How Hotels Can Best Seize The Growing Mobile Opportunity
Bookassist's Des O'Mahony points out some painful truths for the hotel industry online, and recommends learn form their mistakes when looking at mobile
As we study the technology marketplace in early 2011, it is clear that the mobile space is growing at an unprecedented rate. It presents real and immediate opportunities to hotels to reach their customers and generate direct booking revenue for low acquisition cost.
How Hotels Missed The Internet Boat
Unfortunately for hotels, the guest has usually been well ahead of them in terms of their service requirements online and their knowledge of online technology. In the late nineties, as the web began to explode, the guest was already online and increasingly looking to book online. But hotels were far from ready to serve the online guest directly. The result was that third party channels stepped in as middlemen to fulfill the need and facilitate the online guest, taking control of that middle ground between hotel and guest.
Hotels spent much of the following decade paying high commission fees to third party channels that were servicing the hotels’ own guests online. Meanwhile the hotels’ own direct web presence was woefully inadequate and underpromoted, with little chance of converting lookers into bookers. The third party channels succeeded in taking strong control of the online space, and while they have certainly served the guest well, the hotels have been suffering the financial consequences ever since, with third party channels in control of many hotels’ inventories.
Gradually, hotels are realizing that they can sell quite successfully directly, that they can reach their guests directly online, and that they can do so with lower acquisition costs than the third party booking channels would have them believe. The savvy (but still too rare) hotel is embracing online marketing and social media and is no longer at the mercy of what the third party channel dictates in terms of rate.
But just as hotels have realized this past mistake, a new battle looms where the stakes are even higher. That battle is for the mobile space, and it is growing far more explosively than the rapid growth witnessed in web adoption. Hotels need to seriously invest in keeping up with guest requirements on mobile and ensure they don’t make the same mistakes in the mobile arena that they paid the price for in “traditional” web. It may seem a trivial market now, but it is set to change rapidly.
The Growth In Smart Devices
Let’s look at the potential that the hotel market faces. As former Google CEO Eric Schmidt remarked in early 2010 “I am struck by the explosion of mobile computing. Mobile is clearly going to win the battle with traditional computers”. These are ominous words that hotels would well profit from noting.
On the upside for travel, many reports have shown that the majority of customers are completely comfortable with booking travel online. A recent Google IAB/TNS Consumer Confidence Barometer survey of ecommerce purchasing behavior in Q3 of 2010 showed that an impressive 68% of customers both research and purchase travel online, significantly higher than any other category of goods or services such as technology, retail, media etc. The same survey shows there is ample evidence to suggest that this extends into the mobile area: 42% of people say they use their mobile because it is the easiest way to research or buy, while 49% of non-mobile users say they will use mobile in future to buy. Only 9% mention some reticence regarding security issues in buying on mobile. So hotels already have a captive and lucrative audience if they choose to reach them directly on mobile.
Now look at the rate of adoption of mobile technology. An October 2010 CNBC report on smart device acquisition stated that “Growth in Smart Device sales is unprecedented even in technology sales history” and figures from Apple, just one manufacturer, bear this out. It took Apple 680 days to sell the first one million iPods, a figure reached in 2003. In 2007, it took the company 74 days to clock up the one millionth iPhone sale. Last year, Apple shipped one million iPads in just 28 days. This is staggering growth in mobile internet-capable devices, and this is the space where the hotel customer is increasingly comfortable.
The result of this explosive growth in mobile internet access is that, according to Gartner research, and Morgan-Stanley, mobile internet access is expected to surpass desktop web access sometime in 2013 or so, with more mobile internet access devices (1.82B) in use than desktop or traditional computing devices (1.78B).
So we have the devices, and we have the willingness to purchase. Hotels need to act now to ensure they are maximizing their mobile presence and their mobile marketing and advertising strategies in order to capitalize on this fast-approaching perfect storm.
To App or not to App
In January 2011, Apple trumpeted its ten billionth app store download. Many hotels have asked if they should be on this app bandwagon. The answer is, “it depends”.
For the hotel that is looking to capture the casual rather than regular customer, an app is not an ideal solution. The casual customer finds hotels on mobile primarily via search, using Google or other engines on their mobile browser. When a hotel is listed on search results, the user taps to continue through to the hotel and does not want to encounter a barrier in the form of a request to go to the app store, find the hotel, download an app etc. The nature of the searching guest is to want information quickly, so they’ll just move on to the next search result if they encounter barriers. Understanding how your potential guests are finding you on mobile is critical to developing your solution.
What the hotel needs is a mobile website or webapp that instantly serves the mobile guest transparently and without barriers. A single tap from search results on mobile should deliver the hotel’s information and booking capability in a form suitable for the device in question, whether that be iPhone, Android-based phones, BlackBerry or whatever. No downloads or complications should be put in the users’ way.
Luckily, iPhone, Android and the newer BlackBerry devices (Torch) all share common web browser architecture, called WebKit, so minimal changes are required to get a webapp functioning well on all three. And since webapps can be built in HTML and CSS, just like regular websites, hotels need only invest in better web technology to serve the mobile customers’ needs. Webapps in HTML and CSS are easily adapted to new devices and platforms as they arise, so investment in a proper webapp architecture means you are building in future flexibility for new devices and standards. A Taptu Mobile Touch Web Report from 2010 showed that webapps grew at three times the rate of regular app development, with ecommerce being the fastest growth area in webapps.
Contrast this with the popular but fragmented app space. To build a great app for iPhone takes programming expertise that is not as readily available as web expertise. To additionally do so for Android-based devices means largely redeveloping your app solution, since iPhone and Android are on a completely different code base, speaking a different technical language if you will. Add BlackBerry to the mix and you are again developing in a different programming environment from scratch. Likewise Nokia/Windows Mobile. You are now faced with multiple development processes to give the same general experience to your customers, and multiple upgrade processes when you change information or when the platforms develop. Not to mention the fact that you would be relying on customers to go to the app store for their platform and search there for your particular hotel in order to find you, which is not the way that people traditionally find accommodation online and, by extension, on mobile.
For hotels with considerable repeat business and regular corporate guests, an actual downloadable app does make some sense - but as a complement to a proper mobile webapp solution, not as an alternative.
Good Old Fashioned Customer Service
It is easy to get bogged down in the technical details of what should be delivered, which platforms to target and what strategy to best adopt. But it is well worth noting that delivering solutions now on mobile to satisfy your customers’ needs is nothing more than a manifestation of good old fashioned customer service. If your customer is online on mobile, and you are not there to serve, then you have lost the opportunity to impress. To fail to embrace mobile now, or to cede your mobile presence to some third party, is to implicitly tell your potential mobile guest that you are not really interested in serving their needs and are content to let someone else do so.
As always, the key to success on mobile, as anywhere, is to understand what best suits the guests’ need, not what best suits the hotel's, and to deliver on it.
Dr Des O'Mahony is the co-founder and chief executive officer of Bookassist (bookassist.org). Bookassist's mobile webapp solution for hotels and hotel groups is a quickly-deployed and increasingly popular solution.