Mobile Booking Hype?

Is mobile travel technology bringing the next wave of travel e-commerce?

The numbers look convincing. The International Telecommunication Union (ICT) states that in 2008, 50% of all (over 3.4 billion!) people will use a mobile phone. Compare that to 10% of the world with Internet access, and it would seem wise to back a technology with 5 times the number of users. However, there are several factors that mobile technologies need to overcome in order to facilitate large ticket e-commerce.

The booking technologies that companies are proposing are relatively straight forward. Soren Langelund, Asia regional director for Mobile Travel Technologies shed some light into this area:

"Asia's airlines, hotel groups and travel intermediaries can enable their customers to make new bookings and self-manage existing reservations via SMS, via the browsers on their mobile phones or via a downloadable mobile application. This provides a highly convenient service when users are on-the-go or have no access to an Internet-connected PC. "Online" travel is no longer just for PC Internet users."

Now this sounds very promising, and I am fully supporting the advancement of mobile technology (I have an N95 to prove it), however, finding what is needed for a consumer to perform all of these tasks, not just technologically, but psychologically and economically as well, will shed some light into the viability of these new technologies.

Firstly there has to be a willingness to book travel tickets via electronic means. The current trends for online booking are showing a decline in the number of users that are willing to book online. The decline was cited by PhoCusWright, which found that online travel booking by Internet-using travelers had fallen to 62% in 2006 from 68% in 2005. Bookings among those who usually arranged travel offline increased to 31% in 2006 from 25% in 2005. Henry Harteveldt from Forrester summed it up in the Times when he said,

“Customers are tired of spending two or three hours trying to find the airline or hotel or vacation package that meets their needs,"

There will be great advances in semantic Internet booking technology that will bring lost customers back to online booking, but the point is, there are few great interfaces that will continue to retain customers and force growth. Can you see a mobile device with the capabilities for powerful online booking if there are still major issues surrounding booking through PCs?

Secondly, there has to be trust in the medium. The publics trust in online bookings and reservations has taken quite some time to develop. Every time my Mom hears a story on the news about a computer virus, she will give me a call and warn me that my information is not safe. This conception is common. Can you see the public willing to shell out thousands of dollars though a mobile device? News stories like this one do not help.

Thirdly, there must be usage of a mobile Internet connection, that is if the program/app is to book live inventory. The fact is, most people use their mobile phone for talking, based on ComScores Oct 2006 research, U.S. mobile Internet usage is at 19% and Europe averages 29.2%. I am sure that these numbers are slightly higher in recent months, however, average people are not using their phones for complex operations. I was only able to find research on the G8 countries as the mobile Internet penetration rates are lower elsewhere. So I am curious as to how we will see killer mobile apps for travelers without a large mobile Internet user base.

I got the opinion of Fred Ghahramani, founder of airG, owners of the worlds largest mobile community. Here are his thoughts on mobile travel bookings,

"It's possible that I'm completely missing the point, but for most people purchasing an airline ticket is an expensive out-of-pocket investment - something that the average person does maybe once a year. So they'll probably take their time, do their research, shop around, and these are all things that are done on a PC or in person at a travel agent. In contrast, most transactions generated on a mobile phone are impulse buys, a ringtone here, a small video there etc. Now there's definitely going to be really busy people out there that travel in high frequencies for business that are not spending their own money, but most people like this already have in place a support network of secretaries, assistants, and corporate travel agents. For these reasons, I can't really see buying airline tickets on your mobile phone to become a mass market practice. Now there will always be other applications, perhaps skytrain tickets, movie tickets, etc, so it should be interesting to see the market develop."

As devices become more robust, and as data access rates lower, mobile computing will be ubiquitous with travelers. In the immediate future I can see apps for directions, local tours and attractions, recommendations, destination information etc, but I have difficulties seeing mobile bookings for large ticket items. You can see some examples on the iPhone app site. Apple currently has 42 apps dedicated to travel, one by Travelocity. Am I wrong? Do you book large ticket items over your phone? Let me know what you think.

Tourism Meatball Sundae?

Yesterday I attended Seth Godin's webinar "Meatball Sundae", thanks to Darren Cronian for the invite! Seth has the gift of making metaphors that people can really bite into, and this one was no exception ;). His main point is that "it is not sufficient to do what you used to do (meatballs) and dress it up (sundae)". He covered 14 current trends that are revolutionizing marketing and the internet, so I thought of how these trends could be used within the Tourism Industry. Please let me know if you have any ideas as well.

So here they are, the 14 (he actually gave 15) trends that are revolutionizing marketing, with a tourism cherry on top:

1. Direct Communication - Gone are the days of "if you make it, they will come" people want involvement and feedback, they want to connect and have relationships. If your company doesn't have a way to connect with their customers, you better start!
2. Amplification of Consumers - "You might as well assume that everyone you meet works for the New York Times" That is a challenging thought, you have to expect customers to write about you, and give them something to write about (good hopefully)
3. Authentic Stories - People most often don't buy based on stats and figures (I try to) but rather buy on stories. Your brand needs to have a consistent story that it is sharing from multiple angles. Your frontline staff has to be consistent with your advertising media.
4. Speed - This current generation is used to instant gratification. We want to see results now! If your company takes 3 days to go over a reservation or booking and your competitor can guarantee a booking or reservation instantly, well then your company will loose. Online reservations are a first step!
5. Long Tail - Unique is cool, in the travel world doing the same tour as everyone else is passé. Customers want to have options that cater to their own desires and needs as opposed to a generic bulk package that is fine for the norm or average. The travel industry needs to look for ways to tap into the long tail of Tourism.
6. Outsourcing - If you can lower the operations cost by outsourcing components of your business, you will then have the energy to focus on the marketing of your service / product. This goes beyond developing world call-centres, the opportunities are endless.
7. The Dicing of Everything - The internet has broke everything into pieces. Customers access your information from multiple avenues, your main page is only one of the doors. This reminds me of my friend Norm Rose's article on Service Oriented Architecture.
   
8. Infinite Choices - How will you stand out? Really, in the last year there are more then 30 new travel sites, what are you doing to get talked about? The internet is really a social buzz network, and if you don't have bees (unique 'wow' point), then you don't have buzz.
9. Consumer To Consumer - Again, people want to connect and share experiences and stories, a very successful model is to build the platform and then get out of the way. Can you imagine platform that brings suppliers together with resellers online, connecting that long tail content! (Keep tuning in for more updates...)
10. Scarce and Abundant - We used to have abundant spare time, now we don't. Things that were scarce are now abundant (access to information). You again have to really work to differentiate your brand to make it clear that you have a unique selling position, that isn't a common message.
11. Big Ideas - Products are now the big ideas, think iPhone, pod hotels, and other industry shakers that are pushing industries in new directions.
12. Connect With People - Gone are the days of mass 'dumb' marketing, sending flyers and spam to unsuspecting victims. People want value and if you can shape your marketing to deliver value, then you get 'permission marketing'. This can be a witty informative newsletter with customized information, or really anything that you feel your customer will want to have.
13. The New Rich - Well, this on is catered to a particular segment of our society that I am personally sick of seeing on the front of newspapers and magazines, but Seth is talking about it, so we best pay attention.... If your product is targeted at the next Paris or Britney, they you better be ready for customization and appealing to strange and unique desires.
14. The New Gatekeepers - Being a gatekeeper isn't as important as it used to be. It is more important to be a leader as opposed to being a leader. People will follow those that they look up to, and not wait for traditional channel to grant him/her access to mass media (think Mr Scobble).
15. Ubiquity or Scarcity - You need to choose, if your product or service is in between, then you will not profit. You need to have a set position to either drive demand, or make yourself a household name.

Well that is it, a little long, but let me know if you have used any of these trends, or you are planning on implementing some in the future.


Update: Video Now Available

Travel Technology Update Podcast - January 11th

Have you heard the latest Travel Technology Update Podcast? Click on the link on the top right of my blog to hear the latest news.

Topics discussed for January 11^th:

1. The First International Bloggers Summit with PhoCusWright@ITB
2. Site Review: www.Kango.com
3. Joe Buhler's Predictions for 2008
4. Stephen's 5 must do travel marketing investments with online services:

• Blogging - Blogger.com, Wordpress.com
• Photos – Flickr.com
• Video – Vidler.com, YouTube.com
• Podcasting – Podomatic.com, Bigcontact.com
• Blog Directories – Blogcatalog.com, Mybloglog.com

5. IFITT Enter 2008 conference - www.ifitt.org

Joe Buhler - Expert Interviews

I had the pleasure of talking with Joe Buhler today about DMOs, the Travel Industry and eCommerce. It was a fascinating conversation that was recorded, that is until a power-spike reset my computer, so I will summarize our talk, but it will not be verbatim.

Joe has a world of experience in the Travel industry, he has work with Kuoni Travel, Switzerland Tourism, Euro Vacations, and is currently a Senior Destination Analyst for PhoCusWright, the Executive VP for Level 9, and Principal of BuhlerWorks, a strategy-marketing & eCommerce consulting service for the Travel and Tourism Industry.

We focused our conversation on DMOs and the future of online distribution. Again, this is a recap and is not verbatim.

Phil: Do DMOs have a future with Web 2.0 technology and eCommerce?

Joe: DMOs traditionally have been resistant to be early innovators in the online travel space. They are resistant because they basically are risk averse and have a long history of set standards and procedures they follow. Also, their current marketing and advertising relationships do not lend themselves to having a powerful online presence.

Phil: How do you see DMOs role evolving?

Joe: DMOs have great potential to gain revenues for their organization through enhancing their web presence. They currently provide great content, pictures and directories, but are leaving site visitors wanting more. Back when I worked with Tourism Switzerland we identified the four steps in the travel booking process, Dream, Learn, Plan, Go; DMOs are helping with some of the first steps, however potential visitors are having to go to external partners to complete the experience. We see some of the DMOs adding basic hotel booking capabilities and wanting an award for their "innovation", when there is so much more that they should do to position themselves as the source for one-stop planning and purchasing a trip to a destination. We see sites like Kango, that are incorporating semantic search capabilities, and generating relevant content that visitors are looking for. If DMOs could harness this technology, and pair it with full vacation planning, then this would add tremendous value to DMOs site guests and stake holders. DMOs have the power to bring small stake holders like hotels or tours and attractions, together; they are the authority on that geographic area and guests are looking to plan and book. DMO website needs to address those needs or else they will loose credibility and relevancy. "Travel Websites in general including those of DMOs need to catch up with customer expectations".

Phil: What are your predictions for 2008?

Joe: I see the start of an incremental shift beyond Web 2.0. (Lets hope the numbering system ends with 2!) There will be more supplier initiatives to selling their product directly, thus cutting into OTAs revenues, also long tail product will start to find a place on the web. Hopefully we will see some DMOs acting as an aggregator of long tail products. OTA's will have to focus their technology efforts on offering customer-designed dynamic packaging including for multiple-destination trips. Only this type of bundling allows for margins being added, which is not possible for single commodity component sales. Otherwise their margins will have to come from elsewhere like the recent media based deal by Expedia with IHC.

Joe had many other insights to share, however they were erased by a strike of my electricity. If you are interested in contacting Joe for consulting work, you can find his contact information on his blog, BuhlerWorks.

The First International PhoCusWright Bloggers Summit at ITB

After the success of the Bloggers Summit at PhoCusWright 2007 Orlando, PhoCusWright has decided to grow the event to a truly international collaboration. The first International Bloggers Summit will happen at ITB Berlin in March. There have been whispers of this event for some time (Jens, Vicky, Stephen) and it is now official! The summit has several components that will ensure a great time for bloggers:

Travel Industry Bloggers welcome and idea sharing
Wednesday March: 10:30am – 12:30pm
Includes exclusive access to travel industry leaders, the Bloggers Briefing session will give bloggers a chance to generate the latest news.

Tips From The T-List presents Blogging with the Long Tail of Tourism
Workshop to be presented and open to all ITB Berlin attendees
Wednesday March 5 in Hall 7.1b, Auditorium London 3: 2:00pm – 4:00pm

This workshop will show how an active, content-producing network of bloggers can have a growing influence on customers’ online spending habits.

Travel Industry Bloggers meeting
Wednesday March 5, 4:30 – 5:30pm
Gather and share techniques, strategies, contacts and more

PhoCusWright@ITB Conference
Thursday March 6, Hall 7.1b, London 3: 10:15am – 6:00pm
Hall 7.1b, Auditorium London 3
Take advantage of PhoCusWright@ITB, one of the premier events of ITB’s Convention.

Bloggers Summit Final Gathering
Regroup after PhoCusWright@ITB and discuss highlights, lowlights and everything in between
Cocktails and chatter - this event will NOT be hosted, and it will be an informal gathering
Thursday March 6: 8:30pm - late

This wifi enabled trendy bar will be a great back drop to unwind and recap all of the great finds from ITB. Anhalter Bar Mövenpick Hotel in Berlin. A private area of the bar will be reserved, wifi will be available, and there will be drink specials. Hope to see you there!

This summit is included with your PhoCusWright admission, and travel industry bloggers can apply for a bloggers entry pass. For more information join the Facebook group:

http://www.facebook.com/group.php?gid=6574840815

Email me if you are interested in attending: phil.caines [at] rezgo.com

Are you Connected? Toursim Industry Bloggers Unite

How connected is the Tourism Industry blogging community? There are numerous communities out there that are helping bloggers stay in touch. This post was inspired by Jens, who recently re-launched his popular marketing blog. If you are looking for ways to connect with fellow bloggers, here are some great links to help you connect:

Social Networking:

T-List Facebook Community
The WIWIH Bloggers Group
Turismo 2.0 (Amazing Spanish Travel Industry Blogging Network)

Indexing Sites:

Tips From The T-List
The Ranked T-List
The Recommended (Travolution's Tourism Industry Bloggers)

Blogger Meet Up:

CES Bloghaus 2008 (not for travel but still one of the largest and most financed meetups)
ITB Berlin March (More information to come)
PhoCusWright 2008 (More information to come)


Staying connected is the best way to grow our community, and new technology is making it easier to stay in touch. Let me know if I have missed anything or if you have any recommendations.