InterContinental Hotels Group (IHG) says its industry leading developments in mobile booking sites and apps are now generating over $10m of revenue a month.

Published: 10 Aug 2011

InterContinental Hotels Group (IHG) says its industry leading developments in mobile booking sites and apps are now generating over $10m of revenue a month.

As the group announced its Interim Results to 30 June 2011, IHG’s chief executive Richard Solomons said, “We expect this to grow quickly as consumer booking preferences evolve.”

The company has seen a nearly 1,000 percent increase in room night bookings from mobile devices and surpassed the 2010 total number of room night bookings from mobile devices in only the first five months of 2011.

Last month the group became the first hotel company to launch app for Windows Phone as it announced the global launch of its Priority Club Rewards app for Windows Phone. IHG highlighted that most of its guests - 65 percent - who book through a mobile device are staying at IHG hotels within one day. To cater to this guest, the new Windows Phone booking app includes location aware capabilities to assist guests in booking hotels close to their location and navigating to the property.

The Priority Club Rewards app for Windows Phone follows the release of the iPhone booking apps for each of IHG’s seven brands in June this year. Other apps: InterContinental Concierge Insider Guides app for iPad (December 2010); the Priority Club Rewards app for Android (July 2010); and the Priority Club Rewards app for iPhone (April 2010).

In an interview with EyeforTravel’s Ritesh Gupta early this year, Bill Keen, Director, Product Management, Mobile Solutions and Emerging Products, IHG shared: “I think we are on the cusp of something very big related to mobile booking and planning. This time last year we were excited to see booking gains but they weren’t necessarily material to management when it was compared or indexed against our broader web volume.”

Keen added, “Now however, we are projecting mobile/web mix of over 3% to 5% in our forecasts. In addition, our booking window is expanding further out which means customers aren’t just using mobile for the last minute or distressed situations. They are actually using it for planning and convenience --granted we still see a very high index of same day bookings over our other channels, but it is lower.”

Competition

Competition and new entrants are a great thing for the mobile hotel booking category.

Travel companies, including intermediaries, are making rapid progress in this arena.

One of the start-ups, last-minute mobile hotel bookings specialist HotelTonight, a mobile-exclusive hotel booking app for iPhone, iPod touch and iPad, crossed the 500,000-download mark recently.

In a recent interview with EyeforTravel, Sam Shank, CEO of US-based mobile-only online travel agency HotelTonight shared that the immediacy and persistence of these devices - of always being with users - naturally leads to impulse purchases.

“Based on our customer surveys, we find a majority of HotelTonight bookers were not sure they wanted to book a hotel for that night until they looked at the app. They were compelled to book by the convenience of our approach, the quality of our hotels and the last-minute offers. So we're growing the entire travel market by bringing hotels new customers who would otherwise not stay in a hotel,” said Shank.

“It's inevitable that the growth of mobile bookings will continue to rise dramatically. Yet this growth will not replace non-mobile bookings. For example, mobile devices add no benefit to booking a highly-researched, advance-purchased family vacation. That said, within a very short period of time, we feel that for people on the go, there will simply be no other option than mobile hotel bookings,” said Shank.

In late July, Trover, a mobile discovery network where people share location-specific discoveries, was formally launched. The company believes its defining feature is its location-based discovery mosaic, which allows explorers to visually browse through an eye-catching collection of thumbnail images featuring places to see and things to do nearby. The company shared that during a limited spring trial, open to Facebook members only, the Trover community attracted more than 70,000 users in 150 countries. One of the founding team member is Rich Barton, chairman, who founded Expedia.com.

Convergence

The convergence of two technological shifts – with the rise of the smartphone use and the meteoric popularity of social media – has created a seismic shift in consumer behaviour. Now, wielding their GPS-enabled phones, social media users are more comfortable than ever before in sharing information about their lives, and also expect instantaneous access to information and purchasing no matter where they are in the world.

In its recently released Social Media and Mobile Strategies for the Travel Industry 2011 report, EyeforTravel highlighted that as travel marketers learn to harness the data now available to them, and as social media users continue to contribute to the data stream, these layers of information will prove increasingly valuable. Customised pitching, location-based marketing and increased opportunity to create lasting relationships and grow loyalty with customers are all opportunities that travel brands can take advantage of in the year ahead.

Most people on Facebook are checking/updating status by phone, so when you click on it, you’ve integrated social and mobile. The same mechanics apply when you talk about the pre-trip and in-trip experience. Those conversations are happening on mobile devices.

“Travel is the most social form of commerce because consumers are in a constant state of asking “where am I” and “is this the right place to be”. With that said, social integration can be a huge delighter with the guest experience at or near the property,” says Keen.

In a recent interview, Matthieu Heslouin, Cofounder & CEO, Wipolo acknowledged that the company’s offering evolved with the Facebook integration. Wipolo, a web and mobile platform, relies on its unique email parsing technology, social network integration and mobile integration for its offering. Wipolo allows users to have their trip and profile details at one place and also offers them the power to connect with their friends, family and colleagues in order to exchange trip plans, tips and travel statistics.

According to the company, till few months ago, Wipolo was a super productivity tool to have trips in one place. It was a 1-to-1 tool, very useful but not social and fun. “Coupling Facebook with our unique data repository enables us to develop the gaming aspect of travel,” shared Heslouin.

Location

Customers utilise the convenience of “always on, always tethered” mobile devices with location based capabilities to ease the booking and pre stay experience.

Certainly, the utilisation of GPS through the app or browser has become common place so customers don’t have to go through the process of entering locations when they search.

It is expected that the next stage of evolution will be where the device can eliminate redundancy with other travel aids like the credit card or room keys by consolidating them onto the deck through wallets or NFC.

RoI

Mobile is clearly working for some companies. Those which have invested in apps or mobile-optimised websites cite improved engagement with customers. Mobile works for some companies because they can point to direct bookings, while almost an equal number say it has generated very little or no ROI.

Travel marketers say they measure ROI in a variety of ways, including the number of app downloads, visits to their mobile websites, customer feedback, and bookings. They also cited customer service and maintaining in-trip contact with customers as being valuable returns on their investments. As for what doesn’t work, respondents say that mobile strategies fail due to insufficient time and resource allocation, highlighted the EyeforTravel report.

The report also says companies intent on capturing last-minute bookings and ancillary sales are those most likely to directly profit from the creation of apps and mobile optimised websites. Mobile is certainly most important to companies seeking to maintain contact with customers who are on the road, for customer care, recommendations and last-minute sales.