Everything you need to know about iBeacon and the travel industry

Personalization. Merchandising. Loyalty. Omni-Channel. Social. But what about iBeacon?

These are some travel industry watch-words to be mindful of as we strive to better know and accommodate our passengers and guests.

This is especially true as the fight for the traveler’s business heats-up and conversion rates become more critical.

The up-sell and cross-sell of products and services are the razor’s edge on which profitability lies. Up until recently, airlines have been unprofitable, in some cases highly unprofitable.

But the up-sell of ancillary products and services has helped put airlines back in the black while the cross-sell (hotel rooms, car rentals) is what currently drives profitability (see chat below). So the question of how to provide the right offer at exactly the right time is more important than ever.

The advent of mobile devices has given rise to a whole new level of consumer expectation. Users now expect that any desired information or service will be instantly available—regardless of device-type—in context, at their precise moment of need.

These expectations are not merely limited to consumers, however. but are also shared by employees in the enterprise space. How our employees carry out their jobs and how well they’re able to perform can be positively impacted by knowing where they are and what they are doing.

But how do we ensure our customers and employees are armed with the information they need at those crucial decisive moments?

As noted in this Mobile Research Council webinar, integrating context into the app is one of the key trends for 2014. It’s no longer enough to provide 24/7 access to information.

The true power of mobile lies in either delivering relevant information a user needs or in influencing a user’s behavior BECAUSE we know who they are, where they are and what they’re doing.

How well contextual intelligence is integrated into the app experience, will increasingly mark the difference between a good versus a great application.

This is why beacons are such an important development.

Several elements are essential to contextual intelligence:

• Motion: Is the user stationary or in motion? Is he walking, running or driving down the highway at 65 mph?
• Social: What information are users sharing on social networks?
• Behavioral: Are there any repeated movement patterns around time (e.g. arrive/depart work)?
• Transaction history: What purchases has the user made in that past that might provide a clue to future actions?
• Environmental: What time is it? What’s the weather?
• Location: Where is the user now?

Location is one of the most powerful triggers of action. But up until now, the technologies available have suffered from three significant limitations: accuracy, granularity and power consumption.

GPS is built into virtually every smartphone but is often too imprecise to measure location accurately. GPS only works well in outdoor environments with a direct line of sight to the satellites spinning about the Earth.

Thus, it is best-suited for road navigation or walking down a street. However, much travel takes place indoors, be it in an airport, hotel or at attractions like museums. GPS is also downright hostile towards battery life (as I’m sure most have already experienced personally).

Some indoor applications utilize wifi triangulation methods, but these also lack the precision required to act as triggers for contextually intelligent applications.

Proximity versus location: an important distinction

Location is an important indicator of context, but it’s not quite the same as proximity. It’s important to understand the distinction.

For example, the fact that you are in a particular location marks an important data point. But there’s a big difference in how likely you are to be interested in a particular object based on whether you are “in the vicinity” of it or right next to it.

Forgetting travel for a minute, let’s say you’re taking a walk in the park and you see a pretty flower. Whether you simply remark upon it from afar or walk right up to it to look at it more closely tells a lot about your level of interest and how much you want to know about it.

The same goes for any other object, person, or place. Consider that unlike GPS coordinates, beacons don’t necessarily identify a unique, fixed location. Beacons can be attached to items that may move or be moved (people, assets).

Proximity enables what we at Propelics call "micro-fencing".

Whereas geo-fencing operates on a much larger scale, micro-fencing works at the granular level. Using the beacon intervals of Immediate (< 0.5 meters), Near (< 2 meters), and Far (< 30 meters) enables us to deliver information and offers based on proximity far more intelligently than ever before. This ensures the relevancy of the information is aligned with intent and avoids the problem of overwhelming users with a myriad of off-target messages.

Gartner analyst Nick Jones identified High-Precision Location-Sensing [aka proximity sensing with devices like beacons] as one of the emerging mobile trends that companies must master by 2015/2016:

Beacon technology basics

Beacons (aka iBeacons) are very small devices that transmit small packets of data using the Bluetooth Low Energy (aka Bluetooth LE, BLE, Bluetooth Smart, or Bluetooth 4.0) standard.

As the name implies, one of the key attributes of beacons is they consume very little power, enabling them to last up to 2 years on a coin battery. Just as importantly, they don’t drain a Smart Device’s battery as drastically as GPS or wifi connections do.

The devices are also very inexpensive, available for well under $50 (and this is before any economies of scale from volume production). So expect prices to drop even further.

Contrary to popular belief, these beacons do not send out offers or alerts to phones. Rather, they send what’s known as “Advertising packets”—small bits of data that identify the unique beacon. The main parameters are the UDID (Unique Device IDentifier) and Major and Minor values.

In travel terms, let’s consider a beacon at the airline counter of Gate 24 in Boston Logan Airport’s Terminal C:

• UDID = 54003 (the unique beacon “serial number”)
• Major = BOS (top level identifier to indicate Boston Logan Airport)
• Minor = CG24a (denotes the beacon is specifically located at the airline counter at Gate 24 in Terminal C)

The packets wake up a “listener” to let it know it’s there. From there, the device calculates its proximity to the beacon.

Beacons are just one piece of the puzzle, however. Just because you have a device that can see a beacon doesn’t mean anything will happen. You still need an app or even a Passbook card that will recognize the specific beacon and know what to do with the message it receives.

But you don’t want the intelligence to exist solely in the app itself. Rather you want to manage all of the triggers and business logic for each beacon in the server-side app—somewhere in the cloud or in a datacenter—so content can be managed dynamically rather than being hard-coded into the app itself.

This will also make life easier whether you add more beacons to a location, add new locations, or dynamically change the information/offers. Otherwise you’d be reliant on users to continuously keep their apps updated (a poor strategy, for obvious reasons).

You will also need to create a mechanism to manage and monitor the beacons. Since beacons can’t communicate directly with the web (they lack wifi or other broadband connections), an app must communicate with your beacon and update its firmware. On the management side you will also want a way to check the state of the beacons. Are they working? Are they missing?

Mobile as a disruptor of the travel industry

Mobile is transforming many industries, travel as much as any other. The out-of-home, unfamiliar nature of travel has made it a perfect fit for mobile technology.

Historically one of the most aggressive adopters of technology, the travel industry has also been a leader in mobile technology adoption. The primary emphasis has predictably been in the research and booking phase of travel as well as itinerary management and monitoring.

But other than the mobile boarding pass, very little attention has been paid to using mobile devices (and the ambient information they can capture) as a way to enhance the travel process or as a means of interpreting, predicting and serving a traveler’s needs.

One great model for how mobile devices can play a central role in the entire travel food chain can be found in Apple’s famous iTravel patent submissions (via PatentlyApple).

For many years people thought NFC was the answer, and in fact NFC did figure prominently in the iTravel patent applications. But while most of the discussion around iTravel revolved around NFC as the driver, we all know Apple has systematically eschewed NFC, maintaining there may be other technologies which could also do the job.

And all the while, for the past three years, it invested in Bluetooth LE, embedding the technology in iPhones, iPads, even Apple TVs.

Perhaps Bluetooth LE in the form of Beacons will be the technology that finally unlocks the potential energy of proximity-based services and interactions originally laid out by Apple.

Use cases

Now let’s explore a few (of the many) potential use cases for Beacons in the travel industry:

1. Triggering spur-of-the-moment ancillary sales

Airlines in particular have an advantage because many of their travelers—particularly their most valued ones—have their apps already installed on their smartphones.

When a traveller enters the terminal a beacon at the entryway can provide an opportunity to trigger different offers based on what we know about the traveler, their flight status, and how busy the airport is.

Ancillary purchases that might not have been considered when re-targeted by email weeks prior to the flight may suddenly seem far more valuable, such as access to priority check-in, expedited security lines when the wait is long, a day pass to the airline lounge if the flight has been delayed or a re-accommodation has been made, or merely a seat upgrade on transcontinental or long-haul flights.

2. Navigating the airport/drive non-aeronautical revenues

This is one of the key challenges airports are trying to solve, especially as airports are transforming from holding pens to hubs of entertainment, fine dining and retail.

Navigating may not be so challenging in ones home airport as it is when one is traveling. Beacons could provide a more precise method of guiding passengers around the terminal. Apps like Gate Guru does a fine job helping users navigate new airports, but the information is often limited and the offers are static rather than dynamic.

Additionally, there is no way to determine interest or intent to encourage spur of the moment purchase. But if you combine fine-grained location with other information you can intelligently deliver information and offers based on proximity to better serve the traveler while driving increased revenues.

3. Tracking passenger movement

Today’s airports receive (on average) 47% of revenues from non-aeronautical sources. With analytics, airlines strive to better understand how passengers move through the airport, and where they dwell longest.

This information helps airports plan retail, dining and entertainment layouts that align with passenger movements in order to make it easy and convenient to eat and shop. While wifi access points to triangulate cell phones can build a picture of passenger movements through the terminal, Beacons can provide an even more precise picture to further enhance non-aeronautical revenue potential.

4. Automatic hotel check-in

Imagine that as soon as you walk into the hotel lobby a beacon alerts the Property Management System of your arrival, dynamically assigns you a room, and sends a digital key to your smartphone allowing you to bypass the front desk lines and proceed directly to your room—all without the need to check-in 24-hours in advance.

5. In-room controls

Some hotels require you to swipe a key-card simply to turn on the lights (which generates great energy savings). But why not just sense that you are in your room and enable a new set of services on your mobile device to control lighting, temperature, the TV, and even directly access room service to place orders?

6. Staff productivity and analytics

The presence of housekeepers and maintenance crews could also be logged by beacons, removing the need for paper-based records of routes completed. Alerts could also be sent if specific areas have not been serviced per schedule.

You can also use dwell time to generate analytics on how long different activities take and use them as a way to measure productivity or adjust schedules to maximize the productivity of your workforce.

Three steps to creating a beacon strategy

While Beacons are clearly eliciting great interest, the challenge is to convert interest into action. At Propelics we have developed a tried and true structure to help companies create an actionable roadmap to identify, develop, and implement new ideas:

1. Identify possible use cases

While we listed some potential use cases in the previous section, the list is by no means all-encompassing and may not align with your own specific business needs.

The first step is to identify a list of potential use cases. Industry articles and white papers are good sources of ideas, but the best approach to building a list of use cases relevant to your company is to begin brainstorming ideas aligned with your company’s business drivers.

Run an in-person session with representatives from different teams, particularly those who might have direct interaction with beacons, to generate an array of ideas. Sketch a matrix of ideas on a whiteboard, with business drivers along one axis (e.g. increase revenue, customer loyalty, reduce costs) and potential stakeholders (e.g. employees, customers, partners) across another.

It’s important not to limit the thought process of participants with organizational constraints. There are no “bad ideas” at this stage. Ideally, we want to generate dozens or hundreds of ideas, not five or ten.

2. Assess IT readiness

Now we begin to look at the feasibility of the ideas. Do we have what we need? How hard would it be to develop and deploy the solution?

For each use case, understand what data assets, systems and technologies are necessary to execute against the idea.

• Do current IT systems and processes support what is required?
• What security risks might be posed and do we understand how we might mitigate them?
• If elements are missing, what level of effort would be required to put them in place?
• Do we have the right resources and knowledge on our team?
• What dependencies on other teams or groups are necessary (e.g. help desk, partners)?

3. Build a roadmap

Now comes the hard part. Start making choices by using three key attributes to rank the different use cases:

• Business value: does this move the needle for the company against our key business drivers?
• IT Readiness: As defined above, do we have the technical foundation to deliver the proposed features and functions?
• Ease of Implementation: How difficult is this and how much will it cost?

Once you’ve organized all the relevant use cases in this manner you’ll be in a great position to build an actionable roadmap and can get started on creating specific timelines and budgets the entire organization can rally around.

NB: Look out tomorrow for a follow-up, Five Things To Watch Out For With iBeacon.

NB2: View the recording of a webinar from Propelics: How iBeacons will change the travel industry.

NB3: Airport mobile image via Shutterstock.