News for the Hospitality Executive
1, 2012 - Back in 2005 the
InterContinental Hotels Group (IHG - www.ichotelsgroup.com) was
one of the first hotels to take a booking via a mobile phone. It was
was about innovation but back
then it was not exactly a priority.
How things have changed. By 2009 revenues from mobile were $3 million. Today those – and this includes tablets - stand at an impressive $148 million. It is growth that cannot be ignored and today IHG is 100 per cent focused on its strategy for mobile. The challenge now is how to turn this into a billion-dollar business. Bill Keen, Director of Mobile Solutions at IHG Group talks to Pamela Whitby how a mature travel business is managing the process.
EFT: Mobile is a disruptive technology that is absolutely transforming the travel business. How are you managing this?
BK: Of course, mobile is something we are extremely focused on because when it comes to travel mobile devices are a perfect fit. At the moment a lot of companies are trying to figure out whether mobile is a separate division or an extension of the digital/web team. We are definitely moving in the direction of setting it up as a new line of business because today the materiality of what we are doing is getting more attention. Back in 2009 when revenues from mobile were $3 million it was interesting, now it’s getting challenging.
EFT: What are those challenges and what do they mean for your business?
BK: Mobile devices are always on the hip, always on and accessible. What that means for us is that we now have to connect all steps of the guest’s journey. But that is not always easy. As we all know this is a very mature industry. Travel models have been around for years and the systems we have to tap into, to create an integrated experience on a mobile phone, are sometimes legacy systems from 1960s and 70s. We need to build out middleware layers to enable an end-to-end guest journey. To achieve this we need to staff appropriately. Our executives have been very supportive in providing funding to focus on three core areas. The first is to expand our booking solutions. Secondly we need to mobilise our marketing team and finally we need to connect the guest journey as they stay at our properties. So mobile needs to be a booking tool, a marketing touch point and, just as importantly, a service tool.
EFT: What is your main focus at the moment?
BK: Right now we are trying to work out how mobile fits into the guest journey and this is not just about booking. It’s from when they first express interest and start to search, to the time they book and then arrive at the hotel. We are mapping all that out and then starting to stitch together these experiences to see what we can offer along that journey.
EFT: How do you ensure your systems support that process?
BK: Well we’re looking at our architecture. Travel company models have evolved over time. The original approaches to scale were designed around call centres and travel agents but then the Web came along bringing with it direct consumer interaction plus connecting third party intermediaries like Expedia and hotels.com. We recognise that mobile is different and will tax the system; it’s much more of an engagement type tool. This means we need to look closely at our back-end architecture to ensure it can do the things that we want it to do to.
You don’t want to fragment the guest experience – it has got to be integrated.
EFT: Would you say then that one of the issues facing the travel business is that different parts of the organisation operate in silos and are not integrating technology across the business?
BK: Well, it can be difficult at times. It isn’t as if they are in silos, it’s more about perspective based on their current role in the organisation. If you ask people what mobile means to them, depending on where they’re sitting you’ll get a different answer. Some will say it is about booking, some will say it’s about apps, some will say it’s about using mobile to market to people, others about enabling you to check in or order room service. I’d say it is all of those. It is simply not just about booking and revenue, it is about service as well. And that’s the key; we need to connect all of those components
EFT: How difficult is that?
BK: It just takes time. It is no different to when the Web became commercially viable. Some thought it was a fad, others embraced it. Mobile is a disruptive technology and that makes it even harder for mature industries. That’s our biggest obstacle. We have legacy systems that we need to deal with first. Other brick-and-mortar businesses like the retailers have done a good job in this respect. Ecommerce was stealing their business but now mobile devices are driving people back into stores because you can do comparison shopping. You don’t have to go home and check Amazon, now you can comparison shop from your phone in a store.
EFT: Talking of using your phone to comparison shop in different locations; how is location-based marketing evolving?
BK:This is the holy-grail of mobile. The two most important things that I tell digital marketers is this: what’s different about mobile is the importance of context and location. Say I’m a digital marketer and I do display or search – the thing about this, is the device knows where it is and it will tell you. So you’ve got to be mindful of location. Over 60 per cent of our bookings are made within a day of the stay. That means that the guest is standing pretty close to the property they want to book. Next is context which we need to understand to be able to market properly. It is really important not to confuse guests with offerings that aren’t relevant At the moment we are focused on two types of personas. First is the distressed traveller who is typically business-oriented. The user case we focus on is that something has happened to their travel plans and that they are using the device to orientate themselves and to find a safe haven at one our properties. Marketers need to be mindful of what they push to a distressed traveller. The other persona is the carefree traveller who is probably younger and happy to figure it all out when they get there. They are more likely to be on a tablet.
EFT: Do you make a clear distinction between mobile phone users and tablet users?
BK: We do. Now when we report metrics we include both in the total but I should say that we view the two fundamentally differently. If they are booking on a mobile device, as opposed to a tablet, the customer is more likely to be task oriented and probably not planning a vacation. Tablets we refer to as a ‘lean-back’ device as you are more likely to be relaxed and at home. In fact, over 70 per cent of tablet traffic is coming from a wifi network so this implies they are more likely to be at home or in a public space like a coffee shop, just relaxing. The mobile phone is tailored for business travel whereas the tablet is more about leisure travel so when designing our applications we are very much focused on this.
EFT: Tell me about some of the new location-based developments on the horizon.
BK: We use location as part of search process and give guests the option to display the hotels that are closest to them. Also, we have developed in hotel offers that are specific services inside the location. These are simple delighters that are redeemable using the phone like a complimentary drink in the bar, for example. Those are things we’re already doing and are offered within the reservation flow and as part of their current reservation summary.
EFT: How do you decide where to focus your attention when new developments are happening so quickly?
BK: We are obsessive data and information consumers. We follow consumer trends closely and we look at what consumers are doing with a mobile device and which devices are selling. We stay abreast of moves and then try to time when it will reach broader adoption. For example, we do believe that NFC, or near-field communications, will be key to future m-commerce. However this is not something that is currently in the consumer’s pocket so why would I want to invest in a lot of development next month? We are watching it but we try to invest at the right time. Another example is our Windows Phone app? We watched developments and we decided to go ahead and build a booking app when we knew that Nokia would start shipping all phones with Windows. We see that as what we call a potential ‘hockey-stick moment’. I’d say our strategy is to be leading edge rather than bleeding edge. We don’t want to throw money away but we want to be ready for take-off. Of course we spend a lot of time following advancements in telephony too. We will look at industry research and we’re avid follows of information providers like Techcrunch and Gizmodo, for example. And I follow adjacent industries to see what they are doing. You simply can’t just look at what everybody is doing in hospitality. You need to keep up with consumer trends, technology improvements, the telephony industry and others that are making interesting and advanced moves into mobile.
EFT: What will the travel landscape look in five to ten years time?
BK: I believe that the phone, desktop and TV will be interoperable. Everything is going to be interoperable. You’re not going to have any deficiencies in any touch point that you use. People will browse over TV and switch to their phone to do what they want and then use that phone as they travel. As they travel the phone will allow them to perform all the basic functions you expect of a hotel. Why would they need to get a key when they travel, their phone will do it. They’ll have more utility to order food, open the door and check in or out. That’s where I think it is going – the phone will soon perform all relevant steps of the guest journey.
Bill Keen Director of Mobile Solutions at IHG Group Eye for Travel’s Mobile Strategies for Travel 2012 conference (http://events.eyefortravel.com/mobile/) in San Francisco, March 5-6, 2012.
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