Mobile is a vital part of a hotel company’s distribution mix. This is a growing channel, so ensuring hotels are witnessing appropriate growth is vital for them. Also, if distribution or revenue management executives are not seeing growth then that should be a concern and appropriate action should be taken.

Hotel companies need to delve further to understand the behaviour of consumers on their different screens. In the latest EyeforTravel.com Social Media and Mobile in Travel Report, it has emerged that an average of 45.3% of travellers would make a last-minute booking on a tablet a week before their holiday but 33.4% would never do so. When it comes to mobile phones, 43.8% would book with a week to go, while 34.5% of consumers would not.

Here EyeforTravel’s Ritesh Gupta talks to Jeannette Ho, VP Revenue Management and Distribution, Fairmont Raffles Hotels International about how they are tackling mobile distribution.

EFT: Today, what are the main advantages of using mobile as a distribution channel?

JH: The trend towards last-minute booking, the younger generations’ full engagement on their mobile devices and corporate travel certainly favouring mobile as a distribution channel.  

EFT: What should be keeping RM executives awake at night when it comes to mobile distribution? 

JH: Some specific mobile strategies and services are targeting last-minute bookings with the push for deep discounts. RM should not fall into the trap of frequently providing last-minute inventory at discounts as this will undermine your full rated bookings and encourage people to book even later. The best rates, if any, should be available for those who book in advance.

The benefit of these players should lie more in their provision of curated and location specific inventory at the last minute instead of pushing the industry for further discounts. Coupled with other services that rebook when a lower price is found, like Tingo, it requires common discipline among RM practitioners not to enter into this downward cycle.  

EFT: What developments have their been inventory management for mobile-related bookings? 

JH: Most of the early proponents of last-minute mobile booking discounts have realised that the industry is not willing to provide sufficient inventory at deep discounts and have instead adopted a more typical best-available rate model.

EFT: Can you list what RM executives consider while working on pricing strategy and inventory management for mobile?

JH: A couple of points should be considered:

1.       Are mobile bookers a different customer segment with different willingness to pay, or the same customer segment simply using a different booking method?

2.       If you can identify a different customer segment then what fences should be put in place for differentiated pricing on mobile – eg. Last-minute room for those who did not plan to overnight in town, special location based inventory and price can be provided only after 2pm on same day.

EFT: Has mobile shortened the booking curve and increased discounting? Are we moving towards differentiation of rates on mobile and desktop platforms?

JH: Presently mobile is used more for last-minute bookings, and new mobile vendors are pushing for deep last-minute discounts - thus it appears to shorten the booking curve and increase discounting. But consumers are essentially behaving as they always have and will favour the channel and booking window that gives them the best price for the same product.

So if hoteliers do not perpetuate the mobile vendors’ push for deep discounts via the mobile channel, and provide the same rates across multi channels, then mobile on its own will not have a significant effect on booking curve or rate. It is often the same consumer who would also have reacted favourably to an advance-booking offer via multi channels. Or a business traveller who has no more than their same day notice looking for a hotel near their meeting venue and be willing to pay a higher rate for the convenience – thus the mobile device was only an enabler and neither influenced price nor booking curve.

EFT: The growth of tablets may well be the key driver for hotel booking growth rather than smartphones. What’s your opinion on this? 

JH: Tablets are more conducive for leisure travel planning and for luxury travel where rich media plays an important role in influencing buying behaviour and increases conversion. The ability and ease of search on tablet certainly inspires more travel overall – whether in terms of longer multi destination trips, increasing popularity of combining business and pleasure or encouraging more short break trips.   

Six trends: in the next 12 months Ho predicts the following trends

1.       Trip planning apps will be increasingly used so businesses that can insert their product and inventory into this path will certainly benefit significantly. 

2.       Search and recommendations would have to be more powerful to ensure that only highly relevant product and service options are provided via mobile devices. 

3.       Travellers will clearly have less and less time for extensive multi site searches.

4.       With increasing importance of F&B for luxury hotels especially in Asia Pac and Middle East, mobile could make a significant difference towards the success of hotel F&B outlets in terms of marketing, social engagement and certainly as a distribution vehicle of choice.  

5.       Location-based marketing will bring a lot of opportunities for hotels to feature their full range of services to the local market – efficiently opening up hotel services beyond the hotel guest. 

Within hotels as well, we see mobile distribution being a very effective means of encouraging guests to experience ancillary services, and thus increase average spend.