Consumers' path of purchasing a travel product

Hotels have been working hard to win more travelers to "book direct" on their companies' websites, but are consumers listening?

In fact, hotels are not alone. All service providers in the hospitality and tourism industry want their customers to make purchases directly on their websites, but consumers want to search and compare various options before making a decision.

So, to convince customers to purchase directly on the service providers' websites, companies must understand where their customers "hang out" in the cyber marketplace before they make the purchasing decision, as well as where they end up buying their services.

The white paper "Understanding the Travel Consumer's Path to Purchase" by Eye for Travel provides some business intelligence in that regard. The report combined a large panel consumer data of online transactions and surveys into the analysis, revealing the following results:

The places where customers purchase a travel product

With an analysis of about 200,000 bookings in the U.K. and the U.S., online travel agents (OTAs) such as Expedia and Priceline are winning big in the competition.

In the U.S. market, 42 percent of purchases came from OTAs, leaving 39 percent for airline brands and 19 percent for hotel brands. In the U.K. market, 73 percent of purchases came from OTAs, 23 percent from airline brands and only 4 percent from hotel brands.

The devices used for buying the travel product

Devices being used for hotel reservations:

• Desktop or laptop (49.9 percent from the U.K. sample / 62.1 percent from the German sample)
• Face-to-face (6.1 percent / 11 percent)
• Tablet browser (17.3 percent / 5.5 percent)

Devices being used for flight bookings:

• Desktop or laptop (51 percent from the U.K. sample / 56.1 percent from the German sample)
• Face-to-face (9.3 percent / 20.1 percent)
• Tablet browser (15.2 percent / 4.4 percent)

Desktops or laptops remain the most-used devices for making a purchase, and desktops have higher conversion rates for all OTAs, all airline brands and all hotel brands than mobile devices. But before consumers make a purchase, let's also check out ...

The devices used for browsing before making a purchase

• 80.7 percent of those who used desktops or laptops to search also used the same device to book.
• 63.8 percent of those who used tablets to search also used tablets to book; 21.3 percent of those who used tablets to search ended up using desktops or laptops to book.
• 36.2 percent of those who used smartphones to search would use desktops or laptops to book; about the same percentage, 35.1 percent, of those who used smartphones to search also used smartphones to book.

The websites visited before making a purchase

For a purchase on OTAs, about 90 percent used search engines, about 75 percent visited the OTA site prior to conversion, and about 25 percent visited the competitor OTA sites prior to conversion.

For a purchase on an airline website: about 90 percent visited search engines, between 69 and 84 percent visited the airline website prior to conversion (across three samples of the U.S., the U.K., and Germany). Depending on the regions of where the customers came from, over 20 percent also visited a social media site such as Facebook or Twitter (U.S.), a meta-search site such as Kayak or Trivago (U.K.), or an OTA site (U.K. and Germany).

For a purchase on a hotel website: about 90 percent used search engines, about 70 percent visited the hotel website prior to conversion, and about 20 percent visited an OTA site.

Where do smartphones fit in?

It seems smartphones played a more significant role in both the researching and purchasing processes for consumers in less developed countries than those in developed countries. For example, 66 percent of Indians accessed travel websites with mobile devices, but only 34 percent of them used desktops. In the U.S., such percentages changed to 54 percent for using mobile devices and 46 percent for using desktops.

Not surprisingly, a large percentage of consumers aged between 18 and 34 owned at least one smartphone. For example, 85 percent of Chinese aged between 18 and 34 owned at least one smartphone, but only 43 percent of Chinese aged 35 or above used smartphones.

Another good example came from the U.K. consumers aged between 18 and 35. When asked if they researched and/or booked air travel on a smartphone in the past, over 90 percent of participants said so. Specifically,

• 23.4 percent always booked flights on a smartphone.
• 22.9 percent regularly booked flights on a smartphone.
• 21.8 percent occasionally booked flights on a smartphone.
• 22.1 percent researched flight information using a smartphone even though they did not book with a smartphone.

What are the next big things?

The top two "game-changing" factors in the industry were mentioned:

• Data-driven personalization (78 percent of participants being surveyed)
• API-led (application programming interface) distribution partnership (14 percent)

The top three areas for future opportunities include:

• Mobile (79 percent from European respondents / 74.7 percent from North American respondents)
• Content and digital marketing (58.8 percent / 65.3 percent)
• Social media (35.3 percent / 50 percent)

Other possibilities or opportunities may include:

• Will search engines become the next big player in selling travel products? Many consumers have already been using search engines to research products, so why can't Google Travel or Bing Travel become the next big thing?
• Can Facebook get into the game, too? Facebook has tried to let its users make purchases on a business's page, rate a business or service and make recommendations of purchases for their friends. Most of all, the hospitality and tourism industry is too big to be ignored.
• Will Apple try Apple Travel, too? At least, Apple can easily reach all the Apple users.
• Will WeChat dominate the Chinese marketing in selling travel products? I tried to make hotel reservations on WeChat because I could not find good internet connections when I was traveling in mainland China, and WeChat became very handy.

Now, do you have a better idea of where travel or hospitality companies can reach their target customers in the cyber marketplace? Tell us what else you want to know. Your voice could inspire the next big research project.

This post was also published on MultiBriefs Exclusive, the leading source for targeted, industry-specific news briefs.  

Can hotels stop the growth of Airbnb?

As a substitute for the traditional lodging facilities, including hotels, hostels and short-term rentals, the increasing supply of Airbnb properties is no doubt making an impact on hotels' bottom lines. So, can hotels stop the growth of Airbnb? 

Hotels' strategies for fighting against Airbnb

#Airbnb #Hotels #Competition - http://bit.ly/kwok051117 

Hotels are working hard to fight against the competition from Airbnb, other room-sharing websites and online travel agents (OTAs). For example:

• Hotels are encouraging travelers to search and make reservations directly on the hotels' websites by offering special discounts if they book directly, even though this strategy might possibly push Airbnb and OTAs to work closely together against hotels.
• Hotels are reinventing loyalty programs to win more new travelers and, at the same time, keep their repeat customers.
• More hotels are adding local flavors to lure travelers. If travelers choose Airbnb over hotels because they want to gain some unique experience as a local resident, this strategy may work particularly well.
• Hotels are responding to the shifting needs of customers by introducing new brands and through acquisitions. The merger of Marriott and Starwood is a good example.
• Most recently, hotels are planning for a lobbying push over the Priceline-Expedia "monopoly," in addition to the legislation push toward Airbnb. Hotels want to play a "fair" game in the competition with Airbnb and OTAs. So far, hotels have successfully convinced legislators to impose stricter regulations on room-sharing operators in several locations, including San Francisco, Vancouver, Amsterdam, and London.

Challenges that Airbnb faces

Despite Airbnb's phenomenal growth since its inception in August 2008, the company is facing more challenges lately.

On one hand, hotels are gaining more success in combating Airbnb. For example, New York City just passed a new regulation, charging steep fines to those Airbnb hosts who break local housing rules, resulting in fewer qualified listings in the market. Airbnb is also more willing to work with local governments to collect taxes on room-sharing rentals, now at the same rate as the one for hotels. On the other hand, Airbnb is facing allegations for the hosts' racial discrimination against renters.

The question is: Will those challenges slow down Airbnb's growth?

Airbnb's strategies for growth

Airbnb wants to become more than just a leading room-sharing platform in the market, as suggested in the following moves taken by Airbnb recently:

• Airbnb acquired a couple of travel service companies, including Luxury Retreats and Tilt, as the company is getting ready to become a full-service travel company.
• Airbnb wants business travelers, too. Not only has the company launched a website that tailors to business travelers, but they also work closely with the hosts to ensure the listings meet business travelers' needs. The most recent move Airbnb took was to introduce new booking tools that were specifically designed for business travelers.
• Airbnb is working on a gadget that will provide travelers with reliable internet connections during their trip. For business travelers as well as those young leisure travelers, stable WiFi connections have become a must-have amenity for their stays.

Competition between Airbnb and hotels

It is unlikely that anyone can stop the growth of Airbnb. The competition between Airbnb and hotels is only going to get tougher.

Can you predict what the next moves for hotels or Airbnb might be? What suggestions would you make to hotels or Airbnb to win the battle?

* This discussion was first published at Multibriefs.com.

Let's imagine how hotels and restaurants are run in smart cities

We have seen more robots and machines are replacing humans in the service sector. This trend is irreversible, but the good news is there are ways to cope with such changes at work.

What if these changes also take place in the macro level? Then, what can businesses do to embrace this wave of innovations?

Indeed, the cities where we live have also become "smarter" than ever. According to The Wall Street Journal, more cities are now using different types of data to make people's living safer and healthier and the cities' operations more efficient.

The rise of smart cities

Boston

The city works with Waze, a navigation app from Google, to improve traffic conditions. Officials are able to respond to traffic problems, such as a double-parked truck or a fender-bender more quickly.

Chicago

The Department of Innovation and Technology developed an algorithm to predict the risk of a restaurant for spreading food-borne illnesses. The algorithm uses 11 variables in prediction, including a restaurant's past record of violations, length of operations, the weather condition, nearby burglaries, etc.

The data was used to inform the Department of Public Health for restaurant health inspections. The results? Since the program's initiation in 2015, it takes seven fewer days before inspectors visit restaurants with possible critical violations; 15 percent more critical violations are also reported.

Los Angeles

Mobile data is used to help clean up the city's 22,000 miles of streets and alleyways. The city uses video and smartphones to collect data about illegal dumping, abandoned bulky items and other trash problems. The streets are labeled with three categories: being clean, somewhat clean and not clean. This program has resulted in an 80 percent reduction in the number of streets categorized as "not clean."

New Orleans

The city of New Orleans put three data sets together to help prevent deaths in fires, including:

• homes without smoke detectors (from Census Bureau surveys)
• homes at the greatest risk for fire fatalities, such as those with elderly and young children (from Census Bureau surveys)
• neighborhoods with a history of house fires

With the aid of machine-learning technique, the city analyzed the data and identified the blocks where fire deaths were most likely to occur. Then, the fire department was able to target high-risk neighborhoods when distributing smoke detectors. Since early 2015, the department has installed 18,000 smoke detectors, as compared to installing 800 detectors per year under the old program.

How effective is it? A few months after the program began, three families (11 people in total) were alerted by the recently installed smoke detectors about a fire, and the firefighters were able to quickly respond to the incident.

#SmartCity #Technology #Trend #Trends #Hospitality #Hotel #Restaurant

Let's imagine how restaurants and hotels can be run inside a smart city

Here are my thoughts: 

• Restaurants and hotels can share their availability with the city, allowing people to easily locate the restaurants or hotels with empty seats or rooms.
• Historic data of traffic, including foot traffic, can be used to predict sales, allowing restaurants and hotels to better manage employees' work schedules.
• Restaurants and hotels will be able to get extra help even in the last minute when the city suddenly observes increasing traffic, possibly through the standby part-timers in the city's database.
• Restaurants using automated services, such as coffee shops with robot baristas and self-service facilities with no hosts, no servers and no tables, can be built on the street with fast foot traffic.
• New lodging products can be invented, where customer service will be provided in a remote mobile service center. Travelers can reserve and check into a hotel room with their mobile device, use their mobile device as a room key to get into the hotel room, have items delivered to their room with a robot, and check out with their mobile device. These hotels only need to hire staff to clean the rooms after the guests check out, in addition to the staff members working in the mobile service center.
• Restaurants and hotels that provide customer service with humans can still be found inside the city, but possibly limited to some specific areas, with slower foot traffic and/or a lower turnaround rate.

What are your thoughts? 

*The original and full-length of this discussion was firstly published on MultiBriefs.com.