Mobile Applications - A personalised approach to hotel marketing

Increased usage of smartphones has led to introduction of the mobile applications to the hospitality and travel sector. In fact, the platform is fast gaining popularity within the industry. But will they catch on enough to become part of consumer companies’ marketing budget? KEITH D'SOUZA explores the value of mobile applications to businesses.

Search giant Google reported last year that mobile searches for hotels had risen by an astonishing 7,000 per cent on a yearly basis. Here is another staggering figure: 11.3 million consumers accessed hospitality and travel services via mobile in EU5 countries (France, Germany, Spain, Italy and the UK) alone in February 2011, as reported by Jeremy Copp, Vice President, Mobile Europe, comScore. He shared this information at the recent EyeforTravel Summit, where the focus was on the growth of smartphones in the hospitality and travel industry.

Indeed, a quick trawl through hospitality and travel-related sites will present numerous write-ups and reports that feature incredible statistics that bring to light the amazingly fast growing mobile platform in the industry, with experts projecting that the mobile web will surpass the traditional web in size by 2013. The main reasons for hospitality, and on a larger-scale, travel brands and consumers alike to target mobile-based initiatives include location-based marketing, optimising consumer loyalty programmes and last minutes bookings. US-based Hilton Grand Vacations has stated that a study of their consumers’ research and planning habits show that 70 to 77 per cent of travellers book just a week prior to travel and 40 per cent on the day of travelling itself, numbers which were unheard of, just a few years ago.
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The combined revenues from applications funded by pay-per-download (PPD), value-added services (VAS, including freemium and subscription) and advertising is expected to rise from USD 10 billion in 2009 to USD 32 billion in 2015, based on the report published by Juniper Research.

For hoteliers and their consumers, mobile applications provide price ranges of nearby hotels, restaurant rates, as well as on-demand navigation. Mobile devices integrate various facets of customer service such as seamless exchange of information, payment of goods and services, check-in facilities and most notably, personalised marketing messages, through a simple swipe of a device against an interface. This not only brings about competence of mobile-based service but also is a viable option for personalised interaction with the supplier. In short, the mobile platform works as a connective tissue between the online and offline entities and rightly, should not be considered as a separate platform, necessitating a different marketing strategy. Instead, the platform should be used as a mean to bring together the brand experience, showcasing stability and uniformity to the consumer, as recommended by Google earlier.


With mobile usage outnumbering desktop computer usage world-wide, and particularly in the Asian countries, it is becoming imperative for companies to invest in smartphones and tablets. This trend is coupled with the fact that consumers are turning away from hotel chain websites, as reported in an eDigital Research study, adding to the importance of the mobile platform. The study reviewed hotel chains, agents airlines, holiday camps, self catering accommodation, cruises, tour operators and travel agencies. Citing insufficient accommodation and destination information and lack of customer feedback, hotel chain websites were deemed as ‘too corporate’ and thus, scored low for online customer usability.


Robert Dawson, Vice President, Internet Marketing & Web Development Services, Sabre Hospitality Solutions has offered an apt explanation for the popularity of the mobile platform. He stated, “The ability of the mobile device to pay for goods and services, coupled with the seamless exchange of information electronically, enabling payments, check-in and personalised marketing messages with a simple swipe of the device against an interface, provides for not just travel efficiency but new opportunities for personalised interaction with the travel provider.” However, mobile application usage is a modest concern in the Indian hospitality and travel market. According to Sunzay Passari, EVP - Telecom & VAS, AGC Networks Limited, “Actual bookings of hotels or flights through these applications are still very limited in India. The opportunities are quite promising. In our experience, the urban and semi urban consumer is already using mobile applications for information and as a discovery mechanism.”


Mobile applications for the hotel industry
For the above-mentioned reasons, it is not surprising that the hotel and travel brands across the board are launching mobile applications for their customers. For instance, InterContinental Hotels Group (IHG) has launched iPhone booking applications for each of its seven brands in 2011– InterContinental Hotels & Resorts, Hotel Indigo, Crowne Plaza Hotels & Resorts, Holiday Inn Hotels and Resorts, Holiday Inn Express, Staybridge Suites and Candlewood Suites. Moreover, in just over a year, IHG has seen a nearly 1,000 per cent increase in room night bookings from mobile devices. During the first five months of 2011, IHG has already surpassed its 2010 total number of room night bookings from mobile devices. The company also revealed that around 65 per cent of guests who book through a mobile device stay at IHG hotels the same night or within one day. Speaking about the company’s approach to social and mobile media, Del Ross, Vice President, Sales and Marketing, IHG said, “If it works, keep doing it big and bold as you can until it stops working.”


In India, Prologic First, an employee-owned software development and marketing company has launched a suite of applications for smartphones that hoteliers can use for efficient management. These applications are available on Apple’s iPhone4, Samsung’s Galaxy Tab and Blackberry Torch. “Mobile applications deliver tangible value. The future is about convenience, efficiency, speed and optimisation of revenue through effective processes,” said Amlan Ghose, Managing Director, Prologic First. India is seemingly a hot-bed for the development of travel and hospitality geared mobile applications. Bengaluru-based NIIT Technologies has developed Pegasus Solutions’ RezView Mobile product, a highly configurable hotel booking and reservation management application that is based on Pegasus’ RezView NG enterprise delivery platform. The application allows the company’s hotel customers to configure the application to meet their branding and display requirements, thus providing a consistent brand experience across different digital platforms, including both website and the mobile interfaces. It is available as a native application on the iPhone, the iPad and Android phones, and as a browser-based application for other mobile devices.


New Developments
Near Field Communications (NFC)
One of the most exciting innovations coming out of the mobile platform is Near Field Communications (NFC). This smartphone chipset is expected to revolutionise the way that the industry sells travel in the future, as stated by Dawson. He stated that NFC enabled phones can replace hotel room keys and guests can even undergo a fully self-serve hotel check-in process through the mobile device. Another advantage of NFC-enabled phones is the facility to interact with multiple items such as billboards and business cards. Thus, it could be leveraged to bring inanimate items throughout the hotel to life by providing real-time data and updates to a mobile device by simply swiping it through the NFC embedded items.


Augmented Reality (AR) Applications
Augmented Reality (AR) enables the merger of recorded and animated images that can be viewed in real time. Earlier, augmented reality applications were developed for purely entertainment purposes such as futuristic baseball cards. Now, the new applications have shifted their focus to a broader spectrum including supplying travellers with valuable information and solutions to their possible queries. Augmented Reality applications comprise diverse layers, such as museums, historic websites, dining, real estate and much more. The tourism layer is greatly utilised as it allows travellers to pick up considerable knowledge about their vacation destination prior to arrival. An example of a travel augmented reality application is the Wikitude World Browser that overlays the camera’s display and the objects that are viewed with additional interactive content and information. It was voted the ‘Best Augmented Reality Browser’ by Augmented Planet in 2010.

Quick Response Code
For small and independent hotel brands, a mobile application that has greater significance is Quick Response Code or QR Code. The specific matrix barcode consists of a two-dimensional matrix of black modules arranged within a square framework with a white background. It can carry business Uniform Resource Locators, discounts, promotions as text, images or embedded features. QR codes are placed on business cards or on traditional marketing materials such as brochures. The benefits of this application is two-fold as it allows the business to change what the consumers access through the QR code, such as a special discount, without having to change the non-digital marketing formats. It also provides consumers with a new mean of interacting with the business.


QR code applications are quickly gaining popularity in the Asian countries such as Japan, China and India. They are available for Androids, Blackberry and other leading mobile platforms while some mobile manufacturers offer native QR code reading software for mobile camera phones.


An emerging trend that has caught the attention of hotel and travel marketers is the daily consumption time in mobile applications in comparison to mobile web consumption. Studies from analytic experts such as Flurry Analytics, a provider of in-application analytics for mobile devices, indicate that daily time spent in mobile applications is for the first-time exceeding that of desktop and web consumption. This has lead to heated debate regarding the usability factor of the two devices. PhoCusWright reports indicate that 67 per cent of travellers and 77 per cent of frequent business travellers use mobile devices to find local services. The latest eMarketer survey (October 2010) also adds strength to the belief that consumers prefer mobile websites., thus compelling businesses to focus on a website-centric mobile strategy. The survey revealed that 81 per cent of consumers prefer mobile websites to mobile applications for research products and prices while 71 per cent prefer mobile websites for comparing products and prices. The survey also conducted a category-based analysis of mobile browsing vs mobile applications, as given in the above-mentioned table.


In every other category that pertains to travel research, planning and purchasing, mobile users prefer to browse or search relevant mobile website content. A recent EyeforTravel poll showed that 71 per cent of online travel companies do not have a mobile application. These figures compel businesses to focus on a website-based mobile strategy. In addition, small and independent hospitality and travel businesses cannot encompass the cost of mobile marketing into their budget.


According to Travel Distribution and Marketing Barometer report, May 2011, published by EyeforTravel, around 67 per cent of travel companies in the US with a marketing budget of less than USD 4,00,000 have found to be not tracking and recording traffic from mobile browsing or applications.


Convergence of social media and mobile platform
Despite the popularity of mobile applications, companies are not interested in investing capital into a new distribution and marketing channel. This raises the question of why is it that hotel and travel businesses are not waking up to the growing importance of mobile applications. Studies by The Knowledge Group, one of the largest data firms in the global meetings and convention industry, have shown that while most businesses consider mobile applications to be the wave of the future, only a handful have first-hand knowledge of them. As a result, they are not able to fully capitalise on the new technology. Passari advocates, “A multimedia rich campaign is most effective using modes like MMS for travel and hotel. There should be a digital cross platform campaigns. SMS may not be the effective channel for the purpose. A campaign with a call to action via voice based application for the process completion could result in business.”


However, the mobile platform is only going to grow and the rapid development of social networking sites will push new developments in the mobile platform to new heights. Hotels and travel businesses need to give importance to ‘Customer relationship management’ that encompasses digital marketing, brand connect, m-commerce and loyalty solutions. Convergence of the two platforms requires a combination of brand mobile sites, social network integrations, QR code promotions and tracking, coupons, product information, consumer reviews, locators, event based marketing, payment and white-label m-commerce platform. Thus, the key for effective incorporation of mobile applications into the mobile marketing strategy is functionality.