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'Nervous' travelers are paying up for flight disruption protection, expert says

Americans are willing to spend a little extra on their travel plans just to have peace of mind as the Delta variant causes cases to swell again, one travel booking expert said.

"One thing that we are noticing, though, is that there is a surge in demand for our disruption protection product," Hopper Chief Executive and Co-founder Frederic Lalonde recently shared with Yahoo Finance Live, noting the company's premium rebooking service for canceled or delayed flights “is up 50% since the beginning of the year."

"So people are traveling, but they're also very nervous," he said.

His comments come after Southwest Airlines this month said that the recent spike in Covid-19 cases is slowing flight bookings and prompting an increase in cancellations. A credit card spending tracker from Chase also showed that air-travel purchases have fallen off in recent weeks.

(Photo: Getty Creative)
(Photo: Getty Creative)

The travel app in North America boasts over 16 million downloads, and Lalonde shared that the same technology that allows users to predict and accommodate for price fluctuations also allows Hopper “to basically insure people against all sorts of things” as it relates to travel.

The protection service runs 10% to 15% of the flight cost that travelers now seem fine with paying up for.

"The more disruption there is the more people tend to lay on these financial products as they are purchasing travel," he added, noting that another service — its price-freeze feature — shields customers from paying more on a fare by paying a small deposit.

As for when travel will fully resume to pre-pandemic levels, Lalonde forecasts that it is still a ways away.

“To be clear, I think we have at least another year of disruption with COVID, but gradually, as the vaccines roll out we're seeing some stability in international travel,” he said.

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Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.