Mr. Starkov

Mobile Technology

Hotelier’s 2012 Mobile Marketing Action Plan

By Max Starkov, President & CEO, Hospitality eBusiness Strategies Inc

Hotel guests—past, present and future—are increasingly becoming mobile-ready, and hoteliers have to adequately respond to this growing demand for mobile services. This is the reason why all major hotel brands, travel suppliers and OTAs have mobile Internet initiatives in place, including mobile brand websites, mobile applications (apps), m-CRM and mobile marketing.

The mobile Web has already become an important travel planning and booking channel in the U.S. and worldwide. Sixty-seven percent of travelers and 77 percent of frequent business travelers have already used their devices to find local services (e.g. lodging) and attractions (PhoCusWright). Google reports that hotel mobile searches have increased by 3,000 percent and that now over 20 percent of all searches are conducted via a mobile device.

The most important statistic in this growing trend is the number of smartphone users. Smartphones are changing how we do business in hospitality, how we market, how we service customers. There are nearly 75 million smartphone users in the U.S. alone; their number will exceed 100 million by 2014. Approximately 50 percent of the U.S adult population will have a smartphone in 2012. The mobile web use is all about data:

• The average cell-phone usage pattern is 70 percent voice
• The average iPhone is only 45 percent voice
• Mobile data traffic expected to increase by 4,000 % by 2014 (2011, Morgan Stanley)

Hotel guests and travel consumers in general are already mobile-ready, and hoteliers and travel suppliers have to respond adequately to this growing demand for mobile travel services. In 2011 over 4.7% of hotel website visits and over 3% of online bookings came from mobile devices across our hotel client portfolio (HeBS Digital). Morgan Stanley projects that by 2014 mobile Web users will surpass the “traditional” desktop Internet users:

The mobile web is the perfect distribution channel and M-Commerce (Mobile Commerce) is already exploding:

• U.S. 65% compounded annual growth in M-Commerce 2010-2014 to reach $24B (Coda Research)
• In 2010 eBay had $2 billion in mobile sales; expects over $5 Billion in 2011
• Worldwide, mobile commerce will reach $119B in 2015 (ABI Research)
• Travel suppliers and OTAs report 3-5 times increase in mobile bookings in 2011 vs. 2010
• A number of hotel brands reported ten times increase in mobile bookings compared to a year earlier

Why is the Mobile Channel Important in Hospitality?

Today’s hyper-interactive travel consumers demand "immediate, anywhere and anytime" Internet access, instant information and transaction capabilities, user location-oriented services and personalization – attributes that only the mobile web can deliver. Mobile users demand not only instant access to travel planning and booking capabilities, but a mobile web experience that rivals and surpasses the desktop Internet experience.

HeBS Digital’s 5th Annual Benchmark Survey on Hotel Digital Marketing Budget Planning shows that mobile marketing has already become a very important tool in the hotelier’s digital marketing arsenal. A growing number of hoteliers fit a mobile site into their budget planning (37.5% in 2011 compared to 25.9% in 2012) and a mobile booking engine (37.5% in 2011 compared to 22.4% in 2010):

The results of the survey also identify a troubling trend: an increasing number of hoteliers (38.4% in 2011 vs. 32.8% in 2010) do not plan any mobile marketing initiatives

To App or Not to App?

Here at HeBS Digital we are constantly being asked by our hotel clients whether it makes sense for a hotel to develop its own mobile app or if the hotel should focus on developing and enhancing their mobile website. From the survey results table above we can see there was a dramatic decline in hoteliers planning for an iPhone app: from 24.1 percent in 2010 to 8.9 percent in 2011.

I believe that hotels do not need a mobile app if they are a single-property, independent hotel. Nor do franchised hotels and resorts or smaller and mid-size hotel chains and multi-property companies. These hotel companies are better off focusing on building and enhancing their mobile websites and promoting the mobile site via mobile marketing initiatives.

Here is why:

Mobile User Preferences:

A recent study by CEM4Mobile Analytics in August 2011, which used an actual sample of over 56 million mobile impressions from mobile services supporting both applications and browsing-based access, concluded that the vast majority of users (90.15%) prefer mobile browsing vs. mobile apps:

Another survey by Adobe and eMarketer clearly shows that users prefer a mobile app only in the following three categories: social networking, music and games. For everything else they prefer to browse (i.e. search for mobile websites).

Mobile Apps vs. Mobile Browsing:

In every other category that pertains to travel research, planning and purchasing, mobile users prefer to browse or search relevant mobile website content.

Strong Brand Recognition Needed for Success:

In hospitality, the success of a hotel mobile app is directly correlated to the strength of the hotel brand. Mobile apps make sense for well-established hotel brands (e.g. Marriott, Hilton, Starwood, etc.) with millions of members in their loyalty programs and only as an additional option to these brands’ well-developed mobile brand websites. Smaller hotel companies’ apps have little chance of being discovered by mobile users let alone becoming popular.

Even so, the experience of many major hotel chains confirms that only a small percentage of their loyalty members download and actually use the chain’s mobile app.

Technological Boundaries between Mobile Apps and Mobile Browsing Are Disappearing:

With rapid advancements in mobile technology, the lines between mobile apps and mobile websites are disappearing. Newer, more sophisticated mobile devices, mobile operating systems and mobile browsers have enhanced the quality of the mobile web browsing experience tremendously: touch screen user experience, GPS and LBS (location-based services) capability, HTML5 rich media, video and audio enhancements, data storage and interactive functionalities. In 2011 you will be able to create a mobile website that does everything that a specially-designed mobile app would do.

Cost:

A good hotel mobile app can cost $15,000 and up, based on custom design, functionality, interactivity, handling of heavy graphics, and even “sexiness.” In addition you need to develop separate apps for iPhone, Android, BlackBerry and Window Mobile. A hotel mobile website is a much cheaper endeavor – a 10-page mobile website should not cost more than $2, 500, including an integration of the mobile booking engine, Google maps, automated push of specials offers and events from the desktop website, etc.

Portability:

A well-developed mobile website is by default a cross-platform entity that can be viewed on all platforms capable of browsing, such as iPhone, RIM (BlackBerry), Symbian, Google Android, Windows Mobile, etc. In contrast, a different app or a customized version of an app is needed for every major platform (i.e. an app for iPhone, an app for Blackberry, an app for Google Android, etc.). All of this greatly increases the cost of developing and maintaining the hotel mobile app.

Discoverability:

There are more than half a million apps in the Apple App Store alone. Hundreds of thousands of apps are available for Google Android, BlackBerry, and now Windows Mobile. How do you promote your new hotel app? You need a very well-defined strategy and special budget to promote your hotel app and break into the top list for your category (AdWhirl estimates $1,875 per day advertising budget can get you there; Pinch Media says the impact of being in the top 100 is a daily increase of 2.3x in the number of users).

A mobile website needs good mobile SEO and SEM (Search Engine Marketing) such as Google Mobile AdWords in order to reach potential customers looking for accommodations in your location.

Reach:

Mobile apps can be viewed only on smartphones, which comprise roughly 50% of the mobile device marketplace today. In other words, after you develop expensive apps for iPhone, BlackBerry and Google Android smartphones, you will be reaching only half of potential mobile customers. A cross-platform mobile website will reach 100% of Internet-enabled mobile devices.

Smartphone “Screen Saturation”:

The Mobile App Check has identified the most popular mobile apps and how they are used in the United States. Excluding Google Maps, Weather.com and web search apps, the rest of the Top 10 apps were in the social media, entertainment and gaming realms. Not even a single travel app made it into the Top 10 list. Where is Expedia’s app? Marriott’s app? Delta Airlines’ app? A hotel company, be it an independent or franchised hotel or resort, a small chain, or multi-property company, has no chance of creating an app that can squeeze through the mobile app clutter and find its way to the mobile user’s smartphone.

So What Should Hoteliers Do in 2012?

In 2012, independent or franchised hotels and resorts, as well as small- and mid-size hotel chains and multi-property hotel companies, should continue to focus on building and enhancing their mobile websites and launching mobile marketing initiatives such as mobile SEM, SEO, mobile-social media initiatives, interactive sweepstakes and contests.

The main focus should be on the following mobile marketing initiatives:

The Hotel Mobile Website:

Smart hoteliers already know that the mobile web adheres to different rules than the conventional desktop Internet. Mobile users have even shorter attention spans compared to traditional desktop users. They have less time to browse and are often on the go. The mobile web is characterized by a number of limiting factors, such as slower speeds, yet-to-be-perfected mobile browsers, smaller displays, limited data-input capability (e.g. the number of keywords that may be typed in a search), multi-step booking and information retrieval processes, etc.

In 2011, over 85.1 percent of desktop Internet users had a screen resolution of 1280x1024 pixels or higher. Trying to squeeze your wide-screen “desktop” hotel website onto the tiny screen of a mobile device is a futile exercise that inevitably destroys usability and conversion rates. Most of smartphone users view the hotel website via mobile screen resolutions ranging 240-320 pixels wide to 320-480 pixels high. The iPhone is 320 pixels wide by 480 pixels high. Accessing a “conventional” website of minimum 1280 x 1024 pixels or higher via a mobile device, even the latest iPhone, often results in an undesirable user experience: the inability to find information needed, and a predictable outcome of abandoned websites and reservations.

To solve this issue, hoteliers should offer a mobile website specially designed to provide an excellent user experience in a mobile environment.

Mobile users demand mobile sites that download quickly, provide short and concise textual content with no fluff, offer minimalistic visual content, and are built around navigation that is straight to the point. Efficient and simple navigation is of particular importance so people can easily find short descriptions of hotel amenities and services, maps and directions to the hotel, a toll-free phone for information and reservations, and an easy-to-use booking engine.

Here are the top required basic elements of a single property mobile site in 2012:

• Implement engaging, eye-catching & contemporary design and functionality
• Include content sections targeting your main customer segments: business travelers, leisure, meeting planners, wedding planners, catered events, etc.
• Include content sections describing the most important attributes of the hotel product: location, accommodations, dining, event facilities, etc.
• Include prominent ‘Book Now’ link to entice people to complete the booking on the mobile device
• Increase website “discoverability” via mobile SEO and mobile SEM (e.g. Google mobile AdWords) and online media initiatives
• Solicit sign-ups to the mobile opt-in list via the traditional hotel website and the mobile website, via hotel email marketing campaigns and various sweepstakes and contests, such as interactive scavenger hunts, QR Code promotions, etc.

Here are some enhanced elements of a single-property mobile website that go beyond the basics and should be implemented by hoteliers in 2012:

• Enhance the mobile user-experience via well-developed mobile site navigation, a mobile booking engine widget, mobile calendar of events, etc.
• Make the mobile website more interactive via mobile-social media initiatives, interactive sweepstakes and contests.
• Introduce live “push” of specials and events (at the property and the destination) from the desktop website to the mobile website, making it compatible with the recent Google Panda Update and its requirement for unique, engaging, location-specific content
• Introduce a content management system on your mobile site (Mobile CMS) to allow for constantly updatable “fresh” content, a crucial requirement by the recent Google Freshness Update
• Track conversions and user behavior via mobile analytics (e.g. Adobe Omniture Site Catalyst) and call analytics (phone tracking)

Hotel Mobile Marketing:

Having a hotel mobile website, developed according to industry’s best practices, is only the beginning. Similarly to the mobile website, the mobile web abides by different rules that require mobile web-specific marketing initiatives.

As consumers continue to embrace their phones for all types of activities, mobile devices play an increasingly important role in travel planning, hotel research and booking, especially in impulse and last minute bookings.

Mobile marketing has already become an integral part in hoteliers’ multi-channel digital marketing efforts. Its role has been growing exponentially over the past years. Here at HeBS Digital, we saw increases of 3-5 times in mobile bookings for many of our clients in 2011.

In 2012, from their overall digital marketing budget, hotels should spend 9%-10% on mobile marketing initiatives. Here are the top mobile marketing initiatives hoteliers should focus on in 2012:

• Mobile SEO
• Mobile link building to the mobile site from mobile directories and sites
• Mobile SEM (paid search) campaigns
• Mobile banner advertising in the main mobile feeder markets
• Mobile contests and sweepstakes
• Mobile promotions via SMS for local property deals:
- Generate buzz
- Grow mobile list
- Target customer segments
- Integrate with social media

Consider seeking advice from a leading mobile marketing and full-service hotel digital marketing firm to actively help you take advantage of the mobile channel one step at a time. Learn which mobile marketing formats make the most sense for your hotel and how to implement latest trends and best practices in your mobile marketing efforts so you can realize respectable ROI and incremental revenue growth.

Max Starkov is Chief eBusiness Strategist at Hospitality eBusiness Strategies, Inc. in New York City. He advises companies in the Travel and Hospitality verticals on their eBusiness and eDistribution strategies. Max has teamed up with HVS International Technology Strategies to provide eDistribution strategy consulting services to the hospitality industry. Max also teaches a graduate course on "Hospitality/Tourism eDistribution Systems" at New York University. Mr. Starkov can be contacted at 212-752-8186 or max@hospitalityebusiness.com Extended Bio...

HotelExecutive.com retains the copyright to the articles published in the Hotel Business Review. Articles cannot be republished without prior written consent by HotelExecutive.com.