Canada: Gen Z- and millennial-friendly online travel agency [OTA], Hopper, has laid off 30 per cent of its team [affecting 250 employees] in a bid to achieve profitability.
Speaking to The Globe and Mail, Hopper CEO Fred Lalonde said that the cuts were designed to “cut our burn rate and arrive to break even as fast as possible”, focusing mainly on “experimental” products and services that the company had not already launched. Hopper will reduce its marketing output in certain territories such as Asia that do not generate as much revenue as intended, but it will continue to invest in revenue-generating areas of the business, including growing its lodging offerings.
Despite not attributing the layoffs to economic uncertainty surrounding a potential slowdown in global travel, Lalonde is aiming to take Hopper public in the coming years and promised to help it adapt to a “new reality”.
Hopper previously laid off almost 50 per cent of its workforce in the early days of the pandemic, when it employed around 340 people.
Since 202o, the Montreal-based OTA has fared relatively well compared to some of its counterparts in the travel tech sector, having seen its valuation exceed US$5 billion last year and its revenues soar from $14 million to $500 million in the space of four years. Lalonde says that Hopper has ample cash reserves in spite of the layoffs, having last secured $96 million in a follow-up investment from existing investor Capital One last November.
Since its founding in 2007, Hopper has emerged from six years of stealth building to become one of the largest and most prominent apps in North America. The platform, which lists homes, hotels, flights and car rentals, 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 in 2021.
In January 2022, Hopper expanded into the short-term rental vertical by launching Hopper Homes. At the time of the launch, the platform claimed to have had more than two million properties in its inventory, and it partnered with property management companies such as Frontdesk, Evolve and VTrips to “bring price transparency and flexibility to the home rental category”.
So far this year, Hopper has partnered with Brazilian neobank and digital financial services platform, Nubank, to power its mobile travel booking services for its customers, rebranded its B2B business as Hopper Technology Solutions [HTS], and expanded its e-commerce offerings.
Looking ahead, Hopper is driving the social commerce aspect of its business, including offering in-app promotions, discounts and sales events, as it prioritises increasing its market share and user base, as well as innovating and creating a unique purchasing experience for its customers, in a competitive OTA marketplace.
The company’s surging market share drew the attention of its competitors, though, leading Expedia Group to terminate its vacation rental and hotel supply relationship with Hopper in July and accuse it of “exploiting consumer anxiety and confusing customers”.