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Mobile Travel Agencies: Next Game-Changing Business Model in the Travel Industry?

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The shift from desktop to mobile internet access is having a significant impact on the travel industry making smartphones and tablets an important booking channel, as well as customer service tool. This technological shift is affecting travel companies, and online travel agencies in particular, resulting in the development of their mobile services and even of mobile travel agency (MTA) business models, which Euromonitor International was the first market intelligence firm to analyse.

The development of mobile travel services and of mobile travel agencies in the next few years is expected to result in a change, and possibly strengthening, of the role of online travel intermediaries, which will need to provide real time assistance to their customers and will expand their reach to the booking of further tourist services and activities.

Mobile Travel Agency Types

There are different types of online travel intermediaries which can be defined as mobile travel agencies. Firstly, there was the development of online travel agencies only active in the mobile channel and focusing on last minute reservations at discounted rates. This type of mobile travel agency includes the American company Hotel Tonight and the Spanish company Blink, acquired by Groupon in 2013.

Mobile travel sales are especially significant in China where in Q1 2014 they accounted for 40% of the business of the largest OTAs, Ctrip and eLong. As a result, we are seeing the development of a second type of mobile travel agencies in China, with leading OTAs expecting mobile devices to become their main distribution channel in the next few years and therefore focusing on them in terms of investments on apps development and promotion.

However, we expect a third type of mobile travel agency to emerge next, which may prove the most successful, with the deepest impact on global travel distribution. This new business model will be the natural evolution of current online travel agencies, which in the next few years will be increasingly built around the central role of mobile devices and of consumers always being connected and reachable through them.

Mobile Internet Access Drives a Change in Travel Consumer Behaviour

The main change expected to take place in the evolution of online travel agencies into mobile travel agencies in the next few years is their increasingly important role beyond the time of the booking throughout the whole travel experience.

Always-connected travel consumers expect to receive customer service, and also the opportunity to make additional bookings, not only before the trip but also during the trip.

According to Brett Keller, Chief Marketing Officer at Priceline, “Mobile is not just for emergencies anymore, it’s for everyday travel. People have literally changed their purchase behaviour over the last three or four years.” “For travel more than I think almost any product or service out there, we have to be available to users.”

The New Mobile Travel Agency Business Model

To respond to this change in consumer behaviour, online travel agencies will need to evolve into a new MTA business model, which will see them as constantly reachable from consumers on-the-go to provide assistance, additional services and additional booking options.

New services will include the possibility to make bookings not only through smartphones and tablets but also through wearable electronics, connected cars and in-flight screens. Other services which will be increasingly provided by travel companies to consumers on-the-go will include: personalised offers based on their profiles, convenient payment options, directions to get to the hotel when at destination, mobile check in and check out, mobile concierge services, room choice, mobile devices to be used as room keys, information on and reservation of local activities, reservation of additional hotel rooms and nights and of other tourist services such as meals and car rental.

Mobile travel services, in conjunction with big data analytics, will no doubt be for travel intermediaries, technology companies and direct suppliers, such as hotel chains, a key area of competition in the next few years but also increasingly an area of cooperation.

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