Travel Apps Are Betting That Paying You Will Win Your Business

Changing people’s travel-shopping habits is hard, says Lorraine Sileo, senior analyst at Phocuswright, a travel research company. “We know that travelers will always look for the lowest price, and that’s what they ultimately buy,” she says. 

The travel industry spends big on advertising to win customer loyalty, Ms. Sileo says. The ultimate goal for many companies today is to get travelers to use their apps and book with them directly, rather than paying fees for a referral from Google. And while someone might visit multiple websites to comparison shop for a vacation, they aren’t likely to download several apps, she says.

Hopper is eschewing traditional advertising in favor of a rewards program designed to encourage people to visit its app even when they’re not planning a trip. Its customers have redeemed $50 million in rewards, vouchers and flash deals over the past 12 months, a company spokeswoman says. That number exceeds Hopper’s external marketing budget over that time.

Hopper became the most-downloaded travel-booking app in the U.S. last year, surpassing

Booking.com’s

app, according to a report from analytics firm Sensor Tower. It still held that distinction as of the first half of 2022, though

Expedia

and Booking.com’s apps have outpaced Hopper’s in downloads recently.

The company is testing new programs that compensate users for opening the app more frequently, inviting others to the app and even playing games on it.

The strategy is modeled on the success of e-commerce apps in Asia such as

Pinduoduo,

which have used social and gaming features to fuel growth, Hopper chief executive and founder

Frederic Lalonde

says. Pinduoduo has integrated various features that reward people for spending time on the app.

In one Pinduoduo game, a person can water a virtual fruit tree. Once the tree is fully grown, the company ships the player a free box of fruit.

Some of Hopper’s new features are already widely available. The app has a Daily Gift feature that rewards people for opening the app each day. After seven consecutive days, they earn $10 in Carrot Cash, the in-app currency akin to reward points or miles that customers can use to lower the price of flights, hotels and car rentals. As of late August, Hopper has made it available to 40% of users.

Other features still in testing stages are even more gamified. One lets users earn Carrot Cash for completing tasks such as adding account information. Another includes mini games akin to Pinduoduo’s tree-watering game.

Hopper users also earn rewards for booking travel on the app. Carrot Cash currently cannot be combined with other discounts such as vouchers and flash deals, a company spokeswoman says, and has a six-month rolling expiration period.

Early findings suggest that the games and rewards are working in getting people to engage with Hopper’s app more frequently, Mr. Lalonde says.

When in trip-planning mode, a person may open Hopper once a week, he says. Otherwise they engage with the app far less frequently. The open rate for the Hopper app is five to 10 times higher among people engaging with new games and features, he says.

“If I give you a fun reason to launch [the app] every day, you’re going to launch every day,” Mr. Lalonde says. “And you don’t have a reason to launch a travel app every day.”

Other travel companies are trying similar features. India-based Oyo launched games in its mobile app earlier this year.

IHG

Hotels and Resorts formed a partnership with mobile-gaming platform Playstudios. Members of IHG’s loyalty program can earn points by playing mobile games and then put those points toward discounted stays at IHG hotels.

Jonathan Barsky, an associate management professor at the University of San Francisco, says the large audience for social casinos—apps or websites that feature casino-like games but don’t involve betting actual money—suggest that these features could prove enticing. The social casinos have around 80 million daily active users globally, he says. Popular examples include Big Fish Casino and Slotomania. 

Chiazam Mbelu, a 29-year-old from Los Angeles, says she likes Hopper’s app because it’s easy to use and lets her track flight prices. She has used Carrot Cash to save money on flights before, which she said was fairly easy to do. But the way the app displays Carrot Cash and vouchers was confusing, she says.

Carrot Cash is stored in a wallet that also houses vouchers and deals that can only be used on certain purchases, such as hotels or car rentals. The app’s wallet distinguishes between the two categories when you open it, though it does also give a total amount combining the two amounts. At times Ms. Mbelu says she thought she had more Carrot Cash at her disposal than she actually did. (A Hopper spokeswoman says it was possible that Ms. Mbelu had confused the two amounts.)

While Ms. Mbelu isn’t one of the beta testers for Hopper’s newest features, she says she would give them a shot. “Flight tickets are getting so expensive these days that any kind of discount is really valued,” she says.

Write to Jacob Passy at [email protected]