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Expedia Group “terminates” supply partnership with Hopper

US / Canada: Expedia Group has terminated its vacation rental and hotel supply relationship with online travel agency [OTA] rival Hopper, accusing the latter of “exploiting consumer anxiety and confusing customers”.

In news first reported by Skift, it was revealed that Expedia Group, which has supplied Hopper with vacation rental and hotel inventory for a number of years through its Rapid API, informed its competitor on Wednesday that it would be ceasing the partnership with immediate effect. Expedia Group’s statement led to a swift riposte from Hopper, which said the decision had been made because Expedia saw Hopper as “a significant competitive threat”.

An Expedia Group spokesperson first said: “Expedia Group terminated its supply relationship with Hopper today. The reasons for termination are simple: as Hopper’s product has evolved, we have determined that its features exploit consumer anxiety and confuse customers, leading them to purchase services they neither need nor fully understand.

“As leaders in powering the B2B travel market, we have a commitment to travellers and to our supply partners that we take very seriously and, as such, we are ceasing placing our trusted supplier content on the Hopper platform,” added the spokesperson.

In response, Hopper issued its own statement via a company spokesperson: “Expedia notified us today that they will no longer distribute their inventory via Hopper channels. Given Hopper’s rapid growth in direct-to-consumer market share, the success of Hopper’s fintech products, and Hopper’s growing B2B business, Expedia clearly views Hopper as a significant competitive threat.

“Although it seems that Expedia planned and delivered its notice in an anti-competitive attempt to cause disruption to Hopper’s business, there will be no impact at all. Hopper has always had a multi-sourced strategy when it comes to our inventory. Expedia was one participant among many within Hopper’s marketplace.

“As Hopper has grown its market share, we’ve moved substantially to direct inventory to ensure we always offer the best price and selection for our customers. Expedia’s decision to withdraw from Hopper channels will not affect the selection or prices available to Hopper consumers. Hopper will continue to be the best place to book travel,” added the Hopper spokesperson.

Since its founding in 2007, Montreal-headquartered Hopper has emerged from six years of stealth building to become the third largest OTA in North America and one of the fastest growing booking apps, targeting predominantly Gen Z and millennial demographics. The platform, which lists homes, hotels, flights and car rentals, has reported more than 100 downloads and was the fastest-growing app in the OTA market in 2021, growing its active users by 494 per cent and even overtaking Airbnb in terms of market share for monthly active users from June 2021.

Hopper debuted hotel inventory on its platform six years ago, growing to almost two million hotels at one point with supply partners including SiteMinder.

At the start of last year, Hopper expanded into a new travel vertical with the launch of short-term rental homes in its app through Hopper Homes. At the time of launch, Hopper Homes debuted with more than two million properties in its inventory, with Hopper promising to “bring price transparency and flexibility to the home rental category”.

In August 2022, Denver-based firm Evolve was announced as Hopper’s largest direct vacation rental supplier, with more than 24,000 Evolve vacation homes across 750+ markets being made available via the Hopper app at the time. Hopper also partnered with operators including Frontdesk and VTrips for vacation rental supply.

Then in November, Hopper secured $96 million in a follow-up investment from existing investor Capital One in order to continue building new social commerce initiatives aimed predominantly at younger travellers. The investment took Hopper’s total funding to $740 million, following a $170 million Series F funding round the March prior.

Among Hopper’s current fintech offerings are Price Freeze, Flight Disruption and its Carrot Cash system, while its social commerce business also includes games and referral programs to help app users earn travel credit from their bookings. Hopper says that it sells $6 billion worth of travel fintech each year and that 60 per cent of travellers booking through its app buy at least one fintech product when making a reservation.

Questions still remain, however, about how the news will affect Hopper’s relationship with Vrbo after the former previously confirmed that it had partnered with the Expedia Group-owned brand for “a small portion” of its hotel bookings.

Expedia Group will soon announce details about the launch of its long-anticipated travel rewards program One Key, which is set to roll out initially in the United States this month, with additional markets to follow in 2024 and beyond. For now, Expedia Group says that travellers will be able to earn and use rewards across its brands [including Expedia, and Vrbo], providing added flexibility when it comes to bookings.