Today, around 60 million Americans book travel through their mobile devices. This will grow by 45% to over 86 million by 2019. Mobile travel sales will see similar growth—from $65 million this year to nearly $95 million by 2019.
But this isn’t an American phenomenon, not by a long shot. Last year, TripAdvisor announced that the U.S. ranked eighth in a Top 10 list of countries with “connected travelers,” or consumers who use mobile devices to plan or book a trip. Countries such as Thailand, China, Indonesia, Brazil, Malaysia and Spain all had much higher percentages of mobile-centric travelers than the U.S.
But as mobile-minded as most global travelers are, businesses within the travel industry are struggling to serve them in authentic ways. They're bleeding out on opportunity, some experts say.
“The most storied players in online travel—the ones who built multibillion-dollar businesses off the back of search—aren’t keeping pace with the mobile-first traveler. Not even close,” wrote Travis Katz, CEO for travel site Gogobot. “In fact, many companies are so far behind that without a radical change in course, they’re unlikely to catch up at all.”
This is bad news for travel-related businesses … especially ones that want to expand and serve international customers online.
Mobile: Where the Action Is
Companies that haven’t adapted are already choking on the dust of their pro-active competitors. When it comes to mobile-based booking and research, the industry has already hit a tipping point. Nearly 52% of U.S. digital consumers are now booking trips through their mobile devices, one study said. That represents a year-over-year increase of over 18%.
Last year, mobile represented about 30% of all digital travel sales; this will blossom to 46% in just three years. Nearly 75% of Americans are now conducting travel-related research on their mobile devices too, the study said.
Smartphones have become especially useful for making 11th hour travel arrangements. Nearly one-third of business and leisure travelers use their mobile devices to make last-minute bookings.
Companies within the industry are investing heavily to convince customers to embrace online direct booking, particularly through mobile apps and the mobile web. According to one study, 20% more consumers have downloaded booking-site apps in 2016 than compared to last year. As a result, direct bookings are higher than ever. During the past year, app-based bookings rose from just over one-third of users to nearly one-half, the study said.
Hotels, for instance, are doubling down on direct bookings. A recent Hilton international marketing campaign incentivized customers to sign up for the company's loyalty program by offering the lowest-possible rates when booking via its smartphone app or website.
According to Hilton’s leadership, these channels now account for 25% of its business.
“The business we’ve received through web direct is higher than it’s ever been, and is growing faster than ever…,” Hilton’s CEO told travel news site Skift. “ (B)usiness generated from our mobile app is up nearly 150% year-over-year with downloads exceeding 70,000 a week, an increase of 200% over last year.”
This extraordinary shift in how consumers are researching and booking travel represents a huge opportunity for companies within the industry—particularly those that want to serve consumers in global markets.
Exclusive Insights on the Mobile Opportunity
According to Google, mobile conversion rates on travel sites grew nearly 90% between 2014 and 2015. Time on-site dropped by 7%, a good thing, thanks to customers’ ability to quickly find what they’re looking for. MotionPoint’s data and experience jibe with these findings, says Erdem Tokmakoglu, a Global Online Strategist with our Global Growth team. Historically, consumers have used their nearest device to begin travel-related research (often their smartphones), and then move to desktop PCs to complete the booking.
"That means it's very important to remove any unnecessary steps from the process to improve mobile-based conversions," Erdem explains. "For instance, make mobile checkout as easy as a one-click purchase. to remove the transition from mobile to desktop in order to keep the user's attention."
This tactic works. Using such approaches, the share of mobile bookings grew by more than 20% within a four-month period earlier this year, independent research suggests.
MotionPoint operates translated websites for dozens of companies within the travel industry, from hoteliers and airlines to car rental businesses and beyond. We've seen a seismic shift in how global consumers use smartphones, and transact on these locally-optimized mobile experiences.
Based on data gleaned from the translated sites we operate in domestic and global markets, mobile bookings in travel have grown 1,700% between 2011 and 2015. In the past six consecutive quarters, these bookings have grown, while desktop bookings have dropped. (The number of total travelers hasn't changed much during this period.)
"The pace of mobile's rise, of course, varies region by region-and by the general quality of the sites' user experiences," Erdem says. "The share of mobile has grown from about 10% of a localized site's share of traffic to at least 25% for low-end websites. High-end websites have seen growth of up to 45%."
New mobile sessions among global consumers are up to 10% higher than desktop sessions, our research suggests.
Bounce rates remain understandably higher among smartphone users when visiting localized sites that are not mobile-friendly-about 15% higher, in fact. (We examined data from 2013 to Q3 2016.) Our takeaway: travel-industry websites that fail to embrace mobile-friendly responsive design are missing out on opportunities for engagement and conversion.
Some verticals within the industry are missing out more than others. Generally, car rental and hotel companies have been slower to transition to a mobile focus (at least for their translated online experiences). Their desktop sites generate 41% more visits, 38% higher conversion rates, and 73% higher revenues than their mobile sites.
Interestingly, average order values are slightly higher on mobile, we’ve found.
When we examine search engine data for the travel sites we operate, desktop sites on average have 19% more clicks, 27% more impressions and 32% better SERP positions than their mobile counterparts. Again, this reveals a continued focus on desktop sites for international consumers. Opportunity awaits those who embrace mobile-first customers.
"Click-through rates are currently almost identical between our localized desktop and mobile sites," Erdem says. "However, for countries like South Korea-which have high mobile penetration and high mobile dependencies-mobile and desktop ratios are the same."
Mobile-First Solutions for Global Customers
Beyond translating their mobile-friendly websites (or mobile apps) for consumers in new markets, how can companies in the travel industry boost engagement and revenue through their mobile experiences? Erdem has some pointers.
"First and foremost, focus extensively on your search engine optimization," he says. "Also, have an active 'in-language' social media presence in your new markets. These should be in social networks that are popular and relevant to those markets. This will ensure that when a potential guest is looking for accommodation, your brand is clearly represented."
Indeed, over half of smartphone users discover new companies and products when conducting searches on their smartphones. Providing mobile-friendly experiences through sites with responsive design is critical, Erdem says. Localized apps are also important.
Further, "try to have bookable descriptive content to create dynamic travel packages with flights and hotels for your global customers," Erdem says, "and complement that content with personalized text and images that resonates with what's important to them. Invest in a website translation partner that can provide localized on-site search, too, so shoppers get to these packages quickly."
In fact, consider the emerging global Millennial consumer as an important constituent to serve, Erdem says. They’re growing in affluence and influence worldwide, and are super-users of smartphones. They’re also strongly influenced by online sources such as review sites, blogs and social media. One study found that about half of Millennials use smartphones when planning trips, Erdem says.
"Millennial mobile users look for quick information and easy call to actions," Erdem continues. "Remove the transition from mobile 'dreaming'-meaning, research-to desktop booking with quick mobile-site load times and easy one-click checkout funnels."
Travel service providers should also find ways to segment mobile users who look for last-minute mobile booking opportunities. These users are prime candidates for special discounts and advertisements, Erdem advises. As we described earlier in this post, consumers use their smartphones heavily for last-minute bookings.
It's become clear that companies within the travel industry must leverage mobile-friendly-if not mobile-first-online experiences to gain and maintain a competitive edge. This is especially true, should these businesses want to engage consumers in emerging markets.
In fact, the industry will soon see further mobile-centric innovations as recommendation systems filter and display relevant options with predictive analytics. Advertising analytics will monitor conversion estimates of users in order to estimate cost-per-clicks. Social networks will be used in predictive analysis to engage with social media users.
"Prioritize mobile usage before it is too late," Erdem says. "And cater to international consumers with mobile experiences that resonate with them. Serving content in their preferred languages, and offering travel products and packages that illustrate an understanding of their unique needs, will help you win new customers in new markets."
MotionPoint helps companies in many travel-related verticals serve new customers in domestic and global markets. Contact us to learn how we can help your business best serve mobile-first travelers at home and abroad.