IN-DEPTH: As mobile use rapidly increases, mobile specialist agencies and traditional OTAs alike are scrutinising how the overall average booking value varies depending on the device. This includes considering factors like the exact time the booking is made. Against this backdrop EyeforTravel’s Ritesh Gupta explores what mobile means to Expedia

The race to target the sophisticated mobile traveller is hotting up as OTAs plan to extend their desktop success in the mobile arena. There are several factors that now make mobile a force to reckon with in the distribution space. Devices are getting smarter and sites and apps are getting better, so mobile is gaining ground across the travel space driven by the ‘stair-step’ effect. There is no getting away from it; mobile is now core to the travel intermediary’s business.

Before delving into how Expedia is gearing up for mobile, consider the case for mobile:

1.    Ease of use:From a traveller’s perspective, planning and booking via mobile is not just about the convenience factor anymore. Ease of use stands out too now. A few days ago HotelTonight shared how it is trying to save seconds when a user is using its apps. For example, the mobile specialist agency is looking at ways to auto-complete the consumers’ while they’re typing.

These efforts are paying off which explains why the booking window is not just limited to same day travel. Says Expedia: “Online travel is a great channel for last minute voyages and we have seen that 70% of mobile bookings are within 24 hours of their stay, whilst 81% of people book a hotel within 10 miles of their location,” says Karen Galles, Senior Director, Market Management, Expedia Lodging Partner Services. “That said, we believe there is promise for longer term booking this year and in fact the 90+ day booking window is the fastest growing area year-on-year using mobile technology.”

2.    Incremental business or cross-platform optimisation: Galles says: “Data also shows that customers are finding trip inspiration through the mobile channel and shopping on mobile even if they book on a PC or elsewhere and it’s a wonderful medium to get that extra exposure.”

Mobile specialist agencies have experienced that they are able to attract buyers who would otherwise not be interested in a hotel, but are motivated by aspects like the value of a moment-in-time offer or the convenience of booking on their apps in few seconds. Plus, in the multichannel environment, even if a mobile is facilitating exposure or awareness and finally the booking is being done on any other channel, the role of mobile can’t be ignored.

3.    Last-minute distribution is still mobile’s forte: Travellers are conveying their preferred ways of booking with mobile. As highlighted by Priceline this week, apps offer hotel companies one more shot at ‘selling last-minute rooms to mobile-equipped travellers who already may be in, or close to town’. According to Priceline’s study of New Year’s Eve hotel booking activity, around 40% of all mobile-equipped travellers waited until after 5pm local time to finalise their New Year’s Eve hotel reservations.  Meanwhile, 65% booked their rooms after 2pm and 13% waited until after 9pm to make their reservations.

Hotel companies might be concerned about an issue like price integrity, but there is no denying that mobile is a consumer-friendly channel where entities can distribute their rates and inventory. “Mobile is something every hotel is going to need to participate with. As revenue managers we will need to ensure the hotels’ information is accurate, the rates are correct and the hotel has good placement on all of the mobile sites,” says Liz Uber, vice president of revenue management, Pillar Hotels & Resorts.

Here come the OTAs

After being sidelined by mobile specialist agencies, the likes of Expedia and Priceline are upping their game. “Mobile has become core to our business and will be a main focus of growth for our industry over the coming year.  We are a market place; people come to us to explore a broad range of hotel booking options and we need to make sure we provide the selection required,” says Galles.

Choice and variety are important for travellers and as a result OTAs are making sure their mobile apps and mobile websites allow users to quickly find the right hotel and book easily – providing travellers everything they need to research and book on the go.  

“We have more than 130 mobile sites in more than 60 countries and 35 languages and need to stand out in each one.  Although building good mobile sites and apps takes resources, so does localising them in foreign languages and accepting foreign currency but this is work that Expedia does on hotel partners’ behalf. In fact, hotel partners don’t have to do anything as we do this automatically,” says Galles, clearly indicating that OTAs are now planning to extend their desktop expertise in the mobile arena.

From here on the mobile pie is only expected to get bigger.

A benchmark for assessing such initiatives is the percentage of traffic being generated by mobile. While 10% is a decent figure, there are others who are pushing the same to 20%.

 “Our mobile apps have been downloaded more than 15 million times in more than 200 countries; a rate of 35 downloads per minute, emphasising the increasing demand,” says Galles.  In fact according to a study conducted by Morgan Stanley, mobile Internet users will surpass desktop users in early 2014 and in anticipation of this movement; mobile will continue to be a huge focus for our company in 2013.

New opportunities

Big OTAs have targeted the inorganic route in order to develop their mobile portfolio. Expedia acquired Mobiata in late 2010. Even Priceline’s acquisition of Kayak is expected to result in synergies in this arena. As Lincoln Merrihew, managing director of Automotive and Travel at Compete, recently said: “Because a lot of mobile technology is new, not legacy, there are likely greater opportunities for product development synergies for Priceline/Kayak in the mobile space.”  

Tablets and smartphones will be a big driver for bookings in 2013 and Expedia intends to focus on these areas to meet increasing demand.  “We know that tablet users operate very similarly to desktop users (ie. using normal booking windows), compared with iOS and Android which have similar usage metrics, typically using a shorter booking window; 70% of our mobile bookings on iOS and Android platforms happen within a day of stay,” says Galles.

From her experience, mobile apps are increasingly used for browsing and repeat bookings; these are seen as a bookmark on the phone for booking. “We know that people viewing our Expedia Hotels app on tablets spend much longer on the app and book further afield,” she says. This is due to it being a richer platform and people using it in more static situations, rather than on-the-go. In other words booking, browsing and so on is done at a more leisurely pace,” he says. 

On individual devices she has this to say:

·         Smartphone: Here last minute, individual experience and usage on the go (in planes, trains, airports etc.) stands out. Smartphone users tend to book more two-star and less four-star hotels than desktop users. It’s particularly true for Android where customers tend to have a lower average booking value.

·         iPad: Customers use tablets for inspiration and planning. They tend to book more in advance compared to smartphone users. The planning and booking experience is often shared in a group: with wife or husband, family, and friends. iPad users tend to book more four- and five-star hotels and less two-star hotels than desktop users.

OTAs believe both smartphones and tablet devices will be an increasingly useful channel this year. And they plan to work with hotels in case they want to offer a mobile-only deal to capture these travellers who are already in market and looking for a hotel room that night. Watch out for OTAs racing ahead as they maximise their own brand clout to target brand agnostic travellers who don’t care who they travel with.