Tuesday, 24 February 2015

Mobile – the ultimate weapon in the battle to go direct?

Everyone’s investing in mobile.  Some hotels are spending millions of dollars.  But is it really paying off?  If the results posted by hotel giant IHG this week are anything to go by, mobile can make a difference to your bottom line.  But where does the real value in a hotel’s mobile strategy lie?

Back in 2012 when most travel brands were just finding their feet in mobile, IHG reported mobile revenues of $330 million – up from $3 million in 2009.  With 9 brands to manage and 710,000 hotel rooms worldwide, maintaining a personalised customer approach was a top priority.

It certainly seems that the big brand, generic hotel experience just won’t cut it anymore.  What’s interesting is that the role that mobile plays as a key differentiator in the battle to win the ever-demanding travel consumer.

The slick mobile experiences offered by brands such as HotelTonight, Uber and Airbnb are difficult for large travel and hospitality brands, often tied to legacy systems, to emulate.  What’s more, mobile has turned the search process on its head, arguably giving the OTAs the upper hand.   After all, there is a limit to how many travel apps you can have on your phone.

But if hoteliers wish to compete with the OTAs as well as the new wave of digital-first travel brands, then significant mobile investment is a must.

In my view, for a number of years, hoteliers have placed too much emphasis on implementing a mobile strategy to deliver transactions.  Overall, mobile transactional values have remained low and so mobile wasn’t seen as a top priority (arguably until now).  

Whilst consumers searching for hotels via OTA mobile sites and apps gain from a wide variety of choice, hotels can really add value to consumers by using mobile to transform the guest experience and increase loyalty.

This strategy can be used to win direct business and help avert an over-reliance on OTAs.

For example, leading American hotel group Starwood, has a new program that allows guests to use their smartphone as a key if they book their stay through one of its hotel websites or its reward program.

Mobile is at the heart of global giant Accor’s five year, $280 million digital transformation strategy. Like IHG, using mobile to enhance the guest experience in the form of mobile check-in and check-out is a key feature of Accor’s new strategy.   Every service available offline in the hotel will be available via their mobile app. 

If hoteliers wish to really see their mobile investments pay off, they need to think smartly about how they can use mobile to ensure they are really adding value and winning direct business from travellers.

Not many brands have $280 million to spend but if mobile can be used successfully to win back more direct business and save costly OTA commissions, then for many hoteliers mobile will be the ultimate tool in the battle to go direct and well worth the investment.

This post was written by Gina Baillie, GM, EyeforTravel Ltd.

Join top travel brands as they debate what the future holds for mobile at EyeforTravel’s Mobile & Innovation in Travel conference, March 23-24, San Francisco.


 


1 comment:

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