Analysis: Is 2010 the year for mobile?

At Travel Technology Europe, Travolution asked whether mobile is finally set to take off. The answer is that it’s already here. Linda Fox reports


There is so much noise out there at the moment about mobile but in the same way that the rise of internet washed over much of the travel industry, will mobile?


It is unlikely there will be a defining moment for us to look back on and say that was the year for mobile and travel. Some said it would be 2009, but in truth it is already happening and will continue.


So, now is the ideal time for companies to be looking at the potential for mobile in the travel sector.


There are hotel and airline companies already experiencing significant booking volumes through mobile devices. Hilton Hotels Corporation revealed figures at World Travel Market showing a $44 return for every $1 invested in mobile last year.


Those numbers are compelling – as are recent figures released by Gartner predicting consumer spend in mobile application stores of $6.2 billion this year.


While 82% of downloads are likely to be of free applications, last year revenue for downloads from mobile application stores was more than $4.3 billion and is expected to have increased to $29.5 billion by the end of 2013.


The most popular downloads are games, mobile shopping and social networking but all signs point to travel and mobile becoming a massive market place.


Microsoft head of emerging technologies Paul Lyonette says: “Travel should be huge for mobile because of what you are doing and it always travels with you.


“Travel is already one of the leading areas, after adult content, and the most searched for topics generally are train times, bus times etc – those areas that are linear and traditionally easy to read.”





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Already many of the barriers that existed to the development of mobile even two years ago – handset capability, the cost of mobile internet and good content – have been removed, providing many more opportunities for the medium and travel.


Within the leisure sector applications such as Yelp’s augmented reality service, lastminute.com’s topsee and nru, and neartohere, use location and geocoding to provide travellers with useful, relevant information on the move.


Meanwhile, airlines and hotel companies are providing information and reservation services, and other companies are using mobile to push deals and ancillaries or round off their customer service.


Within the corporate sector innovations are centred on providing users with a central point for their trip information, with services such as Worldmate, Tripit and TripCase, as well as improving productivity on the road by enabling travellers to manage pre and post-trip elements, such as expenses, on mobile devices.


Mobile Travel Technologies founder and executive director, Gerry Samuels, says: “With mobile we have moved out of the naive stage of getting something up there, towards more fi ne tuning. “We have got critical mass now and we’re seeing what works on mobile. The areas that are relevant for travel are
revenue creation in terms of bookings, and revenue saving in terms of customer service.”


 


What works best?


There is a place for all of the above services, and for travel companies it’s a question of figuring out what works best for their customers as well as identifying the potential for targeting new segments.


Yahoo! Europe senior director of business development, Ken Hart, sees mobile as a great way to augment the travel experience.


He says: “There is a lot to be done in terms of plugging the gaps in customer service, it’s a great on-the-ground complement to all the research you have already done.


“Mobile is also much more sociable in nature. If I was a large tour operator I  would be thinking in terms of providing services to my customers as soon as they hit the ground in a destination – enable them to take photos, post the photos to a site and share them while they are experiencing it. There is a tremendous opportunity to really improve service.”


Mobile advertising also represents an opportunity for the travel sector, especially in an increasingly crowded online space. Mobile devices are so much more personal, enabling advertisers to be more accurate in targeting potential customers.


Estimates from FirstPartner show UK mobile advertising will be worth £61 million this year – an increase of 38% on 2009.


The marketing specialist also sees paid search on mobile search engines to be the largest area for advertising. Lyonette says he also sees potential for advertising within applications.


Even among consumers who are heavy online purchasers, 76% would not purchase via a mobile device. While there are already volumes of transactions taking place in terms of game downloads, ring tones and iTunes, they are all around a certain low price point and tend to be a certain age demographic.


“The barrier is the price point of the product. You are less concerned about a £5 commitment than a £500 commitment, even though you are giving the same details,” says Lyonette.


However, there is also the argument that, as with the internet, consumers will stick to the brands they trust and have done business with in the past to avoid security issues.


In addition, as the idea of contactless payment becomes more acceptable, consumers are likely to get over concerns about payment security and fraud.


Bandwidth is a further issue, although Lyonette says operators are already responding to pressure to increase the supply of information to devices.


 


Size matters


Crucially for travel, screen size is also a barrier. So researching and booking anything more than flight and checking hotel availability, pricing and location information is unlikely until devices can deliver a richer experience.


Apple’s iPhone and iTouch have already gone a long way to showing what the future holds, and in changing the way we use mobile devices by exposing more consumers to rich content such as video.


“With more advances, bigger screen handsets will be more engaging. You can mirror that sort of ‘destination of the month’ content on mobile,” says Lyonette.


Developments are coming thick and fast, but for the time being travel companies need to focus on what, if any, services to provide. The decision hinges on whether to offer services as a downloadable application across a number of platforms or via the mobile web, and the all important return on investment,
especially in the current climate.


“There is some creativity out there and that’s fine, but what people want is for it to work really fast. You can’t diminish the importance of good technology that works quickly and reliably,” says Samuels.


He adds that providers of mobile services will also have to think of a range of payment options, including non-credit card transactions to cater for different destinations and cultures.


“As a technology provider we have to be a little more creative and we work  with local payment options.


“The technology needs to be more flexible and markets such as Russia and India have more options for payment,” says Samuels.


Advice from other experts is for travel companies to wait a little while longer before throwing themselves into developing costly applications and mobile web services.


“Remember, all you are trying to do is sell a holiday to a customer. Mobile is just a tactical thing, so wait for the mobile ‘big bang’ to settle a while.


“Quite a lot can be done for not very much outlay. Right now if you want sales, mobile is not the channel,” says Richard Dennys, of Bristol-based consultancy Digital Divinity, who urged a cautious approach.


One final consideration for travel companies is who to target. Metrics on the audience for mobile vary. Much research centres on the teenage youth market in terms of takeup of new devices as well as those most likely to interact.


Other studies show 25 to 34-year-olds represent the largest audience. Either way, experts argue that travel companies need to be finding ways to create awareness of their brands and engage these groups.


Yahoo’s Hart says: “If there are already hundreds of thousands of applications out there, travel companies should be thinking this is going to be the world’s
most powerful medium in a few years’ time.


“But you have to think about the clutter and what will be meaningful. Getting your message out there will be difficult in a few seconds.”

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