first market mover," said Tom Birch, vice-president of funds and technology with the 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 rolled it out as a strategic differentiator. The competition will be playing catchup for the next couple of years."

But Mr. Quinby warned Hopper faces a stiff challenge in the hotel market. Priceline and Expedia, who collectively own such sites as,, Trivago and Orbitz, have been immune to disruption; Amazon's short-lived hotel-booking site Amazon Destinations shut in 2015 after just a few months.

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

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