“PREDICTION IS VERY DIFFICULT, ESPECIALLY if it’s about the future,” said Nobel Prize winning physicist Niels Bohr (1885-1962). Just ask the red-faced economists who, in 2008, forecast years of sustained economic growth ahead. Technologists sometimes fall into a similar category.
Often so-called game-changing products don’t have the impact the clever guys envisage. It was only five years ago when one respected industry observer said travel management companies (TMCs) faced extinction because mobile technology was evolving so rapidly. Their traditional services, he said, would end up redundant. No such thing has happened, of course.
Ask almost any travel buyer, travel manager, TMC boss or supplier about volumes of mobile transactions within a managed travel programme and the answer will almost always be the same: they are minimal.
Conversely, adoption in the B2C (business-to-consumer) space has gained phenomenal traction in certain countries. The channel is fast becoming the most lucrative route to market in many sectors. So why are mobile bookings struggling to pick up pace in the business travel sector – and what lies ahead?
CULTURAL DIFFERENCES
First, it’s important to point out that markets differ across the world. Managing a programme that crosses the Americas, EMEA and Asia-Pacific means your travellers’ demands will vary. Paul Saggar is IT director for the Maybourne Hotel Group – and formerly a nearly-20-year IT veteran at HRG.
“At the moment there are still not large numbers [of mobile bookings] going through the UK marketplace,” he says. “There is a lot of media coverage about the topic, but data and statistics usually come from the US where people are far more forward-looking on this – travel is, for the most part, point-to-point. The UK, on the other hand, doesn’t necessarily lend itself to mobile bookings just yet. Will things change? Absolutely.”
Markets across Asia, for example, have high levels of mobile bookings, especially in the hotel segment. For now, though, travellers closer to home seem content with itinerary management. Rob Golledge, head of marketing and communications for Amadeus in the UK, says: “In western Europe, a lot of people research using mobile before purchasing offline. While [the volume of] mobile bookings may be relatively slow the foundation is now there for it to grow rapidly.”
So point-of-sale mobile bookings have not taken off as many expected, but smartphones are still being used during the trip. Mike Atherton is chief executive of Mantic Point, a mobile technology specialist that works with TMCs. He says there is currently more traction in post-booking amendments, such as extending a trip or booking a later flight.
“In corporate travel it’s more about changing the original booking than doing the initial shopping and booking. But culture is still holding us back.” The long-term trend is generational adoption, he says – meaning that younger business travellers will be more inclined to using mobile to shop and book.
Data seen by Toshi Rogers, director of e-marketing services at Sabre Hospitality Solutions, seems to back up Atherton’s view. Though her company specialises in the direct channel between consumers and hoteliers, she has seen the volume of mobile bookings grow exponentially over the last year and is predicting unprecedented growth in the next 12 months.
“About 35 per cent of our clients’ bookings come from the mobile channel and are mostly made by millennial-generation travellers,” she says. “They are more comfortable playing in that space. But it is where all suppliers should be focusing. You have to fish where the fish are.”
This aligns with a recent survey published by Carlson Wagonlit Travel (CWT). Its research found that 54 per cent of business travellers and 65 per cent of travel managers considered on-the-go mobile booking as an important aspect of travel management. The TMC also predicted the number of mobile transactions would more than double by 2016 (for air, hotel and car rental) and said mobile would represent 25 per cent of all bookings by 2017.
PRACTICAL OBSTACLES
Our cultural reticence towards mobile bookings has not been the only stumbling block. A distrust of transacting online with smartphones still exists for some generations. But there has also been a practical obstacle according to some experts.
Saggar takes up the story. “Until recently, the screen sizes on most devices were not big enough to display all the relevant options,” he says. “But with the emergence of the ‘phablet’ [a cross between smartphone and tablet], the screen dynamics have the potential to provide a much better user experience. The iPhone 6 and its equivalents have already proven this to be true.”
While recognising mobile hasn’t yet changed the business travel game, Paschal Nee, director at Dublin-based Mobile Travel Technologies, says there have been positive trends in certain areas. He has been working in the mobile space for more than a decade. “Are mobiles conducive to bookings?” he asks. “Well, you only have to look at Asia where nearly half of transactions are made using mobile technology. That demonstrates it’s neither an issue with the technology nor people’s desire to use mobile. But even in this market, one supplier has posted very impressive figures.” Nee refers to business-friendly low-cost carrier Easyjet, which claims 10 per cent of its e-commerce is in the mobile channel.
Nee applauds the work being carried out by many TMCs in the mobile space, saying there has been tremendous focus and effort dedicated to improving the traveller’s experience. But progress, he says, faces yet another challenge.
PROBLEMS WITH POLICY
“TMCs like ATPI are doing a lot of bookings through mobile, but policy is the stumbling block for most people,” Nee laments. So far, suppliers and TMCs have made great strides in making certain content available to travellers via apps and mobile websites. But a suitable solution for those who are restricted to making decisions within a managed travel policy has yet to be found. “The policy isn’t something generally accessible to those building a mobile solution,” says Nee. “It’s either tied into the booking engine [behind the online booking tool] or is literally written on paper. That puts a halt to mobile booking in a big way.”
But Nee says procurement managers are almost always focused on cost, and that many in the buyer community are simply not focused on mobile. “Corporates are not flagging it up as a need,” he says. However, the Irishman still believes TMCs have to demonstrate they have a mobile proposition to offer potential customers even if there is a possibility the technology will never be adopted. “It could be the difference between winning the business or not,” he says.
CONTENT AND FUNCTION
Does it really matter what device a traveller is using? Jon West, managing director at hotel booking specialist HRS, thinks that perhaps some in the industry are asking the wrong questions.
“In 2015, technology and devices should not be considered the most important criteria when it comes to converting bookings. Instead, the focus should be on the quality of content and the functionality, which includes real-time bookability and availability.”
West cites Google’s search engine as an example. “Functionality and content are the primary drivers for successful usage and is what makes people come back,” he says. “Even if your app is enabled for the very latest devices, bookers simply won’t use it if the content and functionality are not right – and functionality is linked to the operating system of the device as well as from within the application. So if you are going to launch or use a new tool, it’s essential that it is continuously optimised for the latest software upgrade.”
It appears, then, that we are at the tip of the iceberg. Screens are now big enough for people to see what they’re booking, the younger generations will make up the bulk of the business travel community and, as long as policy can sooner or later be factored into the mobile equation, we will eventually see significant transaction volumes.
However, as Bohr said, it really is difficult to predict the future. Though I expect people will be saying that for years to come.
PERSONAL DIGITAL ASSISTANTS
THE NEXT FRONTIER FOR THE WORLD’S LARGEST TECHNOLOGY companies lies in the realm of artificial intelligence (AI). IBM’s Watson – named after the firm’s first CEO – is at the vanguard. It is a question-answering computing system that uses advanced natural language processing, information retrieval, knowledge representation and automated reasoning.
Back in 2011 the system competed in a version of US TV quiz show Jeopardy! against two of the programme’s most successful ever contestants. The machine scooped the US$1 million first prize. Using similar methodology, Apple (Siri), Microsoft (Cortana) and Google (Now) have each developed pocket-sized versions on smartphones and tablets.
Jason Nash, Travelport’s vice-president of innovation, notes that personal digital assistants (or virtual voice assistants) are becoming increasingly sophisticated. “We haven’t yet seen any of them operate in online travel bookings,” he says. “But it doesn’t take a genius to recognise simple voice-based bookings could soon be delivered through these mobile solutions. It would be dependant on being able to aggregate the right data, but it requires less of a user interface than ever.”