Hopper Layoffs and the Booking Factor

Since we reported last week that Hopper co-founder and Hopper Technology Systems boss Dakota Smith left the company and that founder Fred Lalonde asserted control of HTS, there have been several new developments.

LinkedIn posts have identified at least a half-dozen Hopper employees, including several from HTS, which is Hopper’s all-important B2B unit, who have been laid off. There likely have been more in the restructuring, although Hopper isn’t talking publicly about it.

And we’ve also learned that the looming consolidation of Booking Holdings’ three B2B units at its Agoda, Priceline and Booking.com brands may have been a factor in Hopper’s reorganization.

Booking’s partner business is poised to become an even more formidable competitor to Hopper in Asia, where Hopper has B2B partnerships with SMBC in Japan, Woori Bank in South Korea, and Commonwealth Bank and Virgin in Australia, for example.

Agoda has extensive direct contracting relationships with hotels in the region and this, coupled with Booking’s global supply, finds Hopper increasingly unable to compete on the prices it offers its partners, according to a former Hopper employee familiar with its B2B operations.

These Agoda direct relationships mean it can offer partners lower net rates and has the ability to offer steeper discounts with higher margins, the former employee said.

These sorts of pressures may have been a factor in Lalonde stepping in to take more control of HTS, which generates the majority of Hopper’s revenue.