City Insider: 10 home truths about travel apps

City Insider - A City perspective on the travel industry from FT journalist David Stevenson

The hype about apps isn’t wrong – but the approach most travel businesses are taking to them is. Time for a dose of realism

This week I’m going to focus on a silly word that I am sure is vexing the very best brains in travel’s marketing and IT departments: app.

First the good news. Apps really are the next big thing, they’re hugely important to any transactional business, and a good one needn’t cost millions of pounds to develop.

Now the bad news. I can confidently predict that hundreds of people in the travel sector are working on completely useless ones. Many of my friends run app development companies and some of their ‘best’ clients sit in the travel sector.

Over in agency la-la-land, ‘best’ means a client who doesn’t really know what they want. That gives the crafty account manager the chance to wedge in some lucrative development work based around choice phrases such as ‘market leading app’ or ‘revolutionising online travel’.

Back in the real world inhabited by finance directors and mean-spirited types like myself, there are some home truths worth confronting:

1. Unless it’s about killing zombies, duck-billed platypuses or sex, no-one pays for any app. If an app is fabulously useful – like the Train Times app for iPhones – you might just strong-arm some people into ponying up a few quid, but that’s as good as it gets for information-based services

2. Unless you’re a supermarket, no-one really uses apps for transactions. I’d be deeply suspicious of the app usage stats quoted by the big grocers

3. Forget augmented reality and extra layers of information. Most app users I know can’t be bothered to wait around for the data layers to load

4. With a few honourable exceptions, most of the travel apps developed so far have been lamentable or examples of massive overkill. As an example look at the ludicrous Hotels.com app. They’re usually too complicated and bash the poor user over the head with too much content and too many choices.

5. Real time alert services that channel breaking stories or offers to clients can work, but only sparingly and as long as the information is useful or actionable

6. Greed is good. The one area that is showing promise centres on special offers, vouchers and limited offer sales. Techie types quite like the idea of hearing about special offers before anyone else does

7. Don’t try and mix content with transactions. The whole point of apps is that I can have lots of different apps doing different stuff.

8. A good app should augment your existing websites and mobile platforms

9. The average attention span for a client using an app on their phone is about 60 seconds at most.

10. Forget about importing video into your app. It takes too long to load and users won’t bother hanging around

My parting thought is this – users are not about to book a family holiday for four costing £3,000 using an app. They’ll use apps to cross reference and check information, and especially if it involves TripAdvisor. But holidaymakers will use a tour operator-based app if its gets them something special that no-one else has had access to.

They’ll then use the click through mechanism to find out more, and that stickiness, powered by greed on the part of the user, will give the travel companies phenomenal data on the preferences of consumers and their travel habits.

Get the app right and you could increasingly capture real-time changes in the sentiment of users without the need of intermediaries such as travel agents. Now that would be a huge revolution in the business structure of the industry, and I suspect it is only a few years away.

Even if I do say so myself…

Over the last few weeks I’ve been sorely tempted to write one of those “I Told You So” pieces where we columnists point to recent developments as proof that we are divinely anointed to speak the truth.

Specifically, I was tempted to point to fund management group Blackrock raising its holding in Thomas Cook above 5% as proof that the wolves are circling. This large institutional fund manager is hugely respectable and I’m sure it is hardly about to spring a bid, but it is also quite an opportunist. I sense that they now believe Thomas Cook is a target.

I was also tempted to point to the languishing share prices of both Tui Travel and the infinitely smaller Travelzest. Tui must be wondering what it needs to do next to get its share price back up to levels seen before the recent financial reporting debacle.

Over at Travelzest, shares have continued heading south as outside investors take a rather dim view of the ‘share incentivisation’ scheme and the parallel legal disputes – the price was down to just over 19p the last time I looked. If I were a betting man I’d suggest that only one of these three companies will still be independent by this time next year.

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