clock hotel
631 days ago
 

Mobile trend toward lateness is a puzzle and opportunity for hotels and agencies

NB: This is a guest article by William Beckler, director of innovation, Lastminute.com.

Over the past year the travel industry has seen a surge in “last-minute” activity with the majority of mobile hotel bookings made by people looking for accommodation on their proposed day of travel.

It’s a trend that shows no signs of abating and while many hotel owner/operators have “wised-up” as to how to profit from this consumer shift, many more have failed to notice, with hotels left with both a revenue shortfall and distressed inventory.

While a year or two ago mobile could have been dismissed as a buzzword, mobile purchase of online travel has exploded such that hoteliers and online travel agencies are now making or losing significant revenue depending on whether they understand and capitalize on new customer behaviours.

Tablets and the rise of the mobile market have meant that people are now more spoilt for choice in terms of booking travel at the last minute.

Rather than allowing rooms to languish unused, savvy hoteliers looking to capitalise on this trend have jumped at the opportunity to unload their distressed stock at reduced rates, much to the good fortune of the consumer.

As a result of this positive reinforcement, more and more consumers, tablets or smartphones in hand, are realizing that if they wait until the very last minute to book accommodation for their upcoming city break they will be rewarded with the absolute best price, a price that they otherwise wouldn’t have been able to receive.

For consumers, the evolution of the booking process is becoming more and more clear cut—the further ahead one looks, the more expensive hotels will generally be, and the closer one gets to the date of travel, the cheaper rates will be.

Limitless

Anecdotally, some consumers are pushing this trend to the very limit, even going so far as to wait until they are actually on the hotel’s premises to book using their mobile device or tablet.

While some within the industry argue that consumers employing this practice run the risk of not being able to secure the hotel they want, realistically for most major European cities, there is rarely ever a case (with the exception of major events) of a city’s hotel stock reaching the 100 per cent occupancy rate.

By waiting until the last minute, consumers will nearly always be able to find a room at a preferred rate that they likely wouldn’t have been able to secure had they booked one or two months prior.

This presents a conundrum for both hotels and online travel agencies like Lastminute.com.

For hoteliers, the shift toward lateness and mobile means new pricing strategies that can maximise revenue across all time periods and for both online and mobile purchasers.

Is it possible for a hotelier to achieve an even higher average daily rate by taking optimal advantage of opaque and mobile-only channels?

For online travel agencies like lastminute.com there is a new challenge in handling the influx of demand for last minute bookings. In order to support hoteliers with moving large numbers of rooms at the last minute, supply and merchandising teams need to have a quick response.

No more campaign planning weeks in advance. Now it is about days and hours.

NB: This is a guest article by William Beckler, director of innovation, Lastminute.com and advisory board member for Travel Technology Europe (TTE). He will be appearing as a panellist on a number of sessions included in the conference programme.

NB2: Clock hotel image via Shutterstock.

 
 
Special Nodes

About the Writer :: Special Nodes

Special Nodes is the byline under which Tnooz publishes articles by guest authors from around the industry.

 

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  1. Lino

    interesting reading, maybe in addition to travellers demand analysis and other analytics, fixed/mobile booking cross-price elasticity might be useful either, if not yet evaluated, for new pricing strategies and for answers to the good questions.
    regards

     
  2. Amit

    Do these mobile bookings represent incremental ( additional) bookings for a travel agency, or do they just cannibalise the agency’s normal bookings (desktop or in store)? And if they do, how would we calculate by how much?? If anyone can answer they are a genius

     
  3. William el kaim

    The questions i have are: do people book last minute to get a better price ou to get a more luxury hotel for the same price? What is the trend on hotel spend? Do they sped more in the hotel (breakfast, wifi) once they got a better room rate?
    Is it just a new habit due to usage of new mobile apps that indeed leverage this model?
    What is the impact on taxi or transportation spend (not booking the nearest hotel to where you need to go)?
    Is it because people just like to gamble, and gambling is addictive, not booking!
    Most of current hotel search companies do offer best rate guarantee, so it could not be only rate!
    Is it due to a generation gap (people planning less)? Or is it due to commoditisation (easy to search and compare)?
    Still a mystery for me. We need more analytics!

     
 
 

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