same-day mobile
4 years ago
 

Same-day mobile booking services – now there’s a hotel branded app for that

Hotels are apparently losing up to 30% of revenue from cuts in commission or merchant fees as a result of the rapid rise of the same-day mobile booking apps in the marketplace.

So says Mobile Travel Technologies, the Dublin-based mobile web and app technology company – leading it to create what it claims is the first white label same-day mobile booking service for hotels.

MTT says Eleventh Hour will address problems relating to inventory control, “revenue cannibalisation” and commission by allowing hotels to provide their own same-day booking service in a branded app.

The idea is that chains (clearly the target market, as opposed to small, independent properties) will be able to control their own pricing, set exclusive deals and the number of rooms made available each day, as well how to promote the offers.

MTT CEO Gerry Samuels says the most important element of the service is that the only competition in the app will be between hotels in the same chain.

“Moreover, for those hotel chains without a mobile offering yet, it is the ideal way to get a foot on the mobile ladder while selling last-minute empty rooms.”

The growth of services such as the high profile and US-based HotelTonight, European counterpart BlinkBooking and newbies such as Hot Hotels has triggered some concerns amongst hoteliers that they are, despite relative enthusiasm for the model, forced to relinquish some control over their product and pricing.

These issues were arguably compounded by the big boys of the online travel agency wading in with their own, similar services, such as Booking.com.

Commenting on the worries over possibly 30% of revenue slipping away as a result, Samuels says:

“Considering that the rate may already be heavily discounted, there is only a small slice of the pie left for the hotel as profit.”

UPDATE:

We asked MTT why would a hotel do this instead of just putting the same fucntionality into its existing app or mobile web service?

“The last-minute market is an emerging and distinct part of the hotel market. We know this already from the positioning of Booking.com Tonight’s app, Hotel Tonight etc. and it’s quickly becoming a crowded space

“Hotels would not integrate the Eleventh Hour Hotels app into their existing app or mobile website because they need to target distinct personas who need last second deals. By using Eleventh Hour Hotels app hotel chains avoid cannibalization of customers who would normally book in advance and pay the higher rates.

“With an Eleventh Hour Hotels app, the hotel chain can brand it and have a slight distinction in the app name such as ‘Hotel Europa Today’ or Hotel Europa Tonight’ so it is clear the app is only for same-day bookings.

“And with an Eleventh Hour Hotels app they can only target it to find new customers for unbooked rooms on any given night. And also they can control what inventory and deals they upload to the app and change it in response to how full or not their hotels are on any given night as well as matching it with predictable revenue/occupancy patterns.

“On the regular web, there is a significant segment that will go directly to the hotel’s website to book instead of via an intermediary. The same applies for mobile.

“Until now, a hotel chain’s only option was to give their last minute inventory to an intermediary. With an Eleventh Hour Hotels app they can do their own thing and retain control on last minute rates, branding, their positioning within this market, the last minute inventory they promote and how they market it

“Also the hotel chain gets a well-designed app with excellent usability, at no up-front cost that is entirely in their branding ! And with a commission rate less than half of the typical levels charged by an intermediary…”

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Kevin May

About the Writer :: Kevin May

Kevin is senior editor and a co-founder at Tnooz. He was previously editor of UK-based magazine Travolution and web editor of Media Week UK from 2003 to 2005.

He has worked in regional newspapers (Essex Enquirer) and started his career at the Police Gazette at New Scotland Yard in London. He has a degree in criminology, a postgraduate diploma in magazine journalism and publishes his first book - a biography about Depeche Mode - in early-2017.

 

Comments

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  1. Michael Hios

    A well-designed brand app (JetBlue’s app, which I use almost exclusively, is a great example) with focused, personalized functions trumps a full-featured website IMO. From my iPhone, I have a different experience if I’m using Safari or Chrome (due to cookies, cached info…) , but the app always provides the same exact functions in the same exact manner. I get ease-of-use and consistency with the app.

    Additionally, apps provide better ability to cache data for when a user is in low/no signal areas (ex: in-flight). Building less-dynamic info into app databases allows a user to still perform functions when bandwidth is an issue. A hotel brand may be able to build property data/amenities into the db to allow offline browsing/decision-making when those things are important to the buyer.

     
  2. Kevin May

    Kevin May

    @All

    we wanted to find out more as to why a hotel would want to launch a standalone service for this, rather than integrate into an existing service… Answer put it as an update to the story above.

    Thx.

    KLM

     
  3. conor

    I am all for Hotels embracing the last minute space, and innovation here is certainly needed. I worry that they may ´train´ users to wait for discounts on specific hotels which is ultimately detrimental to the industry and the hotel.

     
    • Clive Jones

      I am sure that hotels will be there for much longer than these “here today, gone tomorrow ” apps. I remember draw something sold for silly money and now is never used but the market is wise now and won’t make silly valuations on apps. I guess these booking apps are like PPI and cash generator shops, they are in fashion at the moment but anyone can create them in their bedroom and in the long run are pretty worthless.

      Don’t be baffled by tthe science, fancy marketing and propaganda

       
  4. Kathrina

    Our Hotel partners have innovative plans to promote their last minute inventory in a clever way to target new customers. With Eleventh Hour Hotels, the hotel chains can put the right product in front of the right people at the right time and with a great app!

     
  5. conor

    How would a non “non-loyal” customer of a Hotel Brand / Chain, end up with the app on their phone ?

    I agree it is vital for the hotel Chain to have control over how they target this market, but encouraging users to download a discounted app of THEIR brand will only lead to users becoming accustomed to waiting for discount prices. This is not the way and will lead to much greater cannibalisation of sales and revenues.

     
  6. Kathrina

    An important point to bear in mind is that most, if not all last minute bookers are not hotels’ loyal customers who will book in advance. They are last minute deal seekers. The last minute market for hotels is about securing new customers and incremental revenues for rooms that would otherwise go unused. The ability for the hotel chain to have control over how they target this market is very imporatnt, so this approach is not targeted at loyal customers and instead the hotel can carefully choose which nights and which cities and which hotels it offers last minute deals for, the time of day it promotes last-minute deals and importantly the hotel maintains ownership of the customer relationship.

     
  7. conor

    Clearly I am biased but in terms of “revenue cannibalisation” this service, whilst attempting to prevent this, will actually augment it.

    Hot, HotelTonight and most others rotate available hotels on a daily basis to avoid such cannibalisation and prevent the hotels loyal customers from waiting to book with us…… 11th hour does just the opposite!

     
  8. Michael Hios

    There’s more for the hotel to gain than a small bit of recovered profit. By having a branded app on the user’s mobile device, they have another advertising outlet and a method for capturing some brand loyalty.

     
 
 

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