Executive Summary

Mobile phones and tablets are still new, but their impact is already felt in the travel industry. Travel sales on mobile devices, through both the mobile phone browser and native apps grew nearly 100 percent in the U.S. just last year, but there is still a lot of room for mobile booking to grow.

Despite all of the hype around mobile commerce, completely mobile bookings are still hampered by legacy platforms, cumbersome processes and designs that aren’t optimized for the small screen or on the go use cases. The conversion rate is considerably lower for travel products than mobile commerce in general.

This trends report will explore the huge growth in mobile queries and examine why this often fails to translate into mobile sales. Mobile commerce is often assumed to comprise native apps for iOS and Android. We will examine the benefits of native apps and the importance of having a mobile-optimized website for those who don’t download the app. It will also look at trends in other countries and the demographics of travelers who book on mobile devices. Finally, it will distill best practices for mobile booking based on conversations with experts and examples.

The Rise of Mobile Booking in Travel

Behind the trend

The adoption of smartphones and tablets since the iPhone debuted in 2007 almost goes without saying. Mobile’s share of global internet traffic is at 15 percent and rising, according to Mary Meeker of Kleiner Perkins Caufield Byers, a venture capital firm. There are already 1.5 billion smartphone users in the world, a 31 percent rise from 2012.

The mobile boom is already changing the way we buy travel products. According to comScore, travel-related U.S. web traffic from smartphones rose 67 percent year-over-year in 2012, and tablet traffic rose 173 percent. The two device categories claim 8 and 4 percent of the total, respectively. According to Google, American hotel-related search queries from mobile devices jumped 120 percent in 2012. Searches from tablets rose 306 percent.

This is already turning into a large segment of bookings for travel products. A May 2013 study by eMarketer said that mobile travel sales in the United States this year reached $13.6 billion, or 10 percent of the total among leisure and unmanaged business travelers. This is up from just $3.4 billion in 2011. By 2017, eMarketer estimates that mobile to reach nearly $50 billion, or 29 percent of all travel sales.

Individual companies also report a massive increase in mobile queries and sales. Kayak, the travel metasearch service, reported that global mobile queries rose 88 percent between 2011 and 2012. Revenue per thousand queries from mobile apps and browsers also increased from $35 to $54. Mobile’s proportion of total queries rose to 12.4 percent from 7.1 percent. Between 2011 and 2012, mobile searches increased by 88.6 percent while website queries rose 24.7 percent.

Expedia, the online travel agency, aims to make 20 percent of its bookings through mobile devices before the end of 2014. Booking.com, which is owned by the Priceline Group, saw its total mobile sales triple to $3 million in 2012.

True mobile booking has yet to catch on

The growth in mobile adoption and traffic is impressive, but still, relatively few customers actually use phones and tablets for the entire booking process. VFM Leonardo, a company that performs multimedia marketing for hoteliers, says that 47 percent all U.S. travel planning starts on smartphones. However, numerous hurdles such as poor design and a cumbersome payment process sends customers to other channels to actually book their trips.

Travelers are less comfortable with booking travel on mobile devices than they are buying other non-digital products. According to comScore, 51 percent of U.S. consumers make purchases with a mobile phone, but only 28% book travel on that device.

This discrepancy exists because users switch to another channel to make the transaction. The vast majority of bookings that originate with a smartphone are completed by dialing an agent or switching to another device.

HeBS Digital, an internet marketing firm that advises hotels on internet marketing and distribution, says that there is a major disconnect between traffic and bookings from both tablets and phones. Their latest data from clients say that mobile phones produce 23.8 percent of visits and 14.9 percent of all pageviews, but only 3.17 percent of hotel bookings. Tablets account for 15.7 percent of visits, 12.7 percent of pageviews, and 8.33 percent of all bookings. Revenue from pure mobile bookings only makes up 1.44 percent hotel revenue. Tablets bring in 8.72 percent.

The same is true for air travel bookings. SITA, which provides IT solutions for airports, recently polled air travelers in several global hubs and found that 76 percent of them own smartphones and nearly all would like to use them for finding information. However, only 5 percent actually use them for booking.

A March 2013 survey by JiWire, a location based mobile advertising platform, found that desktop is only slightly more preferred for travel product research among its clients (56 percent versus 48 percent for smartphones and 49 percent for tablets). When it came time to purchase, 63 percent use the laptop, 27 percent use the phone and 39 percent for the tablet.

Why mobile planners don’t book on mobile

There are some intrinsic reasons why customers frequently begin their travel planning on a mobile phone or tablet, but choose to use a computer or telephone to make the purchase, but some problems could be fixed.

The number one reason not to book travel on a mobile device is poor design. A survey by Google found that 36 percent of U.S. internet users are turned off by websites that are hard to see or navigate on a mobile device. Others complain that websites load too slowly on mobile.

This underscores the need for a modern web design that works across all three types of screens. Mobile-optimized websites should be navigable by touch inputs. A feature as common and simple as a drop-down menu to choose your country of residence could be impossibly cumbersome on a small mobile phone screen.

Other reasons why travelers call or use an more traditional channel instead of using mobile booking, according to HeBS Digital CEO and President Max Starkov, are outdated legacy user interface and a lack of seamless payment systems.

“Booking engines at this point are very cumbersome, and not geared toward mobile,” he says. “The fact that travel consumers have to enter their info is a major impediment on the small screen. It asks them to pull sensitive info and take a lot of steps, so they call.”

Especially for mobile use cases such as driving or rushing through an airport or train station, one is generally unable to take out a credit card and enter credit card details. In such environments, it’s just easier for most people to call. Very few travel-booking applications offer seamless second-time bookings once they have your information, but many hotel chain-specific apps do. Marriott’s app for example, can let you seamlessly search and book, but only after you set up an account through the desktop site.

One nascent solution to this problem is mobile wallets, but adoption for the various competing standards are currently low. Apple has its Passbook app that could streamline bookings on an iPhone or iPad. Google Wallet for Android is another contender, and individual credit card companies are also pushing their own mobile wallet apps. There is unfortunately a chicken and egg stalemate with these technologies where users aren’t materializing because few vendors adopted it and vice versa. Until these apps become more popular, or some other solution is conceived, there is no one single solution for the all providers to provide a seamless booking experience on the small screen.

Another solution to make payment smoother that HotelTonight and others employ is to use the phone’s camera to scan a credit card. Once you enter your payment info, it is saved in the app, allowing you to book a room in just three taps.

Lack of trust in the younger mobile medium is another issue, but one that can be overcome. The Google survey found that more than a fifth of travelers simply don’t trust their mobile devices’ security. The JiWire study showed that when they do make a purchase on a smartphone, 66 percent only feel comfortable spending under $1000, which puts many international flights out of range.

User interface design: Don’t make users think

The problems noted above relate to the fundamental challenge of design for mobile e-commerce. Hurdles such as getting handed off from an online travel agent or metasearch engine to the actual service provider’s website, putting in your name, address, credit card number or just calling an agent, are all opportunities to lose the customer. Especially when it comes to mobile commerce, laser-focused simplicity is key.

Metasearch websites see that especially on mobile, where multitasking is more difficult, users get lost in the handoff to a partner site for booking. Kayak, Hipmunk and others now offer the option of direct booking on their sites, rather than sending you off to another site.

TripAdvisor, the user-generated reviews site, is also about to roll out direct booking on its own site to avoid losing customers in the handoff.

Skyscanner, a flight metasearch company, does not do direct bookings at all, but to ease the transition to another site for mobile users, it lets them filter out search results that don’t display well on their devices.

“Although many of the airlines and OTAs may not offer a mobile optimized experience for their customers, we do have an option on the app to only show mobile optimized partners,” says Randi Wolfson, a spokesperson for Skyscanner.

The real mission of user interface design is to eliminate those hurdles, according to Michael Meikson, a user experience (UX) designer who has worked on projects for the Mandarin Oriental Hotel, South African Airways and Celebrity Cruises and teaches UX design at General Assembly a startup incubator and school for technical schools.

“Every decision point is a place where the user could break off,” he says. “Removing the friction points and making the booking experience smoother is especially crucial for mobile users whose attention is distracted. It has to be super simple.”

“One mistake that companies often make is they try to design for every possible scenario. The website becomes crowded with options. Especially on mobile, it’s best to design for the most common use case. The rest has to be hidden and revealed along the way,” he said

Designing a mobile website or app for booking is more than just shrinking down to a smaller screen size. It has to reflect the different ways we use them.

Smartphone

This is where simplicity trumps choice. People use their phones when they are on the go. They are distracted, and easy to lose. This is not the device for intrusive ads, surveys or upselling. Mobile users don’t need to see the entire universe of choices before them. A small number of good choices is better. Those choices could be improved by location data from the phone.

“Mobile marries customer intent with location,” says Henry Harteveldt of Hudson Crossing, an advisory firm that serves the travel industry. “If I can tell that someone is on mobile within a few blocks, I would give them a different offer for a hotel room than someone searching from 700 miles away.”

Smartphone web browsing also takes place at different times of day, according to Chitika, an online advertising network. North American web traffic from mobile phones peaks between 9 and 10 p.m. Eastern Time, as business hours across the continent close. It rises again at 8 a.m. as users check their phones on their way to work.

Another defining characteristic of mobile, as opposed tablets and PCs, is that the booking window is much shorter, and it is typically for shorter stays. This is why same-day bookings with proprietary discounts are much more popular on smartphones than other devices. Marriott, for example, says that 38 percent of same-day bookings come from mobile phones.

A smartphone is also the device that travelers are most likely to take along with them to their destination, which makes it a useful channel for offering optional services. In the next few years, booking for attractions and entertainment is expected to grow considerably. Fledgling applications such as Desti are already working on solutions for this.

However, mobile use doesn’t always happen on the go. A survey by BBDO found that 68 percent of mobile internet use takes place at home. ForeSee’s Mobile Satisfaction Index: Travel Edition, which focused on 25 U.S. travel brands, also found that 70 percent of those who book travel on mobile devices do so at home, while 12 percent are on the go when they book. Still, mobile is the only channel that is likely to be used while on the road. Aside from the few tablets that use mobile 3G or 4G data, it is the only channel that can easily pinpoint the user’s location.

Tablet

This is the ideal form of computing for me-time on the couch, and its use bears more similarity to the desktop. The tablet is portable, but used at home very often. When using a tablet, the user is more focused and receptive to more complicated layouts. Tablets are the ideal device for showing rich media such as high resolution photos and video to promote a destination, hotel or other travel service.

Tablet users typically have higher incomes. According to comScore, nearly three in five American tablet users have incomes over $75,000. A recent Hotels.com survey showed that 71% of iPad users book hotels with three or more stars.

Tablet use peaks sharply between 7 and 10 p.m. Eastern, but it doesn’t take off in the early morning commuting hours as smartphone use does.

PC

The desktop and laptop still reign supreme when it comes to travel booking. It’s easiest to shop around and make comparisons with a desktop browser, and even outdated booking designs are easier to navigate. PC use is high through the day, and peaks in the afternoon during business hours, but people frequently plan their trips while the boss isn’t looking.

Mobile and the sharing economy

Airbnb, the application which allows people to easily turn their couches and unused rooms into a makeshift bed and breakfast, is increasingly looking to mobile to make the process of renting much faster. Unlike hotels, regular apartments don’t have a front desk, lobby or concierge. Nobody is responsible for confirming the booking right away. In an interview with the Atlantic, CEO Brian Chesky said that Airbnb is rolling out a new product called Insta-book, which will work just as quickly as booking a hotel. Chesky says that 1-2 percent of Airbnb hosts have it already.

Airbnb’s mobile app speeds up the process, as both the host and the guest can both coordinate from anywhere. About 25 percent of Airbnb’s traffic now comes from mobile devices.

Rival HomeAway, which also helps people rent out their own homes, says that most of their customers don’t need a quick last-minute booking option. The website gets 27 percent of its traffic from mobile users, but users cannot book from the mobile site or the native smartphone apps.

“Traditionally, vacation rental bookings occur 90 days before the trip is taken, on average,” says Venu Venugopal, HomeAway’s Vice President of Product development. “Travelers typically have questions for owners about the property and spend time discussing the details of their trip with the owner or property manager — a conversation HomeAway encourages. While travelers desire the ability to book online, last–minute vacation rental bookings are less common than hotel bookings.”

Q&A with HotelTonight CEO Sam Shank

HotelTonight is a prime example of a mobile travel app that gets it right. The app is only available for mobile phones, and offers tonight-only and last-minute deals on hotels. Even on a fresh download, the app assumes a lot about your intention through the phone’s stored data. It knows where you are and what your name is. It assumes that you want a hotel room nearby, and you want to check in fairly soon. It gives you options, but just a few. You can get a place to sleep within seconds, even if you are using it for the first time.

Skift spoke with Sam Shank, the CEO of HotelTonight to glean some advice on what makes a successful mobile app.

I find it interesting that I can’t book a room with HotelTonight without a smartphone or tablet. Why go mobile exclusive?

When we started thinking about the idea in 2010, the driving force was a strong sense, after years in the online travel industry, that a true win/win last second booking tool for both hotels and guests was possible but had still not been invented. The advent of smart phones allowed us to interact with customers in new ways, and we determined that by focusing exclusively on mobile devices and on the last second use case, we could build a beautiful, fun and eminently useful service for both hoteliers and guests. The industry and consumer response has surpassed even our lofty goals and has allowed us to bring this concept to over 7 million customers throughout North America and Europe (and counting).

Being mobile-only also allows us to focus on building the best possible apps, and the best possible customer experience. This ability to say what we are NOT doing has been extremely liberating for the team, and has allowed us to attract some of the world’s best engineering talent to solve the technical challenges we face.

It’s interesting that your product is just laser-focused — does one thing and does it very well — but it’s still the most popular commercial travel app in the Apple app store. The next few are online travel agents that can perform a variety of tasks. Are you planning on offering more than tonight-only deals?

Because the opportunity in last-minute / tonight only hotels is so enormous, HotelTonight has no immediate plans to expand into other sectors. By staying focused on doing one thing well, we can do it better than anyone else.

I would suspect that any given person would only have a small handful of apps for travel. How do you promote or distinguish yours to make sure that it is one of them?

HotelTonight offers on-demand booking at top hotels in over 150 destinations across the globe, and specializes in independent/boutique properties with a variety of categories to choose from so travelers can stay at a hotel that best suits their needs.

We differentiate in a number of ways:

1. Our technology is built from the ground-up for mobile. So, amongst other benefits, a consumer can go from opening the app to having a hotel reservation – completing an entire hotel booking – in less than 10 seconds, in 3 taps and a swipe.
2. We only work with great hotels we personally select. We screen every hotel and monitor their quality via guest ratings. If a hotel isn’t good enough, we stop working with them. It’s not worth it for us to put someone into a poor quality hotel where they will have a substandard experience.
3. We continually innovate with mobile-only features that take advantage of the platform. For example, our Snap Your Stay feature allows users to post and share photos of their hotel with other HT guests and through their social networks.
4. Our support team is world-class. We are advocates for our customers. We respond to emails in less than 10 minutes on average. And I personally read every support email.

Some data that I have seen suggests that mobile booking, especially last-minute booking is mainly a business traveler’s phenomenon. Do you think it can become more popular among leisure travelers?

Just under half of our customers are business travelers who often don’t know where they need to be until the day-of and appreciate the value, quality and convenience of HotelTonight. The other half are spontaneous leisure travelers who use HotelTonight for a special occasion or last-minute getaway. In general, we are creating a new source of demand for the hotel industry – a majority of our customers tell us that they didn’t need a hotel room when they woke up that morning, but were swayed to book a room because of what they found at the last-minute on HotelTonight.

Do the hotels that you partner with express any trepidation about conditioning their customers to be accustomed to deals, much the same way that Groupon has created a generation unwilling to pay full price for a massage?

We agree that offering same-day discounts each and every day on mobile devices is bad strategy and will only train customers to wait to book. We would never advocate this strategy for any business, let alone a hotel, because it destroys the credibility of the hotel’s regular rate strategy and creates what is essentially a new “regular rate.”

By contrast, we limit our results to only a handful of hotels, rotate them every day to ensure the lineup remains unpredictable, and delay the availability of these rooms until noon the day of check-in. While this limits our potential market, it is a trade-off we are willing to make to ensure the app is valuable on a long-term basis to our hotel partners.

We have found that more than 60 percent of our guests did not plan on staying in a hotel before they picked up the app that day, and more than 90 percent had never stayed in the hotel they ultimately selected on HotelTonight. These results prove that by utilizing a tailored approach with real restrictions like HotelTonight, hotels can indeed take advantage of the impulsive nature of mobile users without negatively impacting their existing rate strategy.

Additionally, it’s worth mentioning that HotelTonight offers rooms with last minute discounts, but also non-discounted rooms. A significant percentage of HotelTonight customers book with us because of the convenience, curation and amazing customer service we provide – for them it’s important to get a room at the right hotel, not necessarily the lowest price or biggest discount. And our hotel partners always have the control to offer a large, small or no discount at all.

Do you have advice, actionable insights or best practices to share for companies trying to understand mobile booking?

Stay focused. I think the best mobile apps can be defined not in a few sentences (like a web company) but five words or less. For HotelTonight, it’s “on-demand hotel booking” for uber it’s “hail a cab” and for GrubHub, it’s “bring me food.” Apps and their associated brands that try to do too many things simultaneously won’t be able to get the mindshare on a mobile device where simplicity and precision rules the day.

Apps versus mobile-ready websites

The two ways of enabling customers to book on mobile devices are native apps and mobile-friendly websites. Apps are more popular and worth investing in, but a responsive mobile website is just as important.

Booking with native apps that run in Apple iOS or Android trump browser-based booking, but not by much. A study by comScore and Expedia showed that 56 percent of hotel guests on smartphones and tablets prefer booking with a native app, as do 58 percent of airline customers.

In comparison to mobile-friendly websites, apps give the designer much more freedom. Since both main operating systems share a defined design language, users often find apps very easy to navigate. Individual brands also use apps to manage loyalty programs, remember guest preferences and send out deals and incentives.

“You hear a lot about HTML5 and responsive web design, but frankly, the app experience is difficult to beat in the near term because apps can use animation, sophisticated navigation settings, and offline usage, says Patrick Payne, CEO of Quick Mobile, which produces custom mobile apps and websites for conferences and events.

Gloree Centeno, Senior Director of eBusiness Development at Hertz says that her company’s mobile app has similar functionality to the desktop and mobile website seen in the browser. However, she says that the biggest advantage that only comes with the mobile app that can’t work in a browser window is local storage of data. It is especially useful for travelers that don’t always have access to Wi-Fi or mobile data.

“We store as much stuff as we can store locally. If you lose your Wi-Fi connection, which happens all the time, you won’t lose what you entered into a form,” she says.

Kristy Streefkerk, Senior UI Designer at Quick Mobile, says that gamification is a good way to a growing trend for mobile apps to differentiate themselves. Gamification refers to the use of play for a non-game purpose, such as socially-driven contests and earning loyalty points. Games could be a supplemental tool that encourages users to keep the app after the primary job of booking.

The trend is already starting to gain ground in the travel industry. For example, TripAdvisor uses badges to reward users for writing multiple reviews. This is also useful for differentiating which reviews are most trustworthy. Some companies use games and rewards to try to get employees to adhere to corporate travel policies and stay within budget. Jet Blue recently updated its TrueBlue loyalty program with badges that give people real-world rewards points for flying with JetBlue.

“Leveling up” to better rewards could encourage the users to keep the app and use it again.

However unless you give customers a reason to download your app, such as easier booking, loyalty rewards or preferred bookings, developing an app might not be worth it.

Meikson, the user experience designer, says that not every travel provider needs an app capable of handling booking. He says that responsive design, which adjusts the layout to accommodate different screen sizes and orientations would suffice for most companies because users probably already have too many apps in their phones that they seldom use. It is also cheaper if you have just one codebase to manage.

Simply optimizing the main website with responsive design, could boost sales. Travelocity revamped its website in June to make it display well on mobile, and within two months, it saw bookings grow 6 percent on iOS and 8 percent on Android, according to Mobile Commerce Daily.

Responsive design also lets the user hold the device however he or she likes and still get have a good experience.

“When we do research we put a huge amount of effort into making sure that the user could pick up their device in the most natural way possible for them, and still let it work,” says Guy Redwood, founder of Simple Usability, a U.K.-based behavioral research consultancy that has worked for several clients, including Jet2, the online travel agent. “They turn them around at a point that makes sense to them. Everyone does it in different ways and responsive design is a way for it to work across all mediums.”

Aggregators dominate, but loyal customers use brand apps

Smaller hotel chains might also think twice before investing in a mobile app. For most brands, a mobile-optimized website should suffice.
Robert Cole, a hotel marketing consultant, says that individual hotel brands have a hard time competing with online travel agents (OTAs) and other travel aggregators for space inside users’ devices. He looked through popularity and star ratings of hotel-related apps on app data site Xyo.net, and found that far fewer people download the individual brands’ apps than the aggregators.

“Individual brands are getting snowed over by OTA sites,” he said. “When you look at the satisfaction ratings, they are even lower.”

A major hotel with multiple properties or a huge, sprawling resort such as Hilton’s Hawaiian Village could benefit from an app suggesting things to do and events. Brand-loyal customers, especially those who expense their travel, are most likely to download and use a branded hotel app. But if the customer is just booking for the night and moving on, they probably won’t need an infrequently used hotel brand app cluttering up their phones.

“A lot of individual hotels have to understand the traveler’s desired relationship with them. They think the customer wants to get married, when frankly they are looking for a one-night stand,” Cole says. “The super brand-loyal people will use the app all the time, but especially leisure travelers are more brand agnostic. They might not care.”

Who mobile bookers are

Travelers who book on mobile devices tend to be younger and typically spend more money on travel.

Travel Weekly’s 2013 Consumer Trends Survey says that U.S. smartphone booking rose 5 percentage points to 30 percent of the total in 2013. For those who spend more than $4,000 on travel, that rate was 36 percent and 35 percent of travelers who take three or more trips in a year. Even 28 percent of travelers who used a traditional agent booked on a mobile device.

Mobile bookers skew young. The average mobile air booker on Priceline.com is 32 years old, whereas the average desktop computer user is 38. Travel Weekly says that it is catching on with older users. In 2013, the portion of 35 to 54-year-old travelers using mobile booking rose from 23 percent to 33 percent. This year, 24 percent of over-55s booked on a mobile device, up from 14 percent in 2012. Expedia’s Future of Travel report, released in October 2013, finds that a third of travelers under 30 in 24 countries book on smartphones and 20 percent book travel on tablets. For those over 45, only 12 percent have booked travel on a mobile phone and 9 percent have done so with a tablet.

They are usually on the road or in the destination before they book. Expedia and comScore’s U.S. study says that 86 percent know their destination ahead of time before they book. A survey by Priceline.com says that 43 percent of mobile Tonight-Only bookings are made while in moving vehicle.

Sarah Gavin, a spokesperson for Expedia says that 24 percent of people who make mobile hotel bookings make reservations within 10 miles of their current location and 60 percent begin their hotel stay within 24 hours. Most of their stays are for just one night, she says. The peak time for mobile bookings is 5 p.m.

Data from Hotels.com also found that in the first half of 2013 60 percent of U.S. mobile bookings were for same-day check-in and 70 percent were booked for just one night. The company also found that iPad users were more likely to book stays longer than three nights than iPhone or Android phone users.

They also tend to be business travelers. HRS, a European hotel portal, says that half of business travelers have booked hotels from a smartphone or tablet already and another 25 percent plan to do so. Only one in three leisure travelers have booked on mobile and a quarter plan to.

The mobile booking population is slightly more male than female. HRS says that 34 percent of men and 27 percent of women book with mobile devices.

Mobile customers tend to be repeat customers. The Expedia/comScore survey found that eight out of 10 American smartphone bookers and nine out of 10 tablet bookers would use that device again. Hotwire also agrees that once a traveler books via mobile, they are much more likely to continue using a mobile method. Creating apps and highlighting their capabilities could help customers continue to book through this channel.

Hotel booking works well on mobile

Hotels are more likely to be booked on mobile devices than any other travel product. Hudson Crossing’s survey found that 30 percent of U.S. smartphone users and 40 percent of tablet users are interested in booking a hotel on that device. A TripAdvisor survey also found that 42 percent of respondents booked or researched accommodations on mobile while 34 percent booked or researched flights. Hotwire, the discount online travel agent, offers flights, hotels and car rentals on the web, but its mobile app only lets you book hotels. Sabre Hospitality Solution also reports that though 60 percent of bookings done online or over the phone are made a week in advance, 47 percent of mobile bookings are done with less than three days of lead time.

“Right now, we imagine that hotel bookings are leading the charge because they’re more likely to be the ‘last-minute’ solution,” says Sarah Gavin of Expedia. “Where you used to drive down the highway and look for billboards directing you to local hotels, now you look to your phone and can see what’s available for what price and where it’s located – all without leaving your car. Or for business travelers, you can do this on the go if you need to book another night at a hotel.”

Flights and car rentals on the go

Booking air travel on mobile is somewhat less popular. Leisure travelers are used to seeing vast price discrepancies for virtually identical flights, and typically wish to shop longer and look at options. Experts at Hotwire also say that air ticketing doesn’t fit as well for the on-the-go mobile mindset.

“Currently, our mobile customers place a strong emphasis on last-minute bookings and tend to be rather flexible with their travel. Hotels, in particular, fit nicely into that trend giving travelers the flexibility to book last-minute and still score big savings. Flights are different; customers who wait to book airfare until the last minute often end up paying more because of the difference in the booking window,” they said.

Existing mobile apps for JetBlue, for example, offer more than just the opportunity to book. Like other brand airline apps, it also offers a mobile boarding pass that integrates with Apple’s Passbook. It also tracks your flight, sends you of updates via push notifications and provides maps to guide you to your gate and city guides for destinations.

Car rentals are increasingly popular on mobile as well. Hertz offers a mobile app that brings the company $211 million in revenue in the past 12 months. Hertz says its mobile sales increased 223 percent year-over-year. Their mobile app adds value for the customer because it allows you to easily change your car model before you get to the rental office, saving you an extra trip to the counter. Herz spokespersons say that allowing customers to switch or upgrade from a mobile device directly resulted in an additional $1.5 million in revenue as a quarter of customers now ask for upgrades.

Mobile devices enable spontaneous last-minute planning

Since mobile devices go with the traveler and potentially keep him in constant contact, apps for in-destination booking could be very useful. One startup in this field is Desti, which is trip planning service that allows you to search with natural speech. With the app, you ask for suggestions in plain english and find attractions such as museums and restaurants, and book through the attractions website, but without having to leave the app. Desti also lets you book hotels.

“To be honest proof we stumbled on hotel bookings by mistake,” says Nadav Gur, CEO and founder of Desti. “We saw that it was important to us to integrate hotel availability and pricing to serve people who are researching. To get those we had to integrate booking relationships. Users ended up booking hotels much more than we expected, and our conversion numbers are higher than the industry norm.”

Desti is an example of a mobile-native service that lets travelers plan activities at the last minute according to their moods, the weather and their location.

Regional differences

China

China is a world leader in mobile booking adoption. China already has 354 million smartphone subscribers, more than any other country. Yet smartphones don’t yet account for a third of all mobile subscriptions. Last year, the proportion of Chinese using a mobile phone to access the internet rose to 75 percent, surpassing the 71 percent that use a desktop computer.

According to Charlie Li, founder of the Travel Distribution Summit in Guangzhou, 98 percent of Chinese who have booked a hotel or flight in the past year own smartphones. He also said that 42 percent use their smartphones to source travel information, compared with 14 percent of American travelers. Still, there is a lot of room for online and mobile booking to grow, as only 15 percent of China’s travel bookings occur online, according to the International Air Transport Association. As China aggressively builds out its 3G and 4G wireless infrastructure, this is expected to grow.

Mobile travel booking in China is dominated by Qunar (which is owned by Baidu, the Chinese search engine) and Ctrip. According to a September 2012 survey by China Internet Network Information Center, 42.3 percent of respondents said they use Qunar’s mobile travel app the most frequently. Ctrip was second with 31 percent.

The trend of using mobile for hotel booking more than air travel is prevalent in China as well. Ctrip says that in the second quarter of 2013, 20 percent of hotel bookings and 15 percent of air tickets were sold through mobile devices. Qunar, reports that 15 percent of digital hotel booking revenue and 5 percent of air online air bookings were from mobile. Qunar claims 17.6 million active Chinamobile users and 31.4 active web users for the 12 months ending with June 2013. One eighth of Qunar’s revenue comes from mobile.

The two behemoth online travel companies might see some upstart competition from group package tour booking site Tuinu, which secured $60 million in funding in September.

India

With 67 million smartphone users, India is the fifth biggest home to mobile consumers, and one of the fastest-growing. Indian smartphone subscriptions rose 52 percent in 2013. Yet only 6 percent of Indian mobile users have smartphones.

Indian travel providers can still accommodate the 94 percent of mobile users that do not have smartphones. For instance, India’s national railway allows travelers to book a ticket through SMS. The returned text message and an ID are sufficient to board. The biggest OTA in India, MakeMyTrip, offers SMS-based reservation for buses.

But given the fast adoption of smartphones in India, mobile internet and app-based bookings are expected to increase.

Cleartrip, an Indian travel booking portal, gets about a quarter of its search volume via mobile, and mobile bookings are about 7 percent of the total.

Europe and the United Kingdom

Europe lags behind America and China when it comes to mobile booking adoption.

The European Travel Commission says that 57 percent of Europeans use the internet to purchase travel, and 23 percent use travel agents. Mobile bookings account for 16 percent of the total. As is the case elsewhere, a greater proportion of younger people and business travelers are more likely to use mobile booking. One third of business travelers are mobile bookers as are 18 percent of those between the ages of 18 and 35.

Age is more of a factor in mobile for the United Kingdom. In Britain, 11 percent of online bookings are on mobile devices, but that figure shoots up to 29 percent for 16 to 24-year-olds.

Trivago, the European hotel booking website, found that 16 percent of Germans, 13 percent of French and 10 percent of Italians favored booking through a mobile device in 2012. More than a fifth of Americans prefer mobile booking. A more recent study by TradeDoubler Insight Unit in London said that in 2013, 19 percent of European travelers booked with a mobile device.

Several major companies and startups are offering mobile booking, especially same-day discounts on hotels. HotelTonight offers hotels in 34 European cities.

HotHotels in Spain and JustBook in Germany are both mobile-only apps similar to HotelTonight. In September, Groupon, the daily deals site, acquired Madrid-based Blink, which also offers last-minute hotel deals in 185 cities in the region.

Insights and strategies

Treat phone, tablet and desktop sites/apps as completely different channels. They aren’t just different screen sizes. Each device has different use cases and different demographics. Truly mobile booking on smartphone apps and mobile websites should be optimized for last-minute, on-the-go transactions. The layout and user interface must be stripped down as much as possible on mobile. Smartphone sites and apps should appeal to people that are already traveling and don’t have the patience for advertising and upsells.

Less is more. For travel, as well as any other mobile commerce, the most successful apps and websites are laser-focused. It is much better to service one or two use cases than many. Don’t deliver the world. Search results must be pared and curated based on what you know about the user. The app or website can assume the most likely scenario, and hide the probably superfluous options. Sometimes, focus means ignoring some aspects of your business. For instance, Hotwire can book flights, car rentals or hotels on its website, but the app only offers last-minute hotel bookings.

Remove steps in the process. Every action the user has to take to get to the transaction is a hurdle that could send them elsewhere. It is true that mobile booking often takes place within arm’s reach of a PC, and most mobile users complete the transaction by calling an agent or using another method, but a quick, seamless experience on the mobile screen is ideal. For example, some metasearch engines allow you to book a ticket or a room without leaving the metasearch site. Desti refers the user to a third party site, but keeps that embedded in the app itself to make sure that the user doesn’t stray. The most convenient apps for booking save your payment data to take one extra step out of the process the second time.

Make apps fun. Gamification is more than a buzzword. Games and challenges could make a booking app more engaging and promote customer loyalty.

Remember that the experience is more personal. Mobile devices give you plenty of context on your customers. Use it. The most important data that a smartphone app offers is location and context that can help pare down search results or suggestions.
“If I push you to book a hotel, and you already booked one, it’s a negative experience for you. If you are driving with kids in the car, and we suggest a casino,you wonder why I am spamming you with garbage,” says Nadav Gur of Desti.

Don’t assume mobile connectivity. Travel and mobility are almost synonymous, but mobile data doesn’t always follow you to your destination. In fact, when you disable mobile data, your phone is in “airplane mode.”

“Too many apps and mobile Web implementations assume guaranteed connectivity. This is a mistake. Both native apps and mobile Web implementations need to take full advantage of local device storage so they can remain useful even without a connection. As many travelers are about to discover if they go to Brazil for the upcoming soccer World Cup and Olympic Games, getting a wireless connection there is near impossible, and unless travelers have international calling and data plans, they will be rudely surprised,” writes Henry Harteveldt of Hudson Crossing.

Using saved data, an app can deliver better service by remembering favorites and payment information as well.

Information should persist across devices. Users expect to be able to access their booking information across devices. Someone that booked on a mobile device should be able to able to access his or itinerary and information on a mobile phone or tablet as well. Native apps’ ability to store such information on the device makes important and relevant information accessible even while underground or in the air. Native apps can also send timely suggestions, notifications or reminders.

Use the smartphone as a way to create new products and customers. The mobile web makes new products possible. For instance, Hertz allows customers to upgrade their vehicles without a hassle on mobile. Previously, such a service would have been impossible.

Apps are a strong tool to promote loyalty, if you give users a reason to use often. Mobile users already have plenty of apps that they seldom use. If you want customers to download and keep your app you have to offer loyalty points, better prices or more convenience such as remembering customers’ preferences. Single-purpose travel apps and aggregators such as metasearch engines and online travel agents are the most popular apps. Business travelers that use a loyalty program are more likely to use a hotel or airline’s branded app. A separate native app for mobile booking is rarely necessary for smaller companies, but optimizing for the mobile web through responsive design is crucial for all.

Further reading