Home Revenue Management Revenue Management Is Your Hotel’s Revenue Management Strategy ‘Mobile-Compatible’?

Is Your Hotel’s Revenue Management Strategy ‘Mobile-Compatible’?

Mar 25, 2014  By 

If you have read any hotel trade publications, listened to the news or watched the average consumer book a vacation in the past year, you may already know about mobile commerce (or mCommerce). Just like the name implies, mCommerce is any purchase made via mobile device, including smartphones or tablets. While m-commerce used to be used primarily by tech-savvy Millenials, it has now gone mainstream across all industries: “mCommerce constitutes $41.68 billion of the total $262.3 billion of [retail] ecommerce sales for 2013 (an increase of 68.2% from 2012) and accounts for 16% of total ecommerce sales.”[i]

Just like every other retail industry, mobile travel bookings are becoming more and more popular with all age groups and demographics. In fact, Booking.com recently reported: “mobile transactions at Booking.com surged by 260% in 2013“. And based on the statistics, the percentage of travelers who choose to use mobile channels to book will only increase exponentially over the coming years. A recent PhoCusWright report showed that “mobile travel bookings will more than triple over the next two years, to reach $39.5 billion by 2015, this is about 25% of total online travel market.”[ii]

What is fueling this increase in mobile bookings in the travel industry? There are a few main factors that come into play:

Improvements in mobile technology

First there was the iPhone, then the iPad and now, the phablet (phone + tablet). Obviously, the ongoing improvements in mobile device technology have a strong impact on the usage of mobile booking channels. The more sophisticated the technology gets (and the bigger the screen), the more that mobile devices are replacing desktop (and other non-portable) technology.

As well as being more user-friendly, mobile technology has become much less expensive. With the introduction of Apple’s less expensive iPhone 5C, sophisticated smartphone technology became accessible to all, which will have a significant effect on the usage of mobile devices in booking travel.

Consumers booking habits and comfort with technology

As more people across all demographics become comfortable with the various types of mobile technology, the number of people who book via mobile will increase. Also, because some users may experience faster Internet speeds on their cell phone (via LTG/4G speeds) than they do on WiFi, many users choose to book via mobile – even when they do have a computer and WiFi connection available.

Improvements in website technology

In the past, companies had limited options in regards to offering mobile booking options. Both apps and mobile sites were cost-prohibitive and time-consuming to implement, meaning that few travel companies bothered to implement mobile-compatible options. But that is no longer the case. With responsive site design, the website will automatically readjust itself to the size of the screen (and device) that it is being viewed upon, ensuring that customers who visit the site from any device will always have a consistent user experience.

(Almost) Universal Access to Internet/WiFi

In most first-world countries, access to WiFi is almost universal – either through coffee shops, restaurants, shops, consumers’ homes, inflight (on the way to their destination) or public WiFi – making it easier for consumers book their hotel at the last-minute via mobile device. The more accessible the Internet, the more consumers will choose to book via mobile device.

Are you currently offering potential guests the ability to book via mobile?

If you aren’t, now is the time to start. As mentioned earlier, mobile bookings are now highly popular with many different demographics – not just the younger, tech-savvy ones. In fact, BI Intelligence released a report in late 2013 that proved that mobile bookers are a very attractive demographic for travel companies:

  • - “Consumers who use their mobile devices for travel-related services tend to have higher than average incomes: one-third of mobile travelers earn over $100,000 annually. Twelve percent make over $150,000.”[iii]
  • - “Business travelers are more likely to… book their travel on mobile (32% do so now).”[iV]

As you can see, offering a mobile booking channel (be it a mobile-friendly website or an app), is a very good business decision, as it helps to you to reach a valuable demographic. But in order to see the best possible results (in terms of increased revenue), your revenue management strategy has to be “mobile-compatible” as well.

A “mobile-compatible” revenue management strategy is one that uses automated revenue management technology to collect, analyze, price and update a property’s room rates, as market factors, inventory, etc. change. Today, mCommerce is often used for last-minute bookings; in fact, a 2014 Hotwire survey showed that “80% of Hotwire’s bookings on a mobile phone and 70% on a tablet are made at the last minute (the day before or day of arrival)”.[v] In order for your rooms to become visible to these last-minute bookers, your rates must be up-to-date and highly competitive until the very last second – or else your competition will secure the booking instead of your property.

About Jean Francois Mourier

Jean Francois Mourier

Jean Francois Mourier arrived in South Florida in 2003 after a successful and distinguished career in Europe as a trader, financial analyst and director for a number of top firms including Merrill Lynch, ING Barings and others. He joined

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