Smartphones Account for 1 in 5 Hotel Bookings on Orbitz

When Orbitz began putting together a strategy to target mobile commerce in late 2009 there were still plenty of questions as to how fast the travel-booking industry was going to move to mobile. Now, three years later, the company ranks fourth overall in projected mobile sales for 2012. With gross mobile bookings projected to surpass $700 million in U.S. sales by the end of the year, Orbitz is only behind Amazon, Apple and Marriott in the annual guide.

“Mobile is a new opportunity to reach people and some of those people have different demographics than our other customer segments,” said Chris Brown, VP of product strategy for online and mobile at Orbitz. “We are looking at how do we target people that have a tendency toward mobile.”

Over the course of 2012, more than 20 percent of hotel bookings on Orbitz overall are coming from mobile devices, added Brown. Last-minute bookings for same-day reservations are especially high on smartphones. An average of 60 to 65 percent of all daily bookings on smartphones are for check-ins that evening, he said. When Orbitz first began taking hotel bookings on mobile in 2010, it only accounted for a few percentage points.

“We shouldn’t only think that people are using smartphones for last-minute activity,” Brown added, but it clearly drives a lion’s share of Orbitz mobile business today. Hotel reservations made on desktops and tablets are overwhelmingly for travel arrangements further out in the calendar. Just 12 to 14 percent of daily bookings made on desktops and 35 to 40 percent made on tablets are for same-day reservations, said Brown.

Hotels are a unique opportunity in mobile. It’s not only indexing the highest, according to Brown, it’s also showcasing a new mobile behavior around last-minute bookings. “We see a really strong affinity toward hotels and we want to embrace that,” he said. Car rentals are also skewed heavily toward same-day reservations on smartphones, accounting for more than half of all reservations made on those devices.

As one might expect, these rapid changes are impacting Orbitz’ marketing strategy. “Even things as simple and historically pretty useful like getting traffic from Google has changed over the last year,” Brown said. “Because mobile is becoming a larger share of how people interact with our brand,” the shift in marketing spend and strategy is commensurate.

More recently Orbitz has embarked on a multiple-app strategy by building standalone apps for specific categories like hotels or flights. This not only streamlines the user experience by enabling customers to complete their bookings inside an app or a refined mobile site, it has also increased Orbitz’ conversion rates, said Brown.

Through its mobile evolution, Orbitz has learned that most users prefer to touch the brand at multiple points. Although there is a growing crossover between channels very few people will entirely leave desktop for mobile, for example.

While other travel apps focus primarily on search and have to direct users to a website to complete their booking, Orbitz continues to develop its mobile site and apps to improve the entire process from search to reservation, Brown said. By forcing customers to put up with snags “you would never really put up with on the less,” less comprehensive apps will “ultimately make the experience less useful,” he said. “Mobile is still at that maturity level where things don’t service up so well.”