Listen up: There is a major job still to be done in mobile travel

Mobile is transforming many industries, travel probably as much as any. The out-of-home, often in unfamiliar places, nature of travel has made it almost a perfect fit for mobile as a technology.

Even back in pre-historic days (or at least pre-iPhone), travel industry companies like Zagat, Hilton and Amtrak used platforms like Usablenet to serve their content on feature phones.

But of course in the smartphone era, the method and style of user interaction is improved by orders of magnitude and whether it be via apps or the mobile web.

Now anything that could be done on the web can be done on mobile providing better customer engagement and enabling mobile commerce.

The travel industry, historically one of the most aggressive adopters of technology to enhance the business, was perfectly position to ride the wave of mobile commerce.

And in looking at the landscape of mobile apps and mobile web sites from airlines, hotels, OTAs and the like, you’d think that mobile bookings is the primary “job to be done” (using the theory by Clayton Christensen, noted author and Harvard professor on innovation trends) that travelers hire mobile devices for. But you might not be right.

Survey says…

There have been a number of surveys that you can point to that support booking as a primary purpose on a mobile device. There was a recent survey released by JiWire that would convince you that this is happening in large quantities today.

But this information, I submit, is wildly optimistic and more likely is representative of future intent, rather than actual behavior.

Just last year Atmosphere Research surveyed intended usage of mobile in the booking process and while actual ‘bookings’ weren’t at the top of the list of activities they would use a mobile phone for, they did score respectably.

And this survey doesn’t even cover many other activities that people use mobile devices for such as maps/driving or walking directions, destination information, itinerary management which are crucial to the traveler during their actual trip.

But neither of these surveys comports with actual transactions. Henry Harteveldt of Hudson Crossing recently released a report entitled Travel’s Mobile Centric Future in which he stated that only about 2%-3% of bookings are actually generated by mobile devices, citing 4% for Marriott, 1.6% for IHG and an un-named network airline that came in at 2%.

The fact that mobile isn’t a material part of how travel companies drive revenues today, doesn’t invalidate it as a channel. From a technical and business process perspective, the pieces are already in place to make this happen.

That is not the constraint.

So what are they?

1. Product complexity and comparability

In mobile, even more so than on the desktop, time is the enemy of conversion. Much of the trip planning and booking process is terribly complicated.

The number of results from an air itinerary or hotel returns hundreds of results. The tools for sifting through the results on mobile devices are mostly mediocre.

The ability to compare different choices is further challenged by merchandising strategies to obfuscate the total price of an airline ticket and vast differences in hotel products. This is one reason why HotelTonight has been so successful.

They have curated the choices to the consumer to three, vastly streamlining the decisioning process for the consumer and increasing conversion.

2. Product cost

When looking at mobile commerce statistics there is a reason that things like making a dinner reservation and buying movie tickets are pretty high on the list.

The lower the cost and commitment at the time of conversion, the higher the propensity to complete the transaction. As hotels and car rentals (at least in the US) are generally easy to cancel without penalties they psychologically easy to execute.

But making air reservations for a family of 5? The high cost and high change fees increases the perceived risk and encourages the traveler to double-check if it’s “a good deal” before committing to the purchase.

Flipping multiple tabs open is easy in a desktop environment, but not so much on a mobile device, particularly if you are using an app.

3. Time on device to complete the task

When people use their smartphones, the normal time per session is usually a couple of minutes. The more you can speed the decision and remove friction from the transaction, the better your results on mobile will be.

Again HotelTonight’s ability to complete a transaction in the time a Mike D’Antoni team takes to put up a shot, greatly contributes to their success.

4. Immediacy

If the traveler is in an urgent need to complete a transaction it gets done. It’s why day-of hotel bookings or making reservations at a restaurant for a meal later that day get done.

If it’s a decision that can get put till later without any consequences, it’s more likely it will get deferred.

5. International data roaming charges

This is a bit of a tangential, yet real constraint. International roaming rates are really high and many people will turn off the data plans during their trip. It’s hard to convert when you are offline, but that’s why God created WiFi.

What is the job travelers are using mobile for?

Convenience and context. Where you are and what you are doing at a given time heavily influences what people use their mobile devices for.

Sometimes it’s to make their life easier (mobile ticketing rather than carrying printed tickets), to kill time (Angry Birds and Candy Crush), share special moments (Facebook, Instagram), communicate (email, phone) or just checking the time.

The key is tying convenience and context to the mobile experience. For many travel companies, the short term focus should be on matching their mobile offering to things that actually impact the traveler’s experience post-booking.

Many of these post booking interactions can not only generate quite a bit of revenue, but can also comprise a lot of the profit potential for a travel supplier:

1. Support the whole trip

Trips are composed of many steps Remembering them all is hard and carrying around paper documents is anathema to the digital traveler. Hence the importance of itinerary management.

TripIt is not the most beautifully designed app, but it is one of the most used by travelers because it solves a real problem for them. But there is still much opportunity to enhance these products beyond ingesting emails and maintaining the itinerary of the traditional travel elements (air/hotel/car).

And if can be done from a supplier side rather than an intermediary, it would tighten the relationship between the customer.

2. Use location and context as upsell triggers

This is the biggest supplier opportunity. Many times people aren’t ready to purchase all the ancillary products at the time of booking. But there are many opportuntities to serve up those offers at the opportune time that travelers will not only accept, but would welcome them.

Here’s an example: A traveler has a flight at 9am from their local airport. The airline knows when they are leaving and what time they should arrive at the airport.

Now with mobile you have their location and you can tap into traffic reports and in some airports, the length of the security line queue.

So it would be pretty easy to figure out whether the traveler would be crunched for time when they get to the airport. If so, push out an offer to purchase expedited security lines that anticipates their need.

This is an opportunity to derive revenue while reducing stress. I’d buy that every time.

The last word

While it feels like smartphones have been around forever, the truth is that we’re still in relatively early days. Mobile technologies are where web technologies were a decade ago.

That many companies are still evolving their understanding of mobile technologies and how it integrates with their business and consumer behaviors lag their intent should surprise no one.

Nor should it dissuade anyone from continuing to invest in their mobile. But investment doesn’t mean hiring engineers to build apps.

Mobile analyst Bob Egan of Sepharim Group recently noted:

“Thinking about building an app is strategic, but building and deploying an app is tactics, not strategy.”

Exactly right.

Many companies rushed to build their first app and now simply iterate. Go back and re-evaluate the strategy.

Mobile IS strategic. Mobile (devices, not necessarily on the go) bookings will eventually become a mainstream. But it’s not today, so look for other opportunities to leverage mobile in your business.

This is a long game. And one day it will be the only game in town.

NB: Mobile airport image via Shutterstock.

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Glenn Gruber

About the Writer :: Glenn Gruber

Glenn Gruber is a contributor to tnooz and senior mobility strategist at Propelics , an enterprise mobile strategy firm.

Previously Glenn was AVP travel technologies at Ness Technologies, responsible for developing the company’s strategy and solutions for the travel industry.

Prior to Ness he held leadership roles at Symphony Services, Kyocera and Israeli startups Power Paper Ltd and Golden Screens Interactive Technologies. He also writes a personal blog, Software Industry Insights

 

Comments

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  1. Dan Sykes

    A great article and more important than ever now that mobile smartphones are the preferred browsing choice. In fact mobile searches are now more popular than desktop in over 10 countries (including USA and UK). Further to this the Google Mobile update means that websites which are not mobile-friendly can be penalised on mobile search results pages. I recently carried out a study of 20 of the UK’s most popular independent travel agencies and tour operators and found that 35% of their websites were not mobile-friendly… https://www.linkedin.com/pulse/how-mobile-friendly-uk-travel-industry-daniel-sykes

     
  2. Adrianne Buchta

    Hi Glen! As a traveler, I have to say #5 resonates most with me. I try to do all my planning, booking, etc, ahead of travel – but there’s always the need to use data – to pull up maps, fetch a cab, book dinner, etc. If you’re a biz traveler, it’s often times critical to stay connected and thus, stay productive, which means being reliant again, on data. But there are options. Admittedly, I work with a company that aims to alleviate this problem: Truphone, UK based global mobile operator, who offers a SIM for unlocked GSM phones that works across borders in more than 220 countries and provides significant savings and convenience (no SIM swapping, 30-90% savings over traditional carriers on voice, text & data, ability to have multiple international numbers assigned to a single SIM). Truphone’s post-paid solution is particularly enticing to the frequent business traveler, but they do offer a pre-paid version for consumers as well.

     
  3. Sarah Hughes

    Hi Glen, I’m definitely listening! The points that most resonate with me are no. 3. and an implicit takeaway for me, which is platform over product.

    Thank you for this great summation.

    Sarah

     
  4. Benoit Germaneau

    Hi Glenn

    Thanks for sharing your analysis. I completely agree with you: “there is major job to be done in the mobile travel”.

    I consider there are at least 2 other things to be done in mobile travel:

    Solve the checkout-payment process.
    See what Square and more recently Shopify are doing for the payment in shop. There are probably similar things to do for the payment during the hotel checkout. It could involve both guests, hoteliers and OTAs.

    Bring forward the sharing timeline.
    OTAs are expecting their clients to review the hotel they stayed in only after their stay. Guests traveling with a smartphone or a tablet are willing to share their opinion and pictures during their stay. And why not offer the customers that are about to book a hotel to ask a question directly to the customers currently staying in the same hotel?

    There are probably many other things to do …

    Benoit

     
    • Glenn Gruber

      Benoit,

      Thanks for the comment. On your point regarding payments, I’d actually put the hotel checkout/payment process fairly low on the list of priorities for hoteliers or even OTAs (except in pay-at-time-of-booking stays). There are many different mechanisms that exist today which could be easily integrated into the process such as PayPal, other mobile wallets or even the good-old “agree to pay with the card on file”. Any of these might be easy enough to implement.

      But I still hold that there is more to be gained in providing a highly engaging, context-driven app that helps enhance conversion of bookings and ancillaries which would in turn drive up the checkout bill, than just implementing the checkout itself.

      And you are most right on your last comment. There are surely many, many things that travel companies can and should do. Sarah Lacey of PandoDaily just made the point that most travel apps/sites are lagging behind those of other industries. http://pandodaily.com/2013/09/05/will-hotel-tonight-be-the-next-big-travel-ipo-one-of-wall-streets-biggest-hedge-funds-thinks-so/

      Best,

      Glenn

       
  5. Lucas

    do you know already PlaceKnow Travel Guide app for Android https://play.google.com/store/apps/details?id=com.seriousimpact.placeknow&hl=en

    it is prepared in order to travelers waiting e.g. in airport and wanna get some more info about place their are going to.

    What do you think?

     
  6. Matt Zito

    Hi, Glenn, nice analysis and article. Mobile bookings will most surely come about. It’s only a matter of time that users get comfortable buying via mobile. Online travel purchases went through a similar phase where it took time for consumers to trust entering their credit card into a website form and clicking the buy button.

     
 
 

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