World Travel Market CEO debate: Does mobile stack up?

WTM invited industry bosses to assess the reach of mobile devices at a Pre-world travel market debate. Martin Cowen reports for Travolution, the show’s global travel technology media partner.

WTM invited industry bosses to assess the reach of mobile devices at a Pre-world travel market debate. Martin Cowen reports for Travolution, the show’s global travel technology media partner

If all the mobile phones and devices currently in use around the world were piled up on top of each other, the tower would reach to the sun and back.

If you think that statistic is made up, it is. But the growth of mobile, and the related explosion in the use of colourful statistics to illustrate that growth, is unabated.

Almost every presentation at every industry event will include a new statistic (often unattributed) illustrating the march of mobile.

At OpenJaw’s recent t-Retailing Summit in Dublin one speaker said that “four in five smartphone users have used their device to purchase”. No context, no source.

At the same event, a different speaker referred to a statistic she had heard at another event which said that more people had access to a mobile phone than had access to fresh water and electricity. This seems more likely, in which case mankind has some serious prioritisation issues.

With all the noise, it is tricky sometimes to work out what is really going on. World Travel Market, which takes place each year in London but which prides itself on being a truly global B2B event, organised a dinner for a dozen or so senior industry execs to talk about the future of mobile.

But before talking about the future, it is important to consider the present. One important note at this point is the distinction being made between devices – mobile now comprises standard phones, smartphones and tablets. Some very clear distinctions and connections are emerging which have only just blipped the radar.

Dan Robb, head of travel at Google, explained how the mighty search engine is approaching mobile. In 2010, Google’s chief executive, Eric Schmidt, told the Mobile World Congress in Barcelona that Google would become a “mobile first” business. Robb said that this was “more of an aspiration than an edict. In some markets, such as India, it’s always mobile first. Otherwise, for every product we launch the mobile version will be released in tandem with the desktop”.

The WTM event was moderated by Steve Endacott, chief executive of On Holiday Group. He adopted a sceptical stance, questioning many of the assumptions about the inevitable dominance of mobile. He warned that, in terms of self-promotion and vested interests, the arguments around mobile are similar to social media.

“We all know it’s an opportunity,” Endacott said, “but so far nobody has found a way to commercially use it to sell holidays, irrespective of the marketing hype it receives.”

Endacott is correct to a degree – buying holidays using a smartphone is some way off, although it is worth noting that similar arguments existed about high-value purchases online. E-commerce in the travel sector essentially began with low-cost carriers – a simple and low-value transaction – but soon four-figure sums were being spent online.

There are a number of reasons why buying the family holiday on your phone is slow to take off. But there are travel products that are ideally suited for mobile. Mark Maddock, managing director of lastminute.com, said: “Mobile is facilitating last-minute behaviour, enabling people to be more spontaneous in their booking behaviour and taking advantage of the best late deals. We’ve experienced much shorter booking windows across all of our products through our mobile channel, with more than 50% of our hotel bookings being for the same night.”

Most of the other big OTAs are finding a similar trend. The same move to late booking has also been seen by the big accommodation supplier InterContinental Hotel Group.

Maddock noted the commercial opportunities this created for lastminute.com. “When the booking window is so short, we try not to confuse the customer with too many suggestions. So there is great value for our hotel partners in being one of the three hotels which appear on the first screen.”

The battle for late bookings is not only being fought between the global OTAs, the global bed banks and the global chains, there are new entrants in this space such as mobile app Hotel Tonight, and they are starting to gain traction with consumers as well the press.

Hotel Tonight was highlighted by Hugo Burge, chief executive of Momondo Group (formerly Cheapflights) as an example of the opportunities for new business models to enter the market as a result of mobile. “That business has bypassed all legacy and gone directly to the consumer on these new platforms. It has already caught up with the bigger businesses by being able to offer a comparable offer from scratch.”

Devices can also help generate new products, Burge said. One of the most popular devices in the market is the Kindle. As an e-reader, it might get left out of the travel discussions, but Amazon’s current TV advertising campaign for the device has “take your Kindle on holiday” as the call to action.

Burge suggested that a new type of guidebook might now be possible, designed specifically for Kindle. An updated guide, personalised for one’s own interests, could be written and downloaded on to the Kindle and used offline. It would offer a more personalised and targeted experience than the many travel apps on the market.

Momondo Group is also seeing massive growth in mobile. “Across markets and brands we’re seeing 75%-100% growth year-on-year in the amount of business we’re getting from mobile,” Burge said. Currently, about 30% of traffic is from “mobile” devices.

Vertical search businesses are clearly seeing a big lift from mobile. Another attendee, Andy Cocker from Skyscanner, said: “This year we will get more traffic from mobile than desktop.” This trend has undoubtedly been by lifted by traffic from the Skyscanner app, one of the travel industry’s most downloaded with over 20 million devices carrying the tool.

Burge is probably the freshest-faced “industry veteran” you are likely to meet. His experience with Cheapflights, stretching back to 2000, gives him a detailed historical overview, enlivened by some contemporary culture references. “One of my favourite quotes is from William Gibson [the Canadian novelist], who said ‘the future is already here, it’s just not evenly distributed’.

When Cheapflights launched its mobile product we found that very few airlines had a mobile-optimised site that we could connect to, so it simply didn’t work for us, our advertising partners or the customer.

“But it’s certainly changed. Over the past year or so, advertisers such as KLM, Air France, Expedia, ebookers and Opodo have all optimised their sites for mobile so the connection is smoother.”

He admitted there is an overhead, adding: “Extra resources need to be allocated to separate out the mobile from the desktop, but the net result is a better commercial relationship between us and our advertisers because the customer is better served.”

If Burge is allowed to use cultural references to make a point about mobile, the same privilege should be afforded to Jon Pickles, product director for travel software provider Comtec. His contribution to the debate was to serve as the voice of reason, offering reflections and observations from a Comtec perspective as well as a self-confessed gadget geek.

“When the queues for the Orange charging station at Glastonbury are longer than the queues for the loo, you know times have changed,” he said.

This observation, based on regular attendance at the annual music festival, came after a discussion about how some hardware and infrastructure issues around mobile were holding back adoption. “We talk about all the great things that mobile and devices can do, but forget that if you cannot get a strong signal, or the battery dies, then it’s all a bit pointless.”

Wireless charging was one way that the battery life issue could be addressed. “The technology is there, and I’m sure it will come. In the meantime, I will make sure I charge up a few spare batteries and take them with me to Glastonbury this year.”

Apps can drain batteries, so Pickles is quite exacting about what sort of app he puts on to his many devices, making a neat distinction between “transitory” and “permanent” apps. “Apps such as Facebook or Hailo [taxis] which I use all the time I will keep on the phone so they are permanent. I flew easyJet to Berlin for ITB so I downloaded the easyJet app specifically for that trip,” he said, “and I deleted it after I’d used it, but I will re-download it next time I fly easyJet, so it’s transitory. Would I really want to take up some of the limited space on my phone with a meta-search app that I use every now an again?”

Another headwind facing mobile is the cost to the consumer of using the phone abroad. John Finlayson, brand and partnership manager at mobile marketing firm Weve, noted that roaming charges were not only coming down but also now a de facto part of a contract. Other guests noted that tech-savvy holidaymakers take advantage of free Wi-Fi in the hotel or around the resort to get online.

A point Pickles made which chimed with Endacott’s scepticism, was the danger that mobile could be a distraction. “Comtec launched its visual inspirational search tool at the Travel Technology Europe show because we were at the early stage in the development and wanted a partner to help progress the project.”

He admitted that this hadn’t happened, but Comtec “isn’t overly concerned because the main focus is stabilising and optimising the products we have while ensuring we service our existing customers”.

“Inspirational search” is a familiar term to followers of travel-tech buzzwords. It highlight the push-and-pull dynamics of many debates surrounding mobile. Diane Bouzebiba, Amadeus’s managing director for the UK and Ireland, pointed out that “many leisure customers have shifted away from searching for flights and specific dates and want to be inspired”.

The issue here is that while the evidence mounts that mobile searches are going to overtake desktop, inspirational search is still some way off. Burge pointed out that “many travel companies are still working out how to make the nuts and bolts of search work, in terms of content and conversion”.

With mobile touching so many parts of the business, how will it impact corporate structures? Burge thinks that “the entire organisation needs to know about mobile.” This is a familiar refrain to those who were reporting on the internet 10 years ago.

How long, exactly, did it take Thomas Cook to put their e-commerce boss on to the UK board, never mind at a plc level? It might be disingenuous to suggest that if the web guy/girl had the ear of the board in 2005, Thomas Cook’s online presence might be stronger now.

A business mantra across all sectors is “follow the money”. Burge, as well as being chief executive of Momondo, also co-founded Howzat Media, an internet investment fund.

“The investment community looks at mobile in two different ways,” he explained. “There are the brand-new businesses which are using mobile as their main channel, and there is what I call “legacy internet companies” – businesses with an established online presence which are in a position to exploit mobile opportunities for growth.”

There are no rules about which type of business the investment community prefers. “Some funders like a founder who has a track record, while others will only invest at the second stage, once the business has been set up and there is some evidence of viability. Mobile is a relatively new territory, and there are no experts yet.”

During the three hours of debate so many points were raised it is difficult to summarise the sentiment without over-simplifying. Robb made a simple observation which shows that while there is a role for blue-sky thinking when working on mobile strategy, travel firms should never lose sight of the fact that “a phone is a phone”.

“If you put a click to call function into your app or mobile-optimised website, businesses can drive traffic to the call centre where conversion rates and upsell opportunities tend to be better,” he said. “We’re seeing that the propensity for customers to use their phone to make calls is growing.”

When Google, with all its products and widgets and beta-testing, suggests that one of the best uses of mobile phones is to make calls, then maybe a rethink is in order.

That growth in mobile web could lead to a revival of the call centre is one of the incongruities of the debate.