by WEX Travel
It comes down to opportunities: where to find them, which ones to chase and which ones follow. Airlines across the board are pursuing mobile strategies in different ways. While some lead the pack and others are taking more of a “wait and see” approach, they’re all in the game. Having a mobile strategy is practically non-negotiable – just ask the average travel consumer.
Or, consider how quickly things have changed in the world of mobile.
A Historical Perspective
Way back in 2010, Cisco saw it coming. In their report, Airline of the Future: Smart Mobility Strategies that Will Transform the Industry, they noted the intense competitive pressure on legacy carriers to consider innovative and more tech-driven service opportunities and business models. They saw that a “massive shift in mobile adoption” was underway, making the development of a mobile strategy a really good idea.
It’s almost amusing, sitting in 2017, to read Cisco’s (spot-on) assessment that “the overall percentage of passengers using their smartphones to access travel information or perform sophisticated transactions is still relatively small.” They cite 2009 Forrester Research data indicating that only 10-15% of travelers used their smartphones to look up addresses, directions, flight schedules, and hotel room availability.
It’s a Mobile Marketplace
Fast forward to 2017, when mobile devices are everywhere and used for just about every travel activity under the sun. An Infographic from Opera Mediaworks shows that mobile is now “#1” for travel research and booking, with 70% of Millennials preferring their smartphones for research and 85% using a mobile device to book travel activities. Let’s go ahead and consider 2017 to be a mobile marketplace.
See Build a Mobile Booking Site that Customers Will Use for more.
It’s a Global Marketplace
Phocuswright predicted that by 2017, roughly one quarter of online gross bookings in the US and Europe and more than one third in APAC will happen on a mobile device. And 60% of 2017 gross travel bookings in China will be made on mobile devices. Emerging markets are helping push mobile booking ubiquity, and airlines need to take note of this if they want to capture market share.
In many emerging markets, mobile is the preferred way to pay. A post on Financemagnates.com explains the relevance of emerging marketplaces this way: “eCommerce has expanded into new markets on the back of internet availability and the increasing popularity of mobile devices has helped introduce hundreds of millions of new consumers to the wonders of online retail and international commerce.” And this most certainly includes the wonders of travel, international or domestic. Dig deeper in Around the World in Travel Trends: International Booking Preferences.
It’s a Competitive Marketplace
OTAs have been investing heavily in the mobile channel to capture sales from this growing realm, but what about airlines enabling direct bookings? They have a big opportunity with loyalty programs, offering customers special deals or perks for booking direct and even using their mobile app to do so. Visit Luxurydaily.com to find out how many industry players are making it possible for passengers to store and use miles or rewards balances in their mobile wallets.
And The Revenue Connection Between Mobile Booking and Loyalty piece in MobilePaymentsToday.com points out that “last-minute offerings and geo-location services in the mobile channel can help airlines increase yields and drive more revenues by making it as easy as possible for passengers to find, book and pay for their flights directly from their smartphones.” Offering a full-range of mobile tools is a way to set its services apart from the pack’s and even away from third-parties.
An Airline Battle Plan
The Three-P Approach to Airline Success in 2017: Passengers, Payments and Profitability from Cell Point Mobile provides air carriers and other travel companies with many reasons to pursue a mobile strategy sooner than later. Here’s the gist of their 3 Ps:
- Passengers - Airlines must embed 24/7 communications, transactions and payments into their passengers' mobile devices if they hope to capture not only their brand loyalty but also the revenues they create as they travel.
- Payments - Airlines' growth strategies must include operational integration and deployment of these new mobile payment methods if they hope to capture revenues from a payments ecosystem that is transitioning from credit/debit payments and cash to the mobile environment.
- Profitability – Airlines can profit from a variety of mobile-enabled revenue streams, including ancillary products and services, direct-channel sales from airline websites and apps, day-of-travel purchases and upgrades, geolocation, and digital marketing campaigns, loyalty program transactions, and others. They pose the question, “What fraction of the estimated 10% average yearly growth in digital travel sales between 2017-2020 will airlines capture?”
An Example to Follow
Need some real-world inspiration? Emirates Airline is among the carriers leading the charge. As explained in Emirates Airline Takes Mobile Strategy To New Heights, they promoted their now-daily NYC to Dubai route by showcasing everything its A380 aircraft had to offer. How did they go after this opportunity? The airline launched a huge marketing campaign—engaging video ads, rich media expandables and full-screen interstitials–-all designed specifically for mobile. Yes, mobile. Because they know that’s where their customers are tuning in.
For insights into other airborne tech innovations, read Business Class: Keeping Travelers Connected Onboard.