Booking.com is attracting about 60% of its bookings via mobile, with about 40% of those coming from its apps.
The company wants to capitalize on the digital acceleration seen during the pandemic to drive further momentum to its mobile offerings.
Arjan Dijk, chief marketing officer for Booking.com, says consumer trends are playing into its hands.
In a Q&A with PhocusWire he talks about the behavioral shift, offering a contextual experience and its app-first approach.
Booking.com has said 40% of total bookings were made by the app in the first quarter of 2022, can you elaborate?
App and mobile web is 60% but mobile app is really growing. I used to work at Google in the Silicon Valley and I’ve seen that whole shift from desktop to mobile to mobile apps happen in key consumer apps. I’m also on the global client council of Facebook and Facebook and Instagram don’t even report anymore on desktop usage; they really have the majority of their usage in the mobile app, 90% plus, so that ship kind of sailed five or six years ago for key consumer apps.
The key insight we see now is falling e-commerce. It used always to lag a little behind because people were not trusting completely that you could do things on their mobile phone, were afraid they would get stuck, the user experience was not always great and the great thing with a mobile app is that you have a kind of native application on your phone and you pull in the live data. You see consumers in general trusting more to buy on a mobile app and if you look on Amazon, what they’re saying is that 45% of their consumers only use the app for buying on Amazon and 35% use a mix of mobile web and mobile app. If you add that up, and I’m not sure if you can, you suddenly see that 80% of what Amazon does is already on a mobile phone.
We see in travel a very similar shift and a key reason is clearly younger audiences coming on the market and booking with us. The amazing thing is that last year, in August which was still COVID times, there was this kind of eight week period in Europe where there was a bit of breathing space when you could travel and we actually had more than 100 million monthly active users which is amazing because pre-pandemic it was somewhat lower so there is this huge trend towards the mobile app. I’m actually very proud that we’re the number one travel app in the world with a distance.
Whose metrics are those?
App Annie is the source everyone in the industry uses, there are others such as Apptopia.
These are huge numbers and it’s interesting that you mention Facebook, Google and Amazon because there are things you would do with Facebook that don’t necessarily translate to a travel app so are there things that will always prevent you from doing that on the app?
I completely agree with you. Clearly when you’re planning a big vacation and spending a lot of money there is a clear use case in going on a desktop and looking at pictures very carefully especially when you have specific needs or you’re traveling with your family. I don’t think that will ever go away, that’s not my point. The only key thing to note is that mobile app usage is really exploding, people are loving it because you have this kind of instant experience. No matter what data connection you are on most apps work reasonably well even if your data connection is not that fantastic.
The key thing to realize, and it’s very important for the travel industry, if you look at the number of apps on people’s phones on average it’s around 80 in the developed world, if you go to Asia that number goes down drastically, it’s about 40. The key story, if you look at the number of travel apps people have on their phone, it’s probably three/four/five and when I talk to our accommodation partners I tell them that if they want to be part of the move to mobile apps, work with booking.com.
The key point is not to say desktop is dead. However the trend, the growth is very clearly in the app space and what we’re saying to our accommodation partners is to wake up to this, work with us, optimize your offering for our mobile app because this is where people are spending their time nowadays.
We now spend something like four-and-a-half to six hour on our mobile phones. It seems a bit sad but that’s the reality of life. The key thing is that the apps your have on your mobile phone more or less are the windows into your life and we’re saying booking.com is one of the key windows into people’s lives and we want people to wake up to that.
Is there anything right now, apart from these huge numbers and growth, that is making you think that now is the right time for this app-first approach?
It’s really the momentum, the shift in consumer behavior. We observed it already three years ago and now it has exceeded even more than where I thought things would be.
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I remember setting a target of 100 million monthly active users and my team said I was insane and then we hit it. I love to accelerate momentum, there’s no point in pushing water uphill you really want to push it downhill. I’m not sure if the travel industry has woken up to it. It’s maybe not a revolution but an evolution but, the numbers are immense,
Glenn Fogel talks about the connected trip strategy and booking a tour or activity and turning up with your QR code so how do you see mobile playing into the connected trip strategy?
Hugely. The key thing is we’re on a journey here so if you open our app now we have a decent experience for many verticals but in an ideal world there is a pre-stay experience which is the booking experience, then a stay experience and a post book experience. When you’re in your hotel room and you open our app you get that kind of context. Ideally you get advice on what to do such as a great restaurant nearby or it’s raining so why not go to this museum and we have great museum tickets for you.
So, that’s really the ideal end-game but we’re not there yet because it’s really difficult to hand stitch it all together. That’s why we have thousands of developers really working hard on making sure we do all the basics right and then starting moving more towards this contextual experience. That’s the great thing about mobile phones especially when people allow us to know where they are. We know you’re in your hotel in Amsterdam and we give you tailored suggestions based on the things we know about you.
What is it about mobile that makes it the strongest channel for direct booking? It’s this mini computer in your pocket that you have all the time but are there other things that make it a really strong channel for direct and repeat bookings?
I think it’s a mix. It’s that people like apps because of the native nature, that you know they’re generally reliable and work well. Then, there is the story about context and there is the immediacy of notifications. I sometimes talk about email as the direct marketing of the 80s, I still use email, younger people probably don’t even use email any more so we also see that shift in media consumption which means the phone is really where the key action is and even for e-commerce, and for bigger purchases, people are more comfortable now.
What about conversion, does it convert better on the app, are they actually booking?
I wouldn’t say it converts better or worse. We also often see people sometimes start a search on desktop and then go to mobile phone and vice versa, so depending on what customer you are, you see different routes. The nice thing about the app is that you can get your booking confirmation in the app, you can chat in the app, call through the app which means that when you call, and we’re testing that, you don’t need to give all your details because the customer service specialist will know exactly who you are.
It’s quite an ambition to be one of the first travel apps on people’s mobile phones, do you count maps and Uber in that?
If you look at downloads, you would have GoogleMaps, Uber and then booking.com. I would argue that with GoogleMaps and Uber I wouldn’t call them travel apps, I think they serve a different purpose. If you look at travel, we’re the number one app already.
There must be countries, georgraphic gaps, where you want to be on those mobile phones?
We’re clearly very focused on the U.S. and if you look in the U.S. I think we’re number three in terms of downloads in the OTA industry and we’re chipping away at that.
Facebook and Instagram don’t even report anymore on desktop usage, they really have the majority of their usage in the mobile app, 90%+, so that ship kind of sailed five or six years ago.
I don’t know if you’ve seen our U.S. campaign with Idris Elba. If you notice those ads, you’ll see we always dramatize the mobile app, it’s subtle but it’s really the mobile app screen we’re showing at the end. The U.S. is a key area where we’re more of a challenger. We’re working really hard to also compete with Airbnb and the vacation rental space. Clearly in the UK, booking.com is really strong in the alternative accommodation or vacation rentals space but that’s a key focus also in the U.S.
When you think about that advertising and showing a mobile app screen as opposed to a desktop screen, do you think you’ll ever be more blatant about that advertising because you talked earlier about accelerating momentum?
We have a lot of discussions around it, and when you think about behavioral science, we as consumers are guided through an experience and we are thoughtful on how we want to guide our customers through that experience. People who love desktop, we want them to book on desktop, people who want to book on mobile web, fine. However, we really believe that for the future the superior experience will be in the mobile app because it’s really fast and will be able to give you those contextual insights which are far more difficult on the desktop.
Are you seeing any trends to say consumers are more impulsive when shopping and booking in the mobile app and anything to say they spend more?
We don’t really see that. It hasn’t been flagged to me. The interesting thing I would say is ‘Is our mobile app user really any different to any other user?’ I don’t think so and it goes to the case I said before that it’s become so ubiquitous, that people are so used to transacting in a mobile app, that we can’t really say that any more.
In your Q1 earnings call, Glenn Fogel talked about attaching things for the overall experience, is this something that is being done in the app?
At any moment in time we have many experiments going and they vary from lower things to bigger things. For example, when you open the screen, we’ve always started with the search bar but what are the best ways of really showing what people want to see? I think it’s far more of a test and learn mentality we have in making sure we offer the right experience to our customers.
Do you think you will always start with a search bar?
We’re testing and have tested different things, we are still. When you open the app now it will show where you are now and give you the hotels around you. We’re not religious, we will go where we think the majority of our customers will want to go.
There are lots of developments in machine learning and artificial intelligence, how do you bring some of these developments into the app so you better serve the customer?
This is kind of what I talked about when ideally you’re in your hotel room and it’s raining we would give you tailored recommendations because it doesn’t make sense to tell you to go to a lake when it’s windy and raining.
We also have flights, rental cars and attractions so what we also do is look at you and think you would be best suited to a great offer for a rental car because you’re going to Ibiza, and when you want to go to the beach you want to have a rental car. So, we’re doing that already in customer engagement with notifications and email marketing, and expect far more to come in product.
Going back five or more years booking was talking about a chat service for once you arrive at your hotel, are those things you want to build into it?
We have that, that’s one of our key differentiators also, and especially for vacation rentals, we see it’s a feature that’s used a lot. People can quickly chat with the person that lets out that property. Also, from a service point of view, you have synchronous customer service and asynchronous. A lot of things might not need to be dealt with immediately but you just have a question, so the ability to really differentiate with that will also be done well within a mobile app. The great advantage is you don’t necessarily need to announce yourself any more because we can see who you are. You don’t have to go through a whole validation process, we can see when you’re in a mobile app and logged in.
Many people are using the app or the mobile website so is there still an education piece to get more people to use it?
No, I really don’t think so. I think the world has woken up to it, but I think the industry has to wake up to it and have the realization that, clearly when you’re a big hotel chain you will have your own mobile app, but when you’re a smaller hotel, use us.
So, it’s really the independents that you want to wake up to the idea of mobile?
I do think hotel chains generally understand already the power of apps. Even for them, if you look at the worldwide usage of apps, it’s booking.com and a couple of OTAs and then it drops off dramatically, so there’s no comparison in terms of the reach you’re getting. In the industry that’s how we talk and we want to help hotels get incremental customers that they would not otherwise have got.
Is there anything that has surprised you in the past couple of years in terms of behavior on mobile?
I’m in my fifties, I went to Gran Canaria I booked on booking.com. I go on a laptop and look at the pictures because I like it but I’ve had to realize that I’m becoming the dinosaur that is used to the old ways to working. I was a bit surprised with the speed of change, that people have embraced mobile apps as a daily part of their lives, and that they completely trust.
As a brand you have to live up to that trust, that your app works reliably, that you can finish your booking, that it’s safe, and lots of work goes into it. We do almost weekly releases to make sure the app is up to date to the latest standards and does open, because that’s a problem sometimes if it doesn’t open, and it might be driven by a crappy mobile reception, but the cellphone company doesn’t get the blame, it’s the mobile app that gets it.