Mobile in Travel: Consumer and Industry Trends 2013

Extract from EyeforTravel’s Social Media & Mobile in Travel Distribution Report 2013

Mobile in Travel: Consumer and Industry Trends 2013 Extract from EyeforTravel’s Social Media & Mobile in Travel Distribution Report 2013

2.1 MOBILE TRAVEL CONSUMERS: WHO ARE THEY?
With mobile penetration exceeding 100% in most developed markets and developing nations rapidly following suit (We Are Social, 2012), every travel consumer also has the potential to be a mobile travel consumer. Consumers are using the mobile channel to access travel across all points in the purchase journey. It is increasing in search, research and booking. The proportion of travelers using mobile to book generally is growing year-on-year, but overall remains around a quarter of the whole. This figure leaps to nearly half in the last-minute segment, clearly demonstrating that mobile booking is a major factor when considering travel options one week or less before the travel date. “From the booking time curve… seen in desktop bookings, the mobile channel is not simply shifting those bookings. Mobile traffic is pure incremental growth in the last-minute window,” explains Lastminute’s Beckler. According to EyeforTravel’s 2013 consumer survey: • 41% of travelers prefer to research travel on desktop • 37.3% use a mobile device (smartphone or laptop) • Confidence in transacting via mobile is low at a little over 10%, but slowly gaining popularity. EyeforTravel’s latest consumer survey revealed that 37.3% of consumers worldwide accessed the internet on their smartphone. Desktop, however, remains the dominant means of

initially researching travel. An average of 10.4% of those surveyed began their research on a smartphone, while an average of 16.1% used a tablet. This is 30.6% and 24.9% fewer than those using desktop; an average of 41% of travelers prefer to research through this channel. Interestingly, more consumers prefer to speak to an offline travel agent (although they may also have a web presence) than are comfortable using smartphone. As mentioned before, this is not because they cannot access the technology – survey respondents are members of WAYN: a global travel and lifestyle social media network. The research shows that, despite a third of consumers using mobile devices to access the internet and a smaller but significant proportion being happy to use these platforms to research travel, willingness to book on mobile dips to a mean of 10.8% on a tablet and 7.5% on a smartphone. Those willing to book travel on a desktop computer holds steady at an average of 41.1%. This experience is echoed by Nigel Pocklington, CMO, Hotels.com: “We have 15 million app downloads and a mobile-optimized site that encourages customers to download the app. But we’re not seeing a lot of mobile payments. On the web, it will be interesting to see the progress of alternative payments which are on the increase, particularly in Germany, but I believe it’s too soon for mobile payments.” However, in the last-minute booking window (between one week before and on the day of travel) the trend shifts dramatically. According to the EyeforTravel survey, an average of 55.3% of consumers would be most likely to make a last-minute booking one week before travel on a desktop while 23.8% would never do so.

Mobile in Travel: Consumer and Industry Trends 2013 Extract from EyeforTravel’s Social Media & Mobile in Travel Distribution Report 2013

2.2 MOBILE TRENDS
Travel consumers are increasingly booking travel on their mobile. 63% more travel suppliers saw an increase in mobile booking volumes in 2013 over 2011, while 36.7% fewer executives reported no booking volumes in the channel. Conversely, the number of executives seeing no booking volume via desktop web doubled between 2011 and 2013, and progressively fewer executives have seen volumes of desktop web increase. Mobile’s impact on rate on return (ROI) has grown, according to EyeforTravel’s travel supplier and intermediary barometers. Tracking executive preferences over the last three years, there is a clear move towards the belief that mobile generates ROI (see Figure 11).

They also attest to a strong shift towards the channel generating direct revenue and as a result are beginning to increase investment in mobile. This increase has been cautious, however, and executives are likely to continue to remain prudent into 2014 (Figure 11). The hesitancy to increase investment in mobile could be due to: 1. Economic factors affecting budgets overall 2. Inadequate proof of the channel’s effectiveness 3. Mobile remaining a relatively small proportion of revenue overall The clear impression given by executives’ responses to the EyeforTravel barometers is

Mobile in Travel: Consumer and Industry Trends 2013 Extract from EyeforTravel’s Social Media & Mobile in Travel Distribution Report 2013

that mobile is increasing in importance. It can be expected that, regardless of financial input, executives will expect to see more returns from this channel in future. Booking volumes have influenced the way travel suppliers feel about the mobile channel. As can be seen from Figure 20, below, over the last 28 months there has been a move away from considering mobile as not important for sales (38% of suppliers in 2011) to important (33.3% in 2013). The number of executives considering it very important to sales has almost doubled in this period (from 4% in 2011 to 7.9% in 2013). “The speed of mobile’s evolution has been shocking,” admits Regional E-commerce Manager at Novotel North America, Jeremie

Catez. “But it’s not surprising. It’s multidevice behavior and mobile is supporting our distribution strategy. Will we even still be using desktops in five years?” In developing markets, the growth in mobile use is directly linked to initiatives encouraging mobile ownership. “The governments in Latin America have realized that part of development is to provide the middle class with access to the internet and better phone plans. This is happening at the same time as flying to South America is getting cheaper as a rule. [These are] two economic factors impacting our business. We had not diverted much investment towards mobile up to now, but next year we will have to improve our platforms,” reveals Felipe Rey, Digital Marketing Manager, North America, LATAM Airlines.

Mobile in Travel: Consumer and Industry Trends 2013 Extract from EyeforTravel’s Social Media & Mobile in Travel Distribution Report 2013

As travel suppliers’ recognition of the importance of mobile as a sales channel grows, it is noteworthy that the proportion of those believing it is critical to sales still remains low compared with more standard digital channels, including online search (32.1% felt online search was most influential to bookings in the last three months) and email marketing (20%). (See Table 2). Overall, the number of executives noting an increase in sales through the mobile channel has grown by an average of 17% year on year. Hotels.com’s Pocklington explains the rationale behind increasing spend on mobile: “We are spending to a point of marginal profitability. We haven’t come to a point where thought A looks better than B so we will stop doing B. We could see that mobile was an incremental part of the business that we needed to invest behind. But certainly some of that spend is being diverted from desktop now.”

“Brands have to think about online as being multiplatform and that’s there whether we like it or not,” states Virgin’s Bradley. “It’s just a fact that online is across multiple platforms and consumers are choosing to engage with online channels in different ways. It’s up to us to ensure we keep up with that. I wouldn’t see it as cannibalizing, but rather as an evolution.” Mobile as a sales and marketing channel is clearly demonstrated in Figures 20 and 21. Equally, executives understand its growing importance as an information channel. However, its usefulness as an operational tool is still seen as limited. Intermediaries feel it will be less useful than suppliers do, as there is less opportunity for mobile to be used operationally here. However, operations is viewed as a side issue and executives will be waiting to see the outcome of further trials such as IHG’s Stratford 2012 pilot (see Chapter 1: Industry overview) before making decisions to invest heavily in this area. Organic search is a major influencer of the customer journey from a desktop web standpoint. However, through the mobile channel, email marketing is enjoying success. In September 2012, 38% of emails were opened on a mobile, against 33% opened on a desktop and 29% via webmail (Litmus, 2012). Social media, considered by 14% of the travel suppliers surveyed to be the most influential to bookings, accounts for 27% of the time spent by users of the iPhone 5 globally (Velti, 2012). In the first quarter of 2013, Experian suggested that US mobile internet users spent 14 minutes per hour looking at email and nine minutes on social media networking. These were the top two activities for US mobile users (Experian, 2013). The same Experian study notes that while the time spent on social media networks increases three-fold (27 minutes) when on a desktop computer, the time spent looking at email is only a fraction of the overall time spent on a mobile (21.4%).

Mobile in Travel: Consumer and Industry Trends 2013 Extract from EyeforTravel’s Social Media & Mobile in Travel Distribution Report 2013

2.3 MOBILE’S IMPACT ON THE SEARCH AND RESEARCH PROCESS
The impact of the growing importance of mobile has…….

END OF EXTRACT

Want to find out more?
EyeforTravel’s Social Media & Mobile Strategies for Travel conference 2014
We’ll be discussing further key trends in mobile in travel at EyeforTravel’s Social Media & Mobile Strategies for Travel conference 2014 taking place in San Francisco, March 17-18. The speaker line-up includes Twitter, Facebook, JetBlue, Wyndham, American Airlines, Loews Hotels, Hertz, Silvercar, RitzCarlton and many more. Early bird prices expire February 7th. Don’t miss your chance to register at the lowest rate. Find out more here – www.eyefortravel.com/ mobile or alternatively contact: Gina Baillie GM EyeforTravel Ltd. Int.: +44(0)207 375 7197 US: 1.800.814.3459 ext. 7197 E: gina@eyefortravel.com

Social Media & Mobile in Travel Distribution Report 2013
The extract was taken from EyeforTravel’s Social Media & Mobile in Travel Distribution Report 2013. The full contents of the report can be found on the subsequent pages of this extract. To find out more about the whole report visit www.events.eyefortravel. com/social-media-mobile-travel-report/ or contact: Nikhil Vijayan Marketing Manager EyeforTravel Ltd. Int.: +44(0)207 375 7165 US: 1.800.814.3459 ext. 7165 E: nikhil@eyefortravel.com

www.eyefortravel.com

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