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How the West can bridge the gap with Asia


Skift take

Westerners have traditionally used cell phones as a research tool and as a desktop computer for transactions, while in the East, since people have mostly ignored the offline era, users have started straight away. in the digital age via mobile. Businesses looking to drive mobile commerce need to create unique touchpoints and tailor their product offerings to achieve a better mix of sales.

Varsha Arora, Skift Research

The use of mobile devices to transact online is growing dramatically, and mobile continues to have an increasing influence on how consumers plan and book their trips. Yet mobile conversions still lag behind desktop PCs. In this report, we aim to estimate the size of mobile commerce globally and understand regional variations in mobile commerce penetration in the travel industry. We focus on two travel sectors – hotels and flights – in North America, APAC and Europe.

For hotel bookings, we started by assessing the share of online mobile hotel bookings through direct channels and online travel agencies (OTAs) at the country level, and then we calculated the mobile revenue of the country. hotel by applying the percentage share to hotel industry revenues.

According to our analysis, China and Australia lead the pack with around 35% of total hotel reservation revenue coming from mobile devices. However, only 44% of hotel bookings are made online in China, while the share of online bookings in Australia reaches 80%, meaning that mobile is a much more dominant online channel in China than Australia. The United States, Canada, India and Japan are not far behind, with mobile bookings accounting for around 20% of total hotel bookings. The average share of online bookings is around 45% for these countries.

To estimate mobile flight bookings, we deducted mobile booking shares from regional mobile traffic shares. Through this exercise, we found that mobile traffic shares as well as mobile bookings are highest for APAC, followed by Europe and North America.

Last week we published our latest Skift Research report, Mobile Commerce in travel: A Global Perspective. Below we share an excerpt from the report.

Preview and Subscribe to read the full report

Put a number – Market estimate

While there is consensus that mobile represents a significant portion of travel revenue and that its share will continue to grow over the next several years, there is still a lack of industry-level estimates as to how much. the size of the travel mobile commerce market. To fill this gap, we have attempted to quantify m-commerce in travel with our own estimates. We focused on hotels and airlines, two of the biggest travel industries, for our estimates.

Hotels – Methodology and results

The data used for this exercise is for 2019, as 2020 and 2021 saw limited travel with likely temporary travel behavior, the effect of which we will briefly discuss later in the report. First, we have broken down the hotel reservation process by channel and then by device used to access that channel, as shown in the table below.

Exhibit 7: Hotel reservation process

Next, we estimated the share of online hotel reservations made at the country level based on secondary research, company filings, and our own estimates. For the country and region level breakdowns that followed by channel and device, we mainly used STR hotel industry revenue data, Similar web data for direct splits between channels and OTA and splits of OTA devices, and D-edge data for direct divisions of channel devices. Our final estimates are adjusted to reflect our analysis of other proxy data.

Figure 8: Hotel reservations by channel and device, 2019


According to our analysis, China and Australia lead the pack with around 35% of total hotel reservation revenue coming from mobile devices. However, only 44% of hotel bookings are made online in China, while the share of online bookings in Australia reaches 80%, which means that e-commerce in China is much more mobile-oriented than it is. in Australia.

The United States, Canada, India and Japan are not far behind, with mobile bookings accounting for around 20% of total hotel bookings, or around 50% of online bookings.

Figure 9: Revenue share of mobile hotel reservations at country level, 2019

Our estimates for regional mobile bookings are based on the assumption that the countries analyzed represent regional trends. So, when combined, mobile represents the highest revenue share in Asia Pacific, followed by North America and Europe, reflecting trends at the country level.

Figure 10: Revenue share of mobile hotel reservations at regional level, 2019

Another trend worth noting is how, in general, online travel agencies (OTAs) generate more mobile revenue than direct hotel channels. As our estimate above shows, for example, 80% of OTA revenue in China comes from mobile devices and the number of direct channels is only 60%.

This disparity can mainly be attributed to poor hotel mobile interface versus OTA and substandard consumer analysis at provider level, which hinders providing personalized services to customers, while OTAs invest. heavily into customer analytics and provide very streamlined and intuitive filters to make the booking process super easy on mobile devices.

However, there is great regional variation in OTA dominance and the differences in mobile direct booking versus OTA. Based on revenue call transcripts from Expedia and Booking.com, the two largest OTAs in North America and Europe – regions that are relatively less dependent on OTAs, around 40-50% of room nights booked were delivered via a mobile device in 2019 On the other hand, according to the earnings call from MakeMyTrip, the largest OTA in India, which is now expanding its presence in the wider APAC region, mobile bookings have reached 78 % for total hotel bookings across all brands in 2018. The regional variation is clear here.

Europe seems to be a bit out of place here. But it’s worth noting that despite being heavy on OTA, the overall share of mobile bookings is low in the region, indicating an inherent consumer tendency of travelers not being comfortable using mobile, whether on OTA websites and applications or direct providers.

Exhibit 11: Direct and OTA hotel reservations via mobile, 2019


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