11 months ago
 

For big travel firms, the mobile struggle is real

The world is now, indisputably, mobile-first. In 2015, the number of smartphone users worldwide surpassed 2.5 billion.

NB This is a viewpoint by Travis Katz, co-founder and CEO of Gogobot.

In the US nearly 65 percent of media time is now spent on mobile devices while desktop usage has plummeted below 35 percent.

Even more telling: 85 percent of time on mobile devices is spent in mobile applications, not the browser.

This is a seismic change in media consumption, along the order of the original shift from offline to online (yes, it is that big). Yet companies across multiple industries have been glacially slow to switch from a mindset focused on desktop and mobile browsers to prioritizing development of an app-centric business model.

For online travel in particular, the mobile struggle is real.

The most storied players in online travel – the ones who built multi-billion-dollar businesses off the back of search – aren’t keeping pace with the mobile-first traveler. Not even close. In fact, many companies are so far behind that without a radical change in course, they’re unlikely to catch up at all.

That’s of serious concern because while the established order continue to polish their booking funnels, Google – a non-traditional combatant if there ever was one – is moving aggressively into the mobile space. It’s not remotely hyperbolic to say that, unfettered by regulators, Google has the capacity to absolutely crush the travel companies who depend heavily on the web for traffic.

All in the mind

The challenge in mobile is as much about psychology as technology. While the big travel companies built competencies around harvesting demand from search and efficiently running those users through a booking funnel, the challenge in mobile is different. It is less about efficient conversion and more about engaging and retaining users.

Another telling statistic: the average smartphone user has downloaded more than 86 apps but only uses 26.

In other words, when users download your app, it has a 70 percent chance of being abandoned. Few travel apps today make the cut.

Why is this?  

Most travel apps suffer both from fragmentation and a lack of stickiness. Think about that fragmentation from the traveler’s point of view. You launch one app initially to search for airfare and a hotel. Maybe you use another to read reviews and another to see where different hotels are located relative to the things you plan to visit.

You’d like to research what to see and do while you are there, which requires downloading and figuring out yet another app. A specific app is then needed for places to eat in destination.

Now we’re up to at least five – all for the same trip.

For the consumer, it’s labor-intensive, fractured, inconvenient, and – let’s face it – pretty annoying.

Add to this a lack of stickiness.

If all your app does is let me search and book a hotel or a flight, it’s a one to two session per year experience. That is not enough to build a relationship or a habit with a mobile user. Without a deeper level of engagement, an app is likely to languish on the forgotten screens of a user’s phone, making re-engaging the user when they are ready to book their next trip that much harder.

As a result, many apps earn the dubious distinction of being both a waste of time for the traveler and a waste of resources for the company that created it. Talk about trying to please everyone and pleasing no one in the process.

Aggregate scores

Google, of course, has the data to know what travelers are looking for in mobile, and is building accordingly. Taking a cue from Asia – widely recognized as being a generation or so ahead of the US in mobile innovation – Google’s forthcoming travel app brings together a broad range of travel related services into a “super app”, allowing travelers to book a flight or hotel, explore maps and city guides, research things to do, restaurants, and itineraries.

By consolidating all of the fragmented aspects of travel into a single, content-rich app, Google is betting on becoming the one must-have app for travelers, leaving the OTAs and other apps that focus narrowly on booking in their wake.

A handful of other players in the market have recognized the importance of serving the traveler holistically. Airbnb’s Brian Chesky famously pronounced, “Our business isn’t [renting] the house. Our business is the entire trip.

Just recently, he offered the world a glimpse of what he meant when the company briefly released an early version of Airbnb Trips to the Google Play store.  The concierge-style app moved decisively beyond booking a place to sleep – enabling travelers to research and book restaurants, explore attractions and local hang outs, create personal itineraries, and more.

Similarly, Booking.com made a tentative move toward expanding their offering by launching mobile “City Guides.” At the time I checked it out, major cities were missing obvious main attractions: New York City’s list didn’t include the Met or the Guggenheim and the Museo Picasso was absent from Barcelona.

Although Booking.com’s guides lack the depth and breadth of content to compete with Google for the traveler’s attention, the effort signals a recognition that it needs to incorporate content to engage the traveler throughout the travel experience.

Other travel companies such as Hostelworld and Homeaway have partnered with specialists to enhance their mobile offerings with rich content to help a traveler make the most of their travel experience.

The point? Recognizing that the only way to keep revenue flowing in a mobile-first world is through consistent app use is merely step one. Figuring out precisely how to do that is the real challenge. For travel companies, it means delivering the value that inspires travelers to keep the app on the first or second screen of their phone, not relegated to the small screen hinterlands.

It means timely, relevant and personal content that a user finds both engaging and helpful.

It means moving quickly to build that content machine – at scale – to compete effectively with Google and the significant competitive advantage it has via its Big Data machine. The alternative is to let an entire industry absorb Google’s death blow.

NB1 This is a viewpoint by Travis Katz, co-founder and CEO of Gogobot.

NB2 Image by canjoena/Big Stock

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  1. Richard McCartney

    Brilliant insight and to think that the 2 biggest OTA’s poured $3BN into Google’s coffers last year while it continues to marginalise them and take their potential customers further away from what they want.
    Where’s the travel tech to take personalisation to the level both in terms of the trust and knowledge needed to bypass Google. Will the travel industry collaborate to enable such a product to succeed across competing brands? Is it Siri, Facebook? Where is the competitor to Google coming from because it sounds like we need one.

     
  2. Daniel Wishnia

    Thank you for this article, agree 100%

     
  3. Brant Huddleston

    This is a superb analysis, and I agree with how you described the direction Google is taking the industry (like it or not) but not with your warning of the possible outcome (industry ”death blow”). What we are witnessing is creative destruction at its finest, with vast new opportunities being created as a result of Google’s aggression. Consider the following examples where the trend is always the same ~ from single purpose channels of service (e.g. five apps for one trip) to multi-channel “one-stop-shopping.”

    Scratchy single channel radios planted the seed of destruction for ornate and widely popular vaudeville theaters, but were themselves supplanted by multi-channel radios and now Spotify. Live actors and musicians either transitioned or died. So it will be for live tour guides whose stories can now be recorded and played back at will on a mobile device.

    Inefficient single purpose stores were supplanted by Wal-Mart, and they either transitioned or died. I submit the coolest, most eclectic and interesting parts of a city are where the transition was successful. And so single purpose apps must transition in the face of Google’s inevitable Wal-Martization of the travel/tourism industry, or they too will die.

    Who is successfully transitioning? Look at Niantic Labs, a Google spin-off. Their first app was Field Trip, a mobile tourism app, and a failure. They transitioned with Pokémon Go, a hit. Sure, it’s a game, but what is the outcome? People get out. They explore. They discover, and they learn. We should hope for a fraction of that success with our mobile tourism apps.

     
  4. Gloria

    Great article…thanks. I think you hit it right.

     
  5. Sebastian Juarez

    Very good article, I agree.

    Mobile users don´t like to hop between apps, and they want the whole experience in one App. This is what Vurb adressed early, and this is why Snapchat bought it.

    Discoverability is changing hands. And users are overwhelmed by so many choices.

     
  6. David Gregg

    I would be careful on taking the position on app usage purely on US stats.. mobile web isn’t going away and for many travel brands it will be important to have a mobile site, optimised for search. Many will be unable to break into the app space as you suggest. I would agree though that Google can dominate travel if they want (in markets where they dominate search) and Facebook with their cross device visbility have huge potential.

    Counterpoint on the positioning on apps vs mobile web : http://marketingland.com/morgan-stanley-no-apps-arent-winning-the-mobile-browser-is-144303

     
    • Travis Katz

      Thanks for the comment, David. I agree mobile web isn’t going away, and the Morgan Stanley data is interesting, but I think does not tell the whole story. In travel, local, and other verticals Google has decided it wants to keep for itself, the mobile web is becoming increasingly a pay-to-play game. Organic search has largely gone by the wayside. For example, if you do any travel-related search on your mobile device (try “Hotels in Las Vegas”) – you will see 1.5 full screens of ads first, then another full screen of Google’s own results. Organic results don’t start until screen 3. Yelp has shown that even in places where a user types “Yelp + restaurant name,” Google often shows ads and its own results first. Unless the regulators decide they want to intervene, the days of building a business on organic search are largely behind us.

       
  7. Thomas Martensson

    A very good article, some of the best one i have read lately, spot on !!

     
  8. Jeff Plowman

    A great perspective Travis. Simple and to the point. Love the clarity. The travel space currently is messy and shows signs of commoditization, but with one or two showing true Blue Ocean approaches. Good food for thought.

     
 
 

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