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Mobile Commerce Driving Revenue Growth in the Hotel Industry

Nairobi, 11th May 2016

Mobile bookings accounted for an impressive average of 49% globally, while apps seem to be a big hit with the convenience-driven market.

Mobile accounts for most of the overall growth in travel bookings since 2014, this is according to Criteo, a leading market research firm. The worldwide research, carried between Q2 2014 and Q2 2015 indicates an increase from 12% to 23% of bookings made via mobile devices.

Although the report does not delve on absolute drivers, the rise of m-commerce, development and adoption of apps in the online hotel booking sector and related services (such as car rentals and flight bookings) showed a remarkable growth at 49% from a previously recorded 12% in 2014. A further look at consumer trends reveals that smartphones account for a remarkable 47% of same-day hotel bookings, while tablets take up 11 percent of the same.

In an interesting twist, short-stay customers seem to be satisfied with doing their pre-journey research on mobile, while longer-stay guests opt to do their prep up research on desktops.

The above findings are collaborated by a study by Jovago.com, an African focused online hotel booking company which recorded an impressive growth on mobile bookings; from 10% in Q1 2014 to an average of over 60% in Q2 -2016.

This growth can be rightfully credited to availability of complete and more accessible platforms especially in terms of apps; which according to the research by Criteo are generating about 49% of all mobile bookings globally, up from just 12% a year ago. This definitely translates to a need for providers to invest more in in-app advertising and proper tracking in order to meet their market base and target customers in their most ‘comfortable’ zone.

Globally, mobile users appeared to prefer certain devices for certain bookings; tablets were seen to generate more bookings for the air packages category as compared to smartphones, while the vice versa happened with hotels. Also, the number of smartphone bookings were observed to significantly rise over weekends, prompting a need for providers to push last minute offers towards smartphone users as opposed to other mobile devices. Japan, among major markets, however takes exception to this finding, with its average booking values equal across all devices.

Commenting on the findings, Estelle Verdier, Managing Director for Jovago East and Southern Africa observed ‘an interesting trend in the way the digital-age customer wants to be served; customers are more likely to choose convenience over other factors, with a major fraction drawn to platforms that offer a complete buying process‘.

This she further explained, goes beyond the ability to view and review the product under one click, to various point of sale components such as price comparison, room for customization, mobile payment options, friendly interface and available and prompt online response by customer service.

According to New York’s leading online market research company, eMarketer, inexpensive smartphones are opening new opportunities for marketing and commerce in emerging markets where customers had no previous access to internet. Further data indicates a steady growth in the smartphone ownership, with numbers predicted to surpass the 2 billion mark by the end of 2016.

Statistics by International Telecommunications Union (ITU) project the proportion of households with Internet access to reach 56% by 2020, thereby exceeding the Connect 2020 target of 55% globally.

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