The natural affinity between travel and mobile technology has long meant big expectations for the sector's expansion to mobile platforms. The surge in smartphone ownership in the last two years -- nearly half of U.S. mobile users are now estimated to have smartphones -- would seem to provide the launchpad for that growth.
Indeed, a new eMarketer study projects that 36.4 million Americans will research travel on smartphones this year before doubling to about 72 million by 2016. But the report predicts the level of actual travel bookings will significantly lag the research activity. The number of people who book travel on smartphones is projected to grow from 15.8 million in 2012 to 36 million in 2016 -- remaining at half the total of those who research travel.
What's holding back more transactions? There are several factors, according to the report, starting with user concerns about the security of mobile purchases. While m-commerce has become more common, people are still wary about entering credit or debit card numbers into their phones, especially for larger purchases.
There's also the challenge of doing travel research, which often involves scrolling through lists of options and viewing photos or videos on a small screen. People generally prefer to do that on a desktop, laptop or even a tablet because of the larger form factor. Many travel sites are also still not optimized for mobile phones, creating an additional barrier to travel planning via smartphone.
The involved process of planning a trip itself works against mobile. "Because travel purchases tend to have multiple interconnected parts, a pre-planned, multichannel travel purchase process will possibly include some research through a smartphone, but most likely will result ultimately in an online or offline booking," wrote Dan Marcec, an eMarketer analyst and author of "The Mobile Traveler" report.
Where smartphones come in handy is for last-minute bookings. Both Orbitz and Travelocity have reported that more than 60% of hotel bookings made on mobile phones were for the same day. The same goes for half the bookings on Expedia's Hotels app. Still, that's a niche limited mostly to economy hotels.
Beyond travel planning and booking, the report also looks at the role of mobile in transit and once people reach their destinations. This is where smartphones come into their own, serving as digital Swiss Army Knives for travelers eager for information about their flights, car rentals, nearby restaurants, and checking into hotels. All that activity opens up new opportunities for travel marketers.
Almost all travelers take their mobile devices with them, and 80% said they used them all the time while away, according to a Mobile Insights study this year, cited by eMarketer. A separate TripAdvisor survey found that 44% of U.S. travelers planned to use their smartphone this year as a travel resource and almost half (47%) would use them once they reached their destination.
But eMarketer warned that travel companies trying to reach smartphone-toting travelers have to strike a balance between being helpful without becoming overbearing. Providing concierge-related services are a natural step for hotels. Through a partnership with Foursquare, for instance, the Ritz-Carlton has outfitted its app with content tailored to all 79 of its hotels and resorts worldwide.
Another luxury hotel operator, OPUS Hotels, has taken a different approach, giving guests at its Vancouver location pre-loaded iPhones in their rooms offering free local phone service so international visitors don't have to worry about roaming charges.
When it comes to airlines, the report suggested companies can use smartphones to build loyalty among customers in-transit. One example is a partnership Lufthansa formed with Foursquare through its Blue Legends app, which lets users virtually “check in” to airports, lounges and the airline's flights to share and get information about their trip.
But so far, most airlines aren't taking capitalizing on smartphones to offer ancillary services to customers on-the-go. A survey of senior executives at top carriers earlier this year showed only about a quarter of their companies offered additional traveler services through the mobile Web or apps. However, 83% of them planned to do so by 2015.