Expedia's split from Hopper was inevitable after tripling of Hoppers revenues last year. Expedia finally launches One Key loyalty program.
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GLOAccording to analysts, the breakup between Expedia and Hopper was a predictable outcome, given that Hopper had emerged as a formidable and growing competitor to Expedia. Hopper had successfully carved out its own niche and expanded its customer base, moving beyond fintech products and directly challenging Expedia’s position in the market. Consequently, Expedia decided to terminate its supply relationship with Hopper, a move that some experts saw as almost inevitable.
Christopher Anderson, a professor at the Cornell School of Hotel Administration, acknowledged Hopper’s significant following and its intention to capitalize on its user base, which posed a competitive threat to Expedia. As Hopper’s product evolved and gained traction, the termination of their partnership became increasingly likely.
In response to Expedia’s decision, Hopper claimed that the move was “anticompetitive” and indicated that Expedia perceived them as a substantial threat. The tone of both companies’ statements surprised analysts, with some describing the situation as an “unpleasant divorce.”
Hopper’s impressive sales growth, which tripled in a year, played a role in Expedia’s decision to end the relationship. The divergent views on their partnership and concerns about Hopper’s business practices may have led Expedia to view Hopper as a potential rival rather than a partner.
Lorraine Sileo, a Phocuswright senior analyst, noted that while Hopper posed a threat to Expedia and other online travel agencies (OTAs), there was still a considerable gap between the top two players in the market.
Despite the breakup, analysts believe that Hopper’s inventory challenges can be managed, and the overall impact will be minimal. They mentioned that multiple third parties distribute accommodations, which allows Hopper to navigate this hiccup with ease.
The Hopper-Expedia breakup is part of a series of recent developments from Expedia Group, including staff layoffs in various departments and the launch of its One Key loyalty program in the U.S., covering Expedia, Hotels.com, and Vrbo.
