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Location aware experiences seen as a “game-changing”
phenomenon in the travel sector

By Ritesh Gupta
June 2011
IN-DEPTH: Beth Murphy, VP Global Product, Travelocity believes a mobile strategy should reflect one’s ability to serve unmet consumer needs in a differentiated way. Also, mobile opens the doors to creating entirely new services and experiences for consumers based on their location, which has exciting implications for in-trip experiences.

Mobile revenue models differ widely, from advertising-based, to app sales, to in-app purchases to generating leads.

These models are not one-size fits all -- every business should examine the trade-offs and choose the model that works best for them.

Keeping the customer in mind, companies should focus on the needs of their highest value customer segments. For some, this will be business travellers, for others it will be leisure or somewhere in between.

Business travellers tend to know more where and when they are travelling and spend less time in the research phase. Mobile products for this segment focus more on quick execution of tasks, travel policy support and itinerary management. On the leisure side, there is an element of research and discovery that still needs to be supported – and even folks that focus on transactions will still need to make sure they provide enough entries into their mobile site and/or app for consumers researching within the wider mobile web.

“Ultimately your mobile strategy should reflect your ability to serve unmet consumer needs in a differentiated way,” says Beth Murphy, VP Global Product, Travelocity.

“This is particularly true in the mobile space, where users want the ability to do anything on a mobile or tablet device, that they would normally be able to do on a desktop,” said Beth, who is scheduled to speak at the forthcoming Travel Distribution Summit North America 2011 , to be held in Las Vegas (19-20 September) this year.

According to Beth, mobile also opens the doors to creating entirely new services and experiences for consumers based on their location, which has exciting implications for in-trip experiences.

For any travel company, including OTAs, the value it can provide to a customer has always been intrinsically tied to how relevant it can make its offer, its search results, its communication, etc. GPS capabilities provide both suppliers and intermediaries more ways to improve their relevancy as well as open up new opportunities for communication within the travel lifecycle. Now with the advent of trustworthy, nearly always accessible location-based services, travellers can do a lot more of their travel planning and decision-making on the fly, often when they are in market as opposed to prior to the trip. For the travel sector, the aim is to provide customers great products that aid this new traveller behaviour.

The industry also currently faces several challenges when it comes increasing the utility of mobile apps. These include the fragmentation of the travel inventory and booking partners and immaturity of non-GDS interfaces for booking partners. There’s also competing and overlapping mobile strategies by travel industry participants.

A section of the industry believes the OTAs have recently launched apps - previously just had mobile websites - and have a long way to go to hone their offerings for smartphone and tablet usage.

Beth spoke to EyeforTravel’s Ritesh Gupta about mobile-related initiatives: budgeting, balancing push and pull strategy, ancillary services sales and lot more. Excerpts:

What do you think should be the focus when it comes to creating mobile websites/ mobile apps, and how should one overall go about budgeting and planning for mobile website enhancements and mobile marketing initiatives this year?

Beth Murphy:

There are still huge unmet consumer needs across the trip lifecycle, so there’s many ways to create compelling consumer experiences on mobile devices.

The consumer research we’ve conducted suggests that many consumers are still dissatisfied with even close-in shopping and booking experiences, so there’s lots of opportunity. Focus on delivering ownable, compelling experiences (discover, shop, book, play) and your brand will be perceived more favourably.

To what extent should one go about creating a balanced push and pull strategy when it comes to making the most of mobile phones as a transaction channel? How can one ensure that consumers are inspired to buy via mobile phones?

Beth Murphy:

Always start with a `mobile first’ perspective around how consumers are using the device. There’s a much higher bar for relevancy and intuitive design on a handheld device, and tablet users are often using their device for passive entertainment, so delivering rich graphics and video is important.

From a marketing perspective, tablet devices also allow for much more innovative ways for advertisers to reach consumers, beyond traditional IAB ad units. We’ll start to see rich interactive ad units on tablet devices, along with location-aware targeting.

A section of the industry expects the mobile channel to emerge as a significant platform for ancillary services sales as it offers the ability to push context-sensitive offers. How do you assess this sentiment at this stage?

Beth Murphy:

There’s lots of consumer interest at this stage, the challenge for brands will be the 'how' - the best way to deliver highly relevant experiences to users based on where they are and what they are doing. Savvy smartphone users are embracing emerging behaviours at a rapid pace, across photos, check-ins, gaming and tagging . There’s a Venture Capital bubble around certain spaces and companies, but the underlying potential of location aware experiences will be game changing over the next 5-10 years. Brands that deliver great geo-location experiences will quickly differentiate themselves.

Companies like Google (along with Citi, MasterCard, First Data and Sprint) in the US and Orange and Barclaycard in the UK have come up with initiatives pertaining to mobile phone payments services. Is NFC-enabled mobile payment a mere hype in the travel industry at this juncture?

Beth Murphy:

Leading players believe the traditional credit cards will be replaced by the mobile phone over the next decade. The question is which brands are best positioned to win consumer and business share as behaviour shifts. It will be interesting to watch, my personal bet is that innovative start-ups like Square and Zong will be acquired by larger consumer payment brands. As far as how this impacts the travel industry in the short-term, smaller ticket items are more likely to be at the forefront of this trend vs. more traditional travel purchases.

Scale in the world of technology still matters. A small or medium sized hotel might want to think carefully about spending money developing and maintaining multiple versions of its own apps in multiple languages versus simply working with an OTA that has cutting edge technology to book its customers. How do you think OTAs are in a position to make use of this opportunity at this stage?

Beth Murphy:

Absolutely, for smaller to mid-sized hoteliers creating stand alone apps and websites isn’t economically efficient at this phase of the market. There are lots of great ways hoteliers can use mobile search and display budgets to acquire customers. Consumers are gravitating towards bigger well known brands on mobile devices, unlike the desktop where search is king. This creates a great opportunity for the larger OTAs.

Google’s team in the US told us that when it comes to budgets spent on mobile marketing, travel advertisers are lagging consumers greatly. Google’s mobile traffic is growing at about 20 percent QoQ with travel queries coming from mobile devices making up more than 15 percent of all queries. Yet most travel advertisers are allocating less than five percent of their search budgets to mobile search; so there is certainly room for growth. How do you assess the situation?

Beth Murphy:

Mobile search is definitely being underutilised by advertisers, so there’s an attractive opportunity to drive qualified traffic. Advertisers should be creating compelling end-to-end experiences optimised for the mobile however, which require investment in optimised landing pages and intuitive mobile flows. Right now you’ll see many instances of mobile search ultimately driving to desktop pages, only resulting in a lackluster user experience that won’t drive engagement.

A recent study indicated that while actual monetisation is taking off slowly, the opportunity exists to deliver tools, content and branding opportunities. How do you expect the mobile strategy to shape up going forward?

Beth Murphy:

We’re seeing just the opposite in terms of revenue growth. Outside of gaming, travel in many ways represents the `killer app’ for mobile commerce. Savvy consumers want to lock in the best deals and ticket prices, no matter where they are. Mobile bookers tend to spend more on travel annually, skew towards younger affluents, and are less loyal to specific carriers/providers.

About EyeforTravel
EyeforTravel is a leading media company specializing in business intelligence for the travel and tourism industry. EyeforTravel provides a series of senior executive travel conference on a diverse range of topics including travel distribution, online marketing, social media, mobile and revenue management.  EyeforTravel also provides some of the most in depth research into global online travel markets and trends. For more information visit

Rosie Akenhead- TDS Director
Phone: +44 (0) 207 375 7229 (London, UK)

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