Growing Customer Demand, Lower Device Prices Fuel Mobility Flame

6/10/2010

What started out as a spark is quickly turning into a wildfire. Headlines from the past year reveal that hospitality organizations are jumping onto the mobility trend in an effort to create a new channel for revenue, and provide customers with an additional service touch point. Pizza Hut, Choice Hotels, Omni Hotels, Chipotle and La Quinta Inns & Suites are just some of the big names to launch their own iPhone applications since 2009, and more are hitting the market each day with either an app or an updated mobile website. In the past two months alone, InterContinental Hotels Group (IHG), Hilton Worldwide, and Starbucks announced new advances on the mobility front.

Upon its Priority Club Rewards iPhone app launch, Michael Menis, IGH's VP of global interactive marketing (www.ichotelsgroup.com) said: "It's important to have a holistic view of a customer's needs when creating a mobile strategy and supporting applications. Customers want access to information whenever and wherever they want, and mobile provides that capability."

Customer demand for instant mobile Internet access is just one of the driving forces behind hospitality's, and most businesses', growing mobility embracement. At the core is a drop in device costs; faster and more reliable Wi-Fi connections offered both in the home and at hotspots; and the increased presence of location-based services, social networking, and mobile payments, according to Coda Research Consultancy's (www.codarc.co.uk) recently released study, Mobile Handset and Portable Computer Shipment and Penetration Forecasts for the U.S., 2009-2015. Coda estimates that smartphone penetration has already achieved a 17 percent rate in the U.S., and expects shipments to increase by 19 percent from now to 2015. Meanwhile, Wi-Fi enabled handset shipments are expected to rise by 21 percent during the same forecasted period.

What's more, as the presence of smartphone and Wi-Fi enabled devices continues to grow, the revenue from mobile advertising and mobile eCommerce is expected to be considerable. A sister study published by Coda predicts that each will increase at +37 percent and +65 percent respectively, between 2009 and 2015; these estimates are mirrored in previously released, hospitality-specific research from PhoCusWright (www.phocuswright.com) which shows that revenue from mobile hotel bookings hit almost $80 million between 2008 and 2010.

"With smartphone sales set to form two thirds of mobile handset sales in the U.S. in 2015, and over half of mobile handset owners forecast to use the mobile Internet in the same year, opportunities for mobile eCommerce are expanding significantly," says Steve Smith, founder, Coda Research.

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