The Investment Case
In the past, perhaps the most consternating aspect of developing a mobile strategy for travel and hospitality businesses has been the return on investment case it presents when trying to prioritize it to the top of a slew of technology development or investment initiatives such as CRM, websites, backend system upgrades, CRS/GDS work, recommendation engines, search engine optimization or any other priority.

Prior to 2012 mobile searches represented less than 20 percent of travel research and fewer than 13 percent of conversions (at lower rates), and prior to 2010 this was low single digits if existent at all in most cases. Without the mass of online Web or PC-based bookings, the mobile investment case has been hard for operators, businesses or marketers to make stick, especially when mobile has been seen as difficult to manage and execute with lower consumer adoption.

The latest data from eMarketer forecasts that between 2012 and 2016, mobile adoption will cross a critical inflection point for travel research and bookings in the United States. The May 2012 study U.S. Leisure Travel Digital Ad Spending Forecast and Key Trends, projects that mobile will triple in size with the number of online travel researchers growing from 23 million to 73 million by 2016, comprising the majority of travel researchers (53.9 percent) and the number of mobile bookers growing from 12 million to more than 36 million (33 percent) in the same time frame. 

Bolstering the concept of thinking mobile first and helping to make an investment case are the demographics and psychographics of early adopters and early mainstream users. Google reports that currently 83 percent of leisure travelers, 76 percent of business travelers and 70 percent of affluent travelers are researching and booking travel via mobile devices.

Mobile and Travel
With an ever-quickening pace of adoption of new technologies, especially mobile devices and communication opportunities, it is time to put mobile at the forefront.  Mobile thinking can be a radical departure for the travel and hospitality sector. In the past, travel and hospitality companies have built the proverbial catcher’s mitt by investing in a variety of technology, advertising and marketing initiatives that drive users to a central (often branded) website. The purpose of the website has been to meet all needs of all consumers, regardless of the end user’s position in the travel lifecycle of aspiration, research, consideration, booking, onsite upsell or post-stay sharing and retention.

Time and location data allows a savvy travel and hospitality marketer to easily distinguish a user who is looking for an airline ticket or hotel room for today versus someone who is in the pre-travel research phase. It provides very specific and distinct messages to people who are dreaming about a destination, researching a trip or need to book a ticket, a room, a car or a meal now based on the distance they are from the marketer’s location.

Unlike prior Web-based initiatives in which travel and hospitality marketers had to ask for and accept opt-ins to 1:1 relationships with some minority of potential and current customers, mobile offers true 1:1 communication with all potential bookers and shoppers as well as the opportunity to up-sell and retain customers based on the unique identity and preferences of the customer via phone, SMS, tablet or mobile email.

This new 1:1 relationship represents a sea change in the ability to manage customer relationship programs that rely on data analysis and insights based on deeply personal attributes and behaviors. With the right strategy, the right technology, the right people and the right philosophy of service, marketers can capture a greater percentage of a traveler’s wallet and extend the brand relationship with the customer over his or her lifetime.

Building a Mobile First Strategy
Due to the pace of change in digital technology and media, most travel and hospitality businesses do not have the right back-end systems to manage such programs. Here is a strategic approach to help in the mobile first challenge. As many know, an inflection point does not represent a wholesale change in strategy (i.e., do not abandon other digital media channels to lead with mobile thinking), instead use a nuanced approach managing a growing portfolio of multichannel, inter-dependent and leveraged initiatives.

Some recent data (see Figure 1 in linked pdf above) shows some of the greatest opportunities and what insights can be drawn from these trends.

According to Google’s Our Mobile Planet, more than 18 percent of consumers in the United States are already using smartphones to look for their next house, apartment or place to live. When tablet usage is added, that number becomes more than 1 in 5 consumers for perhaps the most considered purchase that Americans make. According to the same study, more than 78 percent of American’s use their smartphones while onsite or in store to validate or research or shop competitive information.

In 2012, 36 million consumers will research travel on their smartphones and 16 million will book travel, according to eMarketer. As has been the trend over the past four years, the majority of these bookings will likely continue to be last-minute bookings. In 2011, $2.6 billion was spent on last-minute bookings. By the end of 2013, it is expected that last-minute bookings will total $8.1 billion.  While this spend represents less than 10 percent of all booking transactions online, the rapid growth rate and the changing nature of the mobile ecosystem from primarily a research device to a full travel lifecycle system helps to bolster the investment case.

Are Mobile Shoppers More Qualified?
The resounding answer is yes. Mobile response rates to advertisements, which are served in a timely and relevant fashion, produce four times the average response rates on the Web. According to an August 2012 Nielsen Study, Mobile-Path-To-Purchase, 41 percent of mobile travel researchers ultimately make a purchase. 

In the past four years, those who invested in mobile primarily used the channel to drive offline purchases. With the advent of larger screened smartphones and tablets, businesses are starting to see mobile as a full lifecycle channel, feeding the travelers’ aspirations and allowing them to research, transact, communicate and share information with family and friends as well as with marketers.

The traveler’s intent and needs in the travel lifecycle are easier to service via a mobile first strategy.  According to Marin Software, a leading bid management tool, in SEM alone in June 2012, 18 percent of search traffic for travel in the U.S. was coming from smartphones and tablets. Directed search has intent built in. According to eMarketer, more than 60 percent of customers access their mobile devices when traveling to get maps, directions, restaurants, attractions, access social media and keep in touch with family and friends. Imagine the ease with which a savvy hospitality company with a mobile first offering can respond to a traveler who is looking at it on a map or is searching for directions to a destination that is within one mile, five miles or 10 miles of their location. 

Watching the Metrics, Following the Audience
Many complain that their audience reach has dropped but without a competitor picking up Web share.  When digging into Web logs and other tracking systems, companies often find that the audience has shifted to mobile usage. However, even though the audience has shifted, the company does not have a mobile offering comparable to its Web platform. eMarketer cites a weak mobile site as the No. 1 deterrent to booking on a mobile device.

The losses businesses experience through their Web traffic can be due to the audience using mobile devices to access the same information or to complete their digital travel research and booking. In order to see who is benefitting, the client needs to look at the reach and frequency of its direct competitors and of their intermediaries in the mobile channel.

Are you tracking mobile usage in your daily, weekly, monthly and quarterly metrics?

Providing a Great User Experience
Mobile metrics and customer behavior as well as expectations may be vastly different from what many measure for today. The complexity with which organizations now must measure likely requires some additional insight and perhaps tagging as well as some internal strategy discussions.

Start with a common use case: if your website isn’t ready for Apple^®’s iOS or uses any Flash, what are you serving up to the customer? Many major brands’ sites, especially those within the entertainment, food and beverage and real estate industries, rely on Flash or other technology that doesn’t translate to Apple’s iOS. How much of the audience is being served a bad user experience?

For business that do not know what percentage of its users are on which operating system or device, it might help you to know that Zillow.com reports that 40 percent of its audience on weekends is using mobile. Some hotels are reporting 50 percent to 75 percent of their audience is mobile, depending on the day of week and time of day. Given the growth rate of mobile usage across the hospitality, entertainment and real estate spectrum, if a majority of customer interactions aren’t mobile today, the studies forecast within the next three years the mobile channel will gain parity with the Web.

While mobile may not yet be the dominant way customers are reaching out, they are likely on a Web-enabled mobile device for at least part of their day. Businesses thinking mobile first will capture a first mover advantage among customers who are current highly engaged in mobile research and bookings as well as those who are just beginning to test mobile as a means to research and book travel.

The Early Movers in Mobile First
By and large, it is the travel intermediaries who are spending and acquiring mobile users, according to Millennial Media. Also, the U.S. trails other parts of the world in mobile first thinking. Given the current numbers across the rest of the globe, mobile is necessary. In EMEA and APAC more users are already using mobile as their primary channel. For global travel and hospitality companies, the well-designed and deployed mobile first strategy is the key to success for unit-level hotels, brands, ownership groups, real estate companies, CVBs, DMOs, attractions, restaurants and food and beverage operators.

Today’s mobile marketers have a variety of objectives as outlined by Millennial Media. Time of day matters since usage patterns tend to follow predictable patterns: tablets often see early morning and late night usage; smartphones are more often used during rush hour or at hotels during check-in.

Mobile Segmentation and Targeting
An entirely separate column could be written on mobile segmentation models and targeting. For the purpose of this overview start with a basic segmentation model (choosing platform, OS, referral source, ZIP code, device location as your first level framework) to create relevant information, timely responses and personal communication, and to track customer interactions over time. Organizations need the ability to use customers’ demographic and psychographic attributes as well as their personal communication preferences to create a truly personal 1:1 targeted offering. Thinking mobile first should be an important plank in your Hispanic, multicultural and Millennial acquisition strategies.

The speed with which one must interact with mobile customers on a personalized basis using all of these different attributes to create meaningful and personalized offerings means creating automated targeting solutions, multiplatform content distribution systems and developing the back-end platforms that enable rapid analysis and optimization of customer relationship data. These technology initiatives do not come cheap, so start planning a technology roadmap that will yield results and be flexible to serve unidentified needs.

Since this discussion is a primer and does not cover a host of related topics including: near-field communication, mobile wallet, high-end WAP among other things. When building a technology roadmap, make sure the strategy team reviews the latest technological advances and the opportunities each present, as they may be critical to success. The technology roadmap is a strategic discussion that you should be having with your senior managers.

David Atkins is a digital strategist with Digital DNA Infusion, LLC, and he can be reached for comment at david@digitaldnainfusion.com.

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