SCOTTSDALE, Ariz. — If there was any single takeaway from this year’s PhoCusWright conference last week, it was that the long-foretold dominance of travel sales by mobile technologies has finally arrived — and in spades.
Everywhere one looked at this year’s event, travel was being researched, arranged, booked, modified or paid for with a few taps on the touch screen of a smartphone or tablet.
One of the darlings of this year’s conference, for example, was Hotel Tonight, a not quite 2-year-old company that provides same-day bookings of unsold hotel rooms. It was built entirely for mobile devices, a design that seems perfectly aligned with travelers’ behavior, since a full 70% of mobile hotel bookings are last-minute, according to PhoCusWright’s founder and chairman, Philip Wolf.
(PhoCusWright is owned by Northstar Travel Media, which publishes Travel Weekly.)
Mobile technologies come in two forms: apps, which are device-based applications that use the Internet but are not websites; and mobile sites, which are websites that run in a browser but have been enhanced to present content in bite-size portions on smartphones and tablets. Both were presented at the PhoCusWright event.
Not surprisingly, online travel agencies (OTAs) have been among the earliest and biggest benefactors of mobile technologies.
Dara Khosrowshahi, president and CEO of Expedia, said that 10% of the OTA’s bookings across all platforms are now mobile, and up to 20% of Hotwire’s bookings are now transacted on smartphones or tablets.
Barney Harford, CEO of Orbitz, an early leader in developing mobile booking tools, said that 21% of his company’s hotel bookings and about 10% of its air bookings are now made on mobile devices.
Erik Blachford, former president and CEO of Expedia and now a venture partner with Technology Crossover Adventures, said companies like Hotel Tonight and other developers of travel apps for smartphones and tablets were altering the way consumers think about booking travel.
“This is the first time we’re seeing consistent double-digit percentages of mobile bookings,” Blachford said. “It had been a trickle.”
Hotel Tonight is among a new breed of startup that is skipping the Web and launching its products with mobile apps from the get-go.
The airline search engine Vayant, which is seeking to break into the U.S. market, said that its pricing made it attractive to many U.S. startups, almost all of which are launching with apps.
Brannon Winn, Vayant’s chief commercial officer, observed that what is common to all these new-breed startups is their market strategy: Start with mobile and then expand to the Web later if necessary.
That strategy “makes sense for inspirational shopping,” Winn said. “You’re waiting, you pull out your mobile phone and shop.”
In fact, said Noah Tratt, Expedia’s global vice president for media solutions, mobile is as much about inspiration as it is about procrastination.
“The conventional wisdom is that mobile is about last-minute bookings,” Tratt said.
While that’s true to some extent, he said, there’s more going on: “People are using mobile apps higher up in the funnel to get ideas about where to travel, to get inspired about where they want to go.”
Increasingly, Tratt said, consumers are moving from device to device to shop — from smartphone to iPad to computer. And although mobile bookings for the most part are in the low double digits today, he said, the move to mobile is a self-perpetuating cycle.
“Even though people are less likely to book on mobile, of the people who buy on mobile, the vast majority, 89%, are likely to do it again,” Tratt said.
“That just shows you what the potential is. We are at the point where people are reaching for their mobile devices to do all kinds of things. That is where the opportunity is, where the growth needs to come from.”
But just having an app is not enough to close the sale. Usability is essential, he said; travel apps have to make it easy for people to follow through and book.
Steve Hafner, CEO of Kayak, which is being purchased by Priceline, said the metasearch company’s mobile app had been downloaded 20 million times. He said that mobile users now account for 20% of all Kayak’s search volume.
Given the current pace of the mobile evolution, Hafner predicted that ultimately, mobile will be the primary way people who are now under the age of 28 will interact on the Web.
But apps are not the only wrench in the mobile e-commerce toolbox. Websites that have been enhanced for mobile devices are also having a significant impact and, said Douglas Quinby, PhoCusWright’s senior director of research, mobile-enhanced websites can be a better tech strategy.
Apps are important, he said, because they make it easy to use functions native to devices, which is among the reasons some of mobile’s current success stories are app-driven.
But, Quinby pointed out, you first have to get the consumer to download the app, which represents a significant extra step, while a mobile website can be reached from a smartphone’s built-in browser. Thus, mobile Web development is likely to remain a key booking and sales strategy.
Moreover, Quinby said, the two technologies are not mutually exclusive and can in fact be complementary. In many instances, companies need both for their mobile strategy, he said.
PhoCusWright founder Wolf perhaps best summed up the buzz about mobile when he expressed his diminishing patience with any remaining naysayers.
“Anybody who doubts the reality and future of mobile is the equivalent to those who doubted the Web 15-ish years ago,” Wolf said. “And, in fact, they should be fired.”
Follow Kate Rice on Twitter @krtravelweekly.
Photo of phone and airplane courtesy of Ilin Sergey/Shutterstock.com.