Are hotel brands missing the boat with mobile deals?
With both hotels and online travel agencies consistently reporting that at least half of mobile bookings are being made for same-day reservations, it is clear that the hotel and accommodation industry is quickly adapting to mobile. To take advantage of impulse buying, online travel agencies have been active in mobile deals, so why are hotel brands hesitant to dip into offers?
Although both online travel agencies and hotel brands have the same goal with their mobile initiatives – to book as many rooms as possible – the two industries have taken different pricing strategies to get there. However, the busy, on-the-go traveler is just looking for a last-minute place to stay, which might make the pricing irrelevant.
“I think that both hotel brands and online travel agencies are pursuing mobile aggressively,” said Chris Brya, director of mobile and emerging channels at Choice Hotels, Silver Spring, MD.
“The travel customer’s adoption of mobile as a tangible commerce platform along with their increased expectations has made investments in mobile a necessity,” he said.
“However, hotel brands have some unique and distinct opportunities in mobile to care for customers at the property level that an online travel agency would not have, but everyone will be aggressive in the mobile space.”
Many hotel companies are challenged with creating mobile efforts that let users book hotels quickly while also keeping the hotel’s brand image top of mind.
Although price is certainly a key criteria for consumers when looking for hotels, user reviews, photos and amenities are equally important features that users are looking for.
Compared to online travel agencies that work with multiple hotels to aggregate content, hotel brands have to find ways to entice consumers to book from them directly.
Therefore, loyalty plays a large role for hotel companies with letting members manage and redeem rewards from their programs via their handsets.
For example, Choice Hotels has centered its pricing around a fixed model that sets the same price on every channel. This helps the company establish transparency on its prices to users.
“Everyone is looking at how mobile can play a part in last-minute deals,” Mr. Byra said.
“The challenge is not in developing a particular mobile solution that serves as a distribution extension, but one that also provides value for the customer and in our case, our franchisees,” he said.
Wheel and deal
When it comes to pricing, it seems as if every online travel agency is positioning itself with mobile-specific deals.
For example, Travelocity rolled out its iPad app with deals that are not available on desktops (see story).
Similarly, Orbitz revamped its mobile site to include deals after seeing approximately 65 percent of mobile bookings being made for same-day reservations (see story).
While the idea to offer users discounted rates for shopping on their devices does give consumers an incentive, it is also important to think about the use case for mobile bookings.
Given that consumers are using their devices to book last-minute stays, location is most likely a feature that many users are interested in and should be more of a focus for online travel agencies.
Additionally, since mobile bookings tend to be spur-of-the-moment buys, companies should specifically be looking at how to target smartphone users, who always have their device in-hand versus a tablet user who is browsing on their couch.
According to some mobile experts, the difference in how travel brands and agencies approach mobile has to do with how new and hot the medium is.
“There are differences in the way travel brands approach mobile mainly because there are no best practices just yet,” said Christelle Chan, London-based marketing director at Hotels.com.
“We are all in a test-and-learn mode given mobile is still very new – most of us are seeing the same trends such as a very high same-day booking proportion, but brands have a very different approach to how we maximize this potential,” she said.
Additionally, it is still unclear to many online travel agencies how much mobile should play a role in overall marketing budgets. While mobile does present opportunities to on-the-go travelers, it can also be expensive, and might not have the same ROI as other channels such as online or out-of-home marketing.
According to Keith Swiderski, director of online customer experience at Wyndham Worldwide, Parsippany, NJ, the main focus of hotel brands with mobile is to make the booking process as seamless as possible.
As part of that digital strategy, deals do play a role. With consumers often searching across multiple hotels to find a last-minute stay, price is still important in hotel marketing.
The Wyndam Hotel Group owns a variety of hotels that includes every segment of the industry.
However, the economy and midscale section is where the company claims to be strongest with brands such as Days Inn and Super 8. Traditionally, these hotels line major highways, making mobile a natural sweet spot to target last-minute mobile bookings.
Getting consumers through the purchasing funnel to turn browsing into a conversion will continue to be a challenge for hotel brands, per the exec. Additionally, mobile needs to be looked at as part of a brand’s multichannel approach to driving bookings.
“I think that attribution will be a challenge with mobile,” Mr. Swiderski said.
“Since many customers now use mobile as a shopping and browsing tool, we as marketers need to identify the value of mobile as an early-funnel channel that contributes to conversion as opposed to a conversion tool in itself,” he said.
Lauren Johnson is editorial assistant on Mobile Commerce Daily, New York