Amadeus offers Hopper’s travel fintech products to intermediaries and airlines

In a move the company says is part of a broader strategy to diversify its portfolio of non-traditional insurance and travel protection products, Amadeus will offer Hopper’s fintech solutions to airlines, online travel agencies, metasearch companies and other travel providers within the Amadeus Travel Platform.

The partnership will begin with two products available through Hopper Cloud - the company’s B2B initiative announced in March – “Cancel for Any Reason” and “Price Freeze,” with plans to add more offerings in the future.

“We got in touch with Hopper because we saw a great potential that these products can help us with our overall diversification,” says Peter Altmann, head of mobility and insurance at Amadeus.

“And then we identified an online travel agency together who is interested in consuming the Hopper products from us, and that was the decision point to go forward. We have a pilot customer and that’s as well the reason why we are onboarding these two products – Cancel for Any Reason and Price Freeze - because this OTA wants to consume these two products.”

Altmann says he hopes to have this OTA client equipped to offer Hopper’s products by the end of this year and will reveal the name at that time.

Hopper will be the merchant of record and will underwrite all of the risk for the fintech products sold by Amadeus’s customers. 

“One of the major things that we remove in barriers to entry is when we actually freeze a price whether for flight or hotel and the prices go up, we make the airline and hotel completely whole. We pay the difference out of pocket. So that means that anybody who is adding this to their suite doesn’t have to worry about adverse effect to revenue management. If you are the airline or hotel that’s important, and if you are a third-party it means you are basically offering a customer-friendly and an airline-friendly and a hotel-friendly product,” says Fred Lalonde, Hopper co-founder and CEO.

“Our ability to take this risk on our P&L... is because of the AI. We are better at pricing risk of prices going up... than anybody in the world right now in my opinion.”

When asked about the revenue model for this partnership, Lalonde says, “The revenue share that comes out of that is specific to every deal, but it’s basically we make some money, you make some money.”

And he says Hopper will announce additional clients for Hopper Cloud in the coming weeks, but Amadeus “is the first one we are announcing simply because they moved faster than everybody else we are talking to, to their credit.”

For Amadeus, this partnership is the next step in a diversification strategy that began last October when it announced a partnership with Setoo – a PhocusWire Hot25 startup – to provide personalized insurance products for travelers.

“When we looked at Hopper, when we looked at Setoo before, our focus was to understand what do the travelers want when they book travel arrangements. It’s really to cater for the needs or the wishes of the traveler, because going forward I believe fintech products will grow faster - or more - than traditional travel insurance,” Altmann says. 

“And I believe that we will see a rapid uptake. We have already had had some off the record conversations with some of our customers and there was a great level of interest, as well having spoken with one large airline. They as well signaled a very high interest that this could be helpful to increase for them the basket size by integrating Hopper products into their booking flow.” 

In its own app, Hopper’s fintech solutions, first launched in 2019, are now driving “tens of thousands of transactions” - with users spending an average of 15% more than they would have if they made their booking elsewhere – and helping the company triple its market share since the beginning of the pandemic, Lalonde says. 

As part of this new Amadeus and Hopper partnership, Hopper also gets access to Amadeus’ global car rental inventory, which currently consists of 40 car rental companies in more than 191 countries. 

Hopper added car rental to its app in 2020, with the help of an internal team that had been developing a corporate travel initiative that Lalonde says the company halted when the pandemic hit. 

“We built a multi-sourcing, mobile-first car rental platform from scratch. It’s now almost 20% of all of our sales,” he says. 

In the future, Lalonde says Hopper will expand its fintech offerings, add new categories such as experiences in its app and continue its business development in Asia, Latin America and Europe.