Road Warrior

Infused with cash, Hipmunk redesigns for younger travelers

Hipmunk app.
Source: Hipmunk

In the crowded field of travel search engines, Hipmunk is finding a slightly younger user base by mixing nontraditional results—such as Airbnb crash pads to Amtrak and private jets—all in one place with tried-and-true airlines and hotels, CEO Adam Goldstein said.

Hipmunk is also hoping to make it easier for last-minute mobile bookers to find a room or flight by weighing how much "agony" or "ecstasy" is involved in a trip and a destination neighborhood's walkability as well as its food, shopping and "vice" offerings.

A redesign of its hotel section revamps the maps and adds reviews to sentiment search. Hipmunk has hired freelancers to write city and airport guides, and it's leaning heavily on algorithms to power the maps that show where there are high concentrations of restaurants, bars and shops,

"People are waiting longer to book their trips, especially in the hotel space," Goldstein said in an interview. Mobile is where a lot of the last-minute growth is coming from. "The hotels themselves are deciding to offer discounts at the very last minute," he said.

Hipmunk isn't the only travel site to notice that shift. In its quarterly report issued in May, Priceline said: "We have observed an increase in promotional pricing to closed user groups, including through mobile apps. If we are not as effective as our competition in offering discounted prices to closed user groups, our ability to grow and compete could be harmed."

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Hipmunk recently secured $20 million in Series C funding. The infusion was led by Oak Investment Partners, and previous investors Ignition Partners and Institutional Venture Partners also chipped in again this round, Goldstein said. The company website lists more than a dozen other investors, including actor and tech-investor Ashton Kutcher.

Goldstein, who is 26, said the new cash will be used mainly to hire more engineers in his San Francisco office, which currently has just over 40 employees.

He sees their main competition is U.K.-based Skyscanner and Kayak, which was purchased by Priceline in May 2013 for $2.1 billion.

Goldstein declined to discuss revenues but said they come through advertising and referral commissions. Hipmunk, which is classified as a meta-search site since it aggregates results from other search engines and providers, has nearly 100 custom contracts with partners where it refers customers for booking.

"Our commission rates are quite consistent if not better than other searches like Kayak and Tripadvisor," he said. And since competition among hotels is tougher than among airlines, "the commissions in hotels are much, much higher than airlines."

And without talking specifics, he said hotel bookings, in sheer numbers and value, have grown six times year over year. Those are mainly U.S. bookings, since the site is only in English, he said. Nontraditional bookings, such as Airbnb beds, account for at least 10 percent of the transactions at Hipmunk, he said declining to be more specific.

The Airbnb listings have been available on Hipmunk since the meta-search site launched in 2011, according to Liz Santos, the senior public relations manager for Hipmunk. The private jet offerings on the site, all handled by Linear Air, are only available for searches originating from Boston, New York or Washington, D.C.

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Airbnb declined to discuss its arrangement with Hipmunk. "We have partnerships with travel providers across the globe but we don't disclose the specific details of each one," an Airbnb spokesperson said in an email to CNBC.

Hipmunk certainly isn't the only company aggregating results from multiple providers. Expedia earlier this year started a pilot project with HomeAway, the world's largest vacation rental site.

While HomeAway's website offers access to 952,000 paid listings of vacation rental homes in 190 countries, the pilot program with Expedia currently offers approximately 10,000 properties in select vacation destinations such as Destin, Florida, and Vail, Colorado, said Victor Wang, the public relations manager for HomeAway.

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"Both HomeAway and would like to add greater volume of listings to this program, so we are accelerating internal development work to enable this sooner," Wang said in an email to CNBC.

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