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Anyone who has used a smartphone to book a holiday is familiar with the host of product and feature innovations and exclusive app-only offers. Walks, history tours, special discounts on shows and events, hotel deals and guides that offer a tantalising glimpse of the destination, you name it and you can have it. As more and more people use a phone to click and travel, online travel agents or companies (OTA) are falling over their apps, stacking them with deals and exclusive offers.
Mobile travel gross bookings in India nearly tripled between 2012 and 2013, rising from $110 million to $305 million. PhocusWright, travel research firm, says that mobile will be the fastest growing online channel; bookings will quintuple by 2016 to reach $1.6 billion. Though mobile share of India's online market - at 13 per cent in 2016 - will still trail that of the U.S. and Europe; it holds out the maximum potential for growth in the sector.
Companies are listening. Goibibo has started photo reviews on its app. Travellers, known to be trigger happy when it comes shooting with their mobiles, are being encouraged to post real-time experiential content. "We are seeing a good repeat buying trend. We also have a referral programme where users get a credit amount on app download by their friends," said Goibibo CEO Sanjay Bhasin. The potential of such user-generated content is phenomenal. It could well be used at a later date to pitch a new destination to buyers of the same kind, to understand the user better and sell her new deals.
Over the last couple of years OTAs have followed two clear strategies. One is to increase the share of high margin hotel business (air ticketing accounts for 60-70 percent of portals' revenue). The other is to drive business through mobiles by offering customised experience to the user. "Close to 45 per cent of Expedia India's business comes through the mobile app, out of that 70 per cent is flight booking," said Vikram Malhi, Managing Director-Asia, Expedia.
Travel companies plugged into the mobile world sometime in 2011. Today MakeMyTrip, the largest online portal in India, says 24 per cent of all its online transactions are through the mobile channel (mobile-based website or an app). It adds that mobile transaction growth for domestic booking transactions, at 38 per cent, has been the fastest. In 2013, it used to account for just 10 per cent of these bookings. MakeMyTrip and Cleartrip have also seen a four-fold increase in downloads in the last year, the companies said.
"Mobile will continue to drive growth as it is slated to eclipse booking through other devices," said Mohit Gupta, chief operating officer-online of MakeMyTrip. Yatra said 30 per cent of its bookings take place in this fashion. For Cleartrip mobile platforms account for 40 per cent of all its transactions and for Goibibo it is 40-45 percent. "Over 70 per cent of our mobile customers are now using mobile as their only channel for transactions", says Subramanya Sharma, chief marketing officer of Cleartrip.
Will that lead to travel companies switching over to an app-only model? "Having reached a certain scale and maturity it is natural for online travel portals to look for growth opportunities and mobile offers them that platform. While e-tailers like Flipkart and Myntra have switched to an app-only strategy, we feel OTAs will continue to have an omnichannel presence and not restrict sale only through apps," said Chetan Kapoor, research analyst, Phocuswright. Critics also point out that most of the app users are desktop users who have switched to a more convenient medium.
Gupta however argues that "there is significant speed and on-the-go convenience offered by mobile apps to induce people to make the switch from desktop to web. Besides the unique nature of internet penetration in India has resulted in many people, especially young people, first accessing the internet via a mobile device."
Mobile downloads are heavy in metros and Sharat Dhall, president of Yatra.com says "in cities such as Pune, Jaipur, Chandigarh, Indore and Gurgaon." Apps are helping e-commerce companies keep customers hooked to their booking engine and allowing them to drive business through push notifications and special offers. But the challenge will be to retain existing customers and add new ones.
According to industry expert Ratul Ghosh, "the challenges are to get first timers to discover and download the app and maintain continuous engagement." Engagement is crucial as users can uninstall the app as soon as they find a friendlier or more discount laden option.
It is not the online travel portals alone that are chasing download loyalties. Several other holiday cum travel companies are trying to do the same. "iXigo and HolidayIQ are betting big on mobile apps which are helping influence all parts of the travel experience. Many companies are leveraging big data analytics to rethink the mobile and tablet travelling experiences" says Sandeep Ladda, India Technology leader, PwC.
It is possible, perhaps, that the near future may see increased collaborations between the various segments of the travel business - as OTAs turn holiday advisors and vice versa. The journey has just begun.
