Attention please! For mobile bookings think rates, inventory and discounts
The discussion is starting to evolve around mobile’s role in facilitating hotel room bookings -especially in the case of apps. Today the trend of same-day or spontaneous bookings is fairly well understood, so mobile specialists are now looking beyond the one-day booking pattern for new opportunities.
Today revenue managers have to be spot on with their assessment of how mobile is going to impact the booking curve and where or when to discount. Here EyeforTravel’s Ritesh Gupta talks to Liz Uber, vice president of revenue management, Pillar Hotels & Resorts about inventory management for mobile-related bookings, discounting, and the impact of mobile distribution on traditional demand forecasting and pricing.
EFT: In your view what are the advantages of mobile as a distribution channel today?
LZ: I think the biggest reason mobile is doing so well is the convenience factor; ease of use, and general access. In this day and age everyone is busy and a computer is not always readily available. Being able to book “on the run” is a huge convenience that is driving this channel. In addition, several big hotel companies as well as third party online travel agents (OTAs) have created easy-to-use apps and have made their websites ‘mobile friendly’ so they provide accurate information in an easy-to-use format. Smartphones and tablets are now much more cost effective than they used to be and access to these devices is very wide-spread.
EFT: So what should RM executives be wary of when it comes to mobile distribution?
LZ: Technology is something every hotel is going to need to embrace. As revenue managers we will need to ensure the hotels’ data is accurate, the rates are correct and we have good placement on all of the mobile sites. As when the internet first became a popular way to book, there could potentially be rogue sites/apps that will attempt to sell inventory that is inaccurate or not legitimate, this is something we need to monitor.
EFT: How has the industry tackled inventory management for mobile-related bookings?
LZ: At this point we have not established different inventory methods for mobile-related sites, they are currently pulling from the inventory they have. As mobile increases, I suspect there will be new mobile sites that will want to tap into the inventory. Their ability to pull directly from the GDS/hotel inventory system, or need to be managed by an extranet will certainly impact their ability to be successful.
EFT: Targeted discount rates can be made available on brand websites, traditional OTAs as well as mobile. So is mobile really a new avenue?
LZ: Yes it is. In a lot of cases mobile is representative of your walk-in guest that is becoming increasingly savvy. I’m talking about your younger generation that does everything either on their smartphone or tablet. Maximising mobile will be particularly important to high walk-in markets like Las Vegas, especially as smart phones become more the norm. Creating an app or making your website user-friendly to mobile devices will be vital to booking the potential guest into your hotel. The next generation will be much more comfortable booking via their smartphone/tablet and we will need to provide them with the information and opportunity to book our hotels in that manner.
EFT: Can you list what RM executives should consider when it comes to pricing strategy and inventory management for mobile?
LZ: Ensuring you have priced correctly, especially on your retail rates, continues to be very important to managing mobile. In many cases, some of these reservations will be booked the same day or 24 hours in advance when some of your discount rates are not available. If a hotel is not priced competitively in the market they will not be able to convert this potential guest.
EFT: Would you say that mobile has shortened the booking curve and increased discounting? And are we moving towards differentiation of rates on mobile and desktop platforms?
LZ: Hopefully the hotel industry learned its lesson with offering discounted rates on different sites—ultimately the industry loses. It is important we maintain price integrity on mobile sites and don’t over-discount to gain business we would have booked anyway.
I think if we start over-discounting on mobile this will only cause more issues in the future. Ideally we are able to drive the ADR on this site due to the lack of discounts that might be available as well as some of the last minute nature of the booker.
EFT: What is the impact of mobile distribution on traditional demand forecasting and pricing?
LZ: I don’t think mobile distribution will really impact demand forecasting or pricing unless a hotel is able to shift some sort of new business from this distribution which seems unlikely. Hotels will need to continue to monitor trends and pricing to ensure they are competitive within the market.
EFT: The growth of tablets rather than smartphones might well be the key driver for hotel booking growth. Do you agree?
LZ: I think the increasing accessibility of smartphones and tablets will both work to drive hotel booking growth. As recently as a couple of years ago most individuals either didn’t have smartphones or data plans were too costly. As companies have been able to bring the cost of smartphones down and the data plans are becoming more reasonable, we are seeing more access to these devices. I think tablets will follow the same path and will be used more and more in the future for hotel bookings.
EFT: What trends do you foresee in mobile distribution over the next 12 months?
LZ: Mobile will continue to grow and the companies that embrace this and get in early will see a lot of benefits. Creating and marketing apps that are user-friendly and can promote multiple brands, be driven by GPS location and are easy to book will certainly be the front runners in this new distribution method. Unfortunately, just like the Internet, those that lag behind will spend a lot of time and money trying to catch up.