Mobile to Influence 9 out of 10 airline and hotel bookings by 2022: Facebook-KPMG Report

Until a few years back, the most common way for Indians to book their tickets used to be via travel agents, mostly based on references from close friends and family. Cut to 2018, and you find out that Indians have become the world’s most digital-savvy travellers with travel websites accounting for more than 33% of India’s digital population. They want their travel, planning, and payment options ‘now’, and don’t want to experience any ‘friction’—any extra effort – that can lead to them abandoning their travel plans midway. With easy accessibility to the Internet and so many choices, customers’ attention-spans are declining fast. It is imperative for brands to understand what the reasons are that lead to a dropout in the path for buying airline tickets and booking hotel rooms, aka friction. As per a report commissioned by Facebook, authored by KPMG and Nielsen, titled- ‘Eliminating Friction in Travel Path to Purchase’- almost 50% of the total friction in the travel segment is caused by media.  Buying an airline ticket is a very personal choice for customers. Their level of involvement is high here. Friction occurs during the three main stages of the purchase journey – awareness, consideration and intent. Over 80% of friction is caused at the top of the funnel between the awareness and consideration stages. Almost 50% of that friction is caused due to media.  The situation is pretty much the same in the hotel journey as well. Nearly three-fourths of the friction at the intent stage can be attributed to the media. Overall, media friction accounts for nearly half of the total friction in the hotel booking journey.  People are spending more time on their mobile phones as they are getting used to living their lives digitally. They are getting more influenced by mobile, there is less friction on mobile because messaging is clearer. The average customer journey also becomes a lot more compact on mobile. When consumers go the digital route to book their airline tickets, their purchasing-journeys are almost 24% shorter. Mobile internet users in India are expected to increase to 677 million by 2022 from 420 million users in 2017. More than 4 out of 5 airline bookings in 2022 are expected to be mobile-influenced, while nearly 2 out of 5 airline bookings in 2022 are expected to be Facebook-influenced, says the report. Brands have a $19 billion opportunity to rethink their marketing strategies and to ensure that mobile plays an important role in it.  When it comes to hotel bookings, mobile reduces the purchase journey by 19%. It reduces friction by 11 percentage points. Nearly 90 per cent of hotel bookings in 2022 are expected to be mobile-influenced, while nearly half of the hotel bookings in 2022 are expected to be Facebook-influenced. Brands have a $12 billion opportunity in this space if they re-look their marketing mix to up their mobile game. Some key findings from the report:

1. Nearly 70% of men are impacted by friction at the top of the funnel for both airline and hotel bookings. Most men believe that offer communication shared by the brands are either not clear or don’t capture sufficient details.
2. Women seek more information and assistance as they are likely to ignore advertisements on offline mediums such as print and radio.
3. When it comes to hotel bookings, most women exit the purchase cycle at the last stage due to lack of credible advice, insufficient information, unclear payment terms and offer communication.

Mobile has the potential to reduce media friction by 2 and 3 percentage points for airline and hotels respectively, in the purchasing journey. Focusing more on mobile can help brands tap into an $11 billion sales opportunity and reduce average CPA (cost per acquisition) by 30% and 15% for the airline and hotel category, respectively. Brands can use several methods to integrate mobile into the purchase journey. Today, they can target customers according to their choices: Backpackers, budget travellers, families or luxury travellers. Travel companies can design and customise creatives according to the customer preferences. It’s possible to target customers according to the time they are most active on their mobile phones. And finally, companies target customers right where they are: On their phones and in their pockets. Real-time information on travel destinations to help travellers make informed choices, using AR/VR to help consumers virtually explore hotel/airlines before booking, customising offers and discounts based on consumer habits, and experience stores helping consumers explore aircraft features, travel location topography are some features that come to mind.  Marketers need to re-strategise their media mix and optimize mobile for the same. It’s important for brands to develop a full funnel approach that reduces friction in the purchase journey for consumers. Investment in the travel and tourism sector is expected to rise 6.7 per cent per annum from $41. 6 billion in 2017 to $57.5 billion in 2022. If travel brands want to make the most of it and unlock new sources of revenue they have to go big on mobile. It’s a no-brainer. Check out the complete Zero Friction Future report on travel path to purchase here. This is a partnered post.