Going Mobile: Key Considerations in Building Your Mobile Product Strategy

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October 01, 2011
Mobile Marketing
Darren Austin

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The mobile market presents a growing opportunity for hotels to reach an audience of highly incremental travelers. Growing numbers of consumers are turning to their mobile devices for information on where to travel, how to get there, where to stay and what to do once they arrive at their destination. In 2010, approximately 35 percent of mobile users said they expected to use their smartphones to book travel sometime during 2011.

Whether you are building a mobile website or a mobile booking app, or extending your property to mobile users via partnerships with online travel agencies and other mobile travel app operators, consider the following data and insights when determining how mobile technology fits into your distribution strategy.

Today’s global mobile marketplace is bigger than ever and is expected to continue gaining users at a rapid rate.  Over the past decade, online travel bookings have overtaken offline bookings in the United States as consumers gained the ability to research and book travel through online travel agencies and hotels’ direct websites.  Now, smartphones provide consumers a new level of control and flexibility to research and book travel, anytime from anywhere. 

At present, over 60 percent of the world’s population owns a mobile phone. That number is expected to grow by another billion users by the end of 2011, surpassing traditional home phones for the first time in history.  Of respondents to a recent PhoCusWright survey who reported taking five or more leisure trips per year, 50 percent reported owning and using a smartphone.  That number is even higher for corporate travelers, reaching upwards of 75 percent.

Achieving success in the mobile channel starts with understanding the mobile traveler and what mobile bookings currently look like. Today’s high-value customer is affluent, travels frequently and is not restricted to the home and office computer. To effectively reach this target market, hotels need to be where the consumers are – on their mobile devices.

On both the Expedia Hotels mobile booking app and the Expedia mobile website, more than half of bookings are made by travelers in-market and for same-day arrival. For example, in Las Vegas over 50 percent of mobile bookings are made on the day of arrival, compared to just over 10 percent of desktop bookings made on the day of arrival. 

Last-minute mobile bookings skew heavily toward airports and outlying destinations over downtown metropolitan areas. These mobile bookers may be road-weary drivers or airline passengers who are unexpectedly delayed. It’s logical to assume that they have ready access to a mobile device but not necessarily to a Wi-Fi connection.
Build It or Leverage What Exists?
The mobile platform brings different usability requirements than the desktop environment, and in some cases these differences are very pronounced. For example, online travel shoppers typically visit multiple travel sites before making a booking decision, but travelers looking to book a room for the city they are currently in, and for that very night, are not in a position to surf around.
In a mobile environment, convenience is king. Mobile bookers are most likely looking to view and compare their options in a single place, so having your property represented in the most popular travel apps and mobile booking sites gives you the best opportunity to be found and the best chance of filling an otherwise empty room.

The market for mobile apps in travel is extremely crowded and competitive. With tens of thousands of travel apps available today, it’s easy for a hotel’s mobile presence to go unnoticed and become largely ineffective, especially among users not already familiar with the hotel brand.  Only two hotel brand apps recently ranked among the top 25 travel apps available in the iTunes store, while the other apps that made the list were largely from OTAs, metasearch sites and independent price comparison sites.  

Additionally, the time and money needed to develop and maintain an app may be prohibitive for some hotels.  In that case leveraging a pre-existing app to reach the intended mobile audience may be a better use of scarce resources. 

Whether you choose to build your own mobile assets or leverage your access to existing mobile opportunities, make sure your pricing strategy addresses the mobile channel. For some independent properties, it may make sense to offer special mobile-only discounts to travelers booking within a given time frame, say within 24 hours of arrival. Hotels.com offers the ability to give specific rates only to mobile users that desktop bookers do not see. This enables a hotel to offer special promotions or discounts to attract last-minute bookings from mobile users.

Mobile travelers represent an audience of highly incremental last-minute travelers. Aside from last-minute reservations for unfilled rooms, the mobile channel provides hotels the opportunity to generate additional revenue during a traveler’s stay by enabling the hotel to send targeted mobile offers to its guests for spa services, onsite dining and in-destination activities. 

The mobile channel will only continue to grow. We expect to see booking windows lengthen as usability continues to evolve and more consumers use mobile devices to connect to the Web. The first priority in a hotel’s mobile strategy is to become accessible to mobile users. From there, it’s about delivering a more satisfying booking and travel experience. One thing is for certain: the importance of the mobile channel cannot be underestimated.

Darren Austin is the head of mobile evangelism at Expedia. He can be reached at www.linkedin.com/in/darrengaustin or @DarrenGAustin.

1 PhoCusWright

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