MONTREAL — How are things at Hopper, makers of the travel app of the same name? Depends entirely on who you ask.
Frederic Lalonde, CEO of the Montreal-based company, says it’s going swimmingly—that, given the circumstances, it is practically defying gravity. The company has raised a total of US$253.6 million, according to PitchBook data—including, as The Logic first reported, a US$70-million Westcap-led round in April 2020, just as the pandemic was tightening its grip around the travel industry’s neck.
Frederic Lalonde, CEO of Montreal-based Hopper, says things are going swimmingly for the company—that, given the circumstances, it is practically defying gravity. The company has raised a total of US$253.6 million, according to PitchBook data—including, as The Logic first reported, a US$70-million Westcap-led round in April 2020, just as the pandemic was tightening its grip around the travel industry’s neck. But a deluge of complaints about the company with the Better Business Bureau and the U.S. Department of Transportation raises questions.
Amid the ensuing suffocation, Hopper has thrived. The company’s Help Wanted pages swell with over 100 job listings, even as international passenger air travel has nosedived by 60 per cent. Hopper needs travel agents, software engineers, IT specialists and the like because, as Lalonde told PhocusWire last year, “we’re just in a very good position,” with revenue growth up 112 per cent compared to 2019.
On the other hand, there are people like Michelle Solano. Last July, Solano booked tickets for herself and a friend from Newark to Denver for the following October. The cost, including Hopper’s optional refundable-ticket plan, was US$618.40—a steal, Solano thought, until she tried to cancel a month later. “They told me it would take 90 days, so I waited, but heard nothing. I sent another email, but there was no communication whatsoever,” Solano told me. “And then I went online, and I’m seeing I’m not the only one.”
She certainly isn’t. The company’s otherwise cheery Facebook page has become a repository for complaints. There are nearly 500 comments attached to the company’s last entry, posted about three months ago, the majority expressing anger, frustration, incredulity or a mixture thereof at Hopper’s customer service. “It’s so frustrating trying to contact anyone to get an answer when I can receive my refund. I even purchased Hopper’s flight insurance. I am a longtime customer feeling quite abandoned,” reads one of the more polite missives.
It’s no better over at the Better Business Bureau (BBB). Over 1,000 complaints have been lodged with the BBB in the last three years, all of a similar ilk, garnering Hopper an F grade from the marketplace-trust non-profit. Solano herself lodged a complaint in January, to no avail. “Unfortunately Hopper USA Inc., did not respond to your complaint,” reads the BBB’s response. I’ve fielded an additional 17 emails from unhappy customers whose complaints are variations on Solano’s: difficulty contacting the company, no returned phone calls and, above all, no refunds. “How are they allowed to do this repeatedly?” asked Judi Young, of Maple Shade, N.J.
It’s a similar story with the U.S. Department of Transportation (283 complaints in 2020) and on Apple’s App Store, where the vast majority of the comments over the last COVID-19-addled year are negative, a trend borne out by data from app-tracking site Sensor Tower.
To be sure, few if any companies in the travel industry have been spared the PR disaster resulting from the grounding of 16,000 passenger jets—more than two-thirds of the world’s fleet, according to one estimate. Both WestJet and Air Canada have instituted mass layoffs. “It’s been a challenging time,” said Expedia Group CEO Peter Kern in a February earnings call, noting the “very bad news on case loads across the globe, closures in many countries, restrictions all over the various geographies.”
Very bad news, indeed. Expedia’s fourth-quarter revenue was down 67 per cent year over year in 2020, resulting in a $412-million net loss. “The only people making money in the travel industry are the limousine services driving passengers from the airport to the quarantine hotels,” John Gradek, the coordinator of McGill University’s aviation-management program, told me.
Because Hopper is a privately held company, we don’t know the state of its books. Yet in an extensive interview with PhocusWire, Lalonde said the company was doing very well, and he credited Gen Z for this pandemic success, if only because the members of this restive generation are practically the only ones on the move. “They’re the ones that you saw on the beaches, and they’re the ones travelling. And so our audience is naturally more resilient,” Lalonde said.
To the scads of Gen Z types—along with millennials, who Lalonde says are Hopper’s other key demographic—the company has sold what it calls its “bespoke fintech products,” including scalable ticket-cancellation options, missed-connection insurance and a “price-freeze” function that allows users to lock in a ticket price, for a fee. “The real magic is that we make money,” he said in the PhocusWire interview, noting the company had tripled its market share in the U.S. during the pandemic.
Finally, there is Hopper’s impending B2B product that will sell Hopper’s “customer-centric” wares to online travel agencies, airlines and hotels. “We’ve spent, my God, it must be over $100 million now, building this thing,” Lalonde said.
I had many questions about all of this, not the least of which is how the company expects to continue selling these à la carte extras when, as the cases of Solano and thousands of others show, the company has so much difficulty honouring them. I also wonder about what the deluge of online complaints about Hopper’s service has done to its “customer-centric” reputation.
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And I wanted to know why, given Hopper’s purported pandemic success, the company had availed itself of the Canada Emergency Wage Subsidy. I’d also have liked to ask about the Caisse de dépôt et placement du Québec’s April investment in the company, which came from the public pension fund manager’s $4-billion envelope reserved for “companies that were doing well before the crisis, but whose industries struggled this last year.” And I wanted to ask why Hopper punctuated this funding with significant layoffs, including over 70 employees in the Caisse’s backyard.
So I tried asking. I called the Hopper’s offices in Montreal and Cambridge. I emailed company spokesperson Brianna Schneider. I emailed Lalonde. I emailed them again. No one answered.