Expedia, TripAdvisor Benefit From Growing Mobile Bookings

Keeping up with the explosion of mobile usage has been a key goal for travel businesses in recent years as people increasingly turn to smartphones and tablets for travel information and booking. But what are they actually seeing on the ground?

Recent earnings reports from Expedia and TripAdvisor this week provided insights into how mobile is growing as a portion of their business, how people are using different mobile platforms and how mobile compares to the desktop.

Expedia, the largest U.S. online travel agency, which had revenue of $1.5 billion in revenue in the second quarter, highlighted the growing role of mobile in its business. Company CEO Dara Khosrowshahi said mobile bookings make up more than 20% of bookings, and it continues to grow “much, much faster than desktop.” Given, mobile is starting off a smaller base, that’s not so surprising.

He suggested much of that mobile business is coming through the iPhone and iPad, as people are downloading the Expedia app much more on iOS than Android devices. “I’d say we’re very, very good on the iOS side. I think we can get better at Android,” said Khosrowshahi, on the company’s earnings conference call Thursday.

Overall, conversation rates on mobile still trail those on the desktop. The same goes for time spent. “So a mobile click, so to speak, in general is worth less to us than a desktop click. But we're very -- we're working very, very hard to build conversion and to increase our ability to pay for those mobile clicks on a global basis,” the CEO said.

Expedia is also benefiting from the increasing adoption of smartphones globally, with app downloads growing fast in particular in China. Overall, the company has reached 150 million downloads across its brands, which include Hotels.com, Travelocity, and Hotwire.

Travel review and metasearch site TripAdvisor, which reported earnings July 23, has also been pushing new mobile products. In June, it launched Instant Booking, a feature in its mobile app and Web site that lets people book hotel rooms through an online travel agency without leaving the TripAdvisor environment.

In the company’s earnings call, CEO Stephen Kaufer said TripAdvisor was pleased with early results from the program, but didn’t go into further details.

But in terms of broader mobile adoption, he said smartphone and tablet downloads had reached 128 million, with nearly half its traffic coming from mobile devices in the quarter. And average monthly unique visitors on mobile devices climbed 78.5% from a year ago to 141 million.

TripAdvisor reiterated in its second-quarter filing with the SEC that users on smartphones monetize at less than 20% the rate on the desktop, while tablets are closer to being on par with PCs. The challenge for TripAdvisor and other travel companies is closing the gap between conversion rates on devices, especially smartphones, and the rise in mobile adoption by customers.

But that isn’t stopping TripAdvisor from extending mobile capabilities to new areas. During the quarter, it acquired Lafourchette, an online and mobile platform for restaurant reservations in France, Spain and Switzerland. The service includes special offers on the desktop and mobile Web, and soon coming to TripAdvisor.

“Mobile growth and development remains a key strategy, and we will continue to invest and innovate in this growing platform to help us maintain and grow our user base, engagement and monetization over the long term,” stated TripAdvisor in its quarterly filing.

Similarly, Expedia said in its Q2 filing that mobile is likely to represent “an efficient marketing channel” given the opportunity for direct traffic acquisitions, and increase in share of wallet, and in repeat business, especially through applications.

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