We wrote last week about the rapid growth of M-Commerce, the mobile-centric sibling of E-Commerce expected to account for over 15% of total digital sales this year. As customers’ attention shifts increasingly to mobile, retail is not the only category expected to see significant growth.The travel industry underwent its first massive digital transformation when brick & mortar travel agencies caved to online aggregators like Orbitz, Expedia, and Priceline that offered low prices and a “do-it-yourself” user experience by searching and comparing hundreds of potential itineraries across numerous airlines, hotels, and car rental companies.Now, the industry is poised for another major transformation as customer engagement shifts from the desktop computer to the smartphone.
An estimated 41 million travelers will book at least one itinerary from a mobile device this year, an increase of approximately 60% since 2013. This rapid growth is projected to continue through 2018, when a predicted 66.2 million customers will book a travel itinerary from a mobile device: an almost 200% increase from five years prior.The increase is specific to mobile, not an increase of overall digital travel bookings. One 2014 report indicated that travel bookings via a mobile app or responsive website are growing at rate 10 times larger than that of travel bookings on a desktop computer, according to tnooz.And Mobile Travel is good for business: travel bookings made via mobile are generating more revenue per booking than those made on other digital channels.After analysis of over 1,000 travel sites, the 2014 Travel Flash Report showed that the average value for air travel booked on mobile is 20% higher than the average value of air travel booked on a desktop computer. Mobile car rentals were reported at an average value 13% higher than desktop.The one exception is the accommodation section: mobile hotel reservations reported a value 30% lower than desktop hotel reservations, possibly driven by the popularity of last-minute booking apps and flash sales on mobile. The advantage here may be that, even though the average value per booking is lower, mobile hotel reservations create an opportunity for hotels to sell rooms that would otherwise be empty.
The surge in popularity of mobile travel could be related to the growing number of companies heavily engaged in the space.Relative newcomers like sharing economy giant AirBnb and mobile-first aggregators like Hipmunk, Hopper, and Hitlist have joined the stalwart travel mainstays in an increasingly crowded category competing fiercely for customers’ attention and travel budgets.One thing the new class of travel companies has in common is a focus on simple, highly-personalized user experience.Compared to the larger desktop screens that once dominated customers’ digital lives, smartphones don’t afford the same amount of digital real estate to browse dozens of itineraries at once. Customers driving the Travel industry’s mobile-centric transformation no longer value the sheer number of potential itineraries an aggregator can deliver.Now, the most successful travel companies are the ones who can personalize the user’s experience by filtering through hundreds of potential itineraries to recommend a smaller set that fits the customers destination, schedule, and budget.To hold customers’ attention in the crowded Mobile Travel industry, companies should focus on building simple, high-personalized mobile experiences that fit seamlessly into customers’ lives and deliver valuable travel experiences for the right price.