If you are involved in the travel industry, there is no way you will have missed the news: mobile is becoming hugely important and businesses that are yet to get on board are missing out on customers and revenue. Here is yet more proof of the significant role of mobile in the travel industry - according to a new report by eMarketer, mobile travel bookings are flourishing, with total sales from smartphones and tablets in the US expected to rise by almost 60% this year.
The eMarketer report estimates that US mobile travel purchases in 2013 generated $16.36 billion, but this figure will be dwarfed by the $26.14 billion expected by the end of 2014. Looking further into the future, mobile travel bookings are projected to increase by a compound annual rate of 31.7%, reaching $64.69 billion by 2018.
This year US mobile travel sales are predicted to represent an 18% share of all digital travel sales, which include desktop and laptop as well. By 2018 the share of mobile travel bookings is predicted to reach 37% of the total, eMarketer said. Mobile is the only segment of digital booking that is expected to grow, with travel bookings on desktop and laptop likely to decline over the next few years.
What are the reasons behind this rapid growth of mobile as a channel? Over the past few years smartphones and tablets have become mainstream, with their adoption rates in more mature markets like the US and the UK reaching about two-thirds of all adult consumers. As mobile granted better online access to consumers, mobile became their channel of choice for almost every aspect of travel - from researching destinations and travel companies to making bookings and giving reviews at the end of their experience. The industry responded with improved mobile-based websites and apps, allowing for the travel industry to boom on mobile.
However, at present, mobile is still preferred for smaller transactions, such as one-night hotel stays or last-minute car rentals. As tablets increasingly replace desktops and laptops in the household environment, this trend is set to diminish and the average value of mobile travel sales is likely to go up, eMarketer predicts.
Interestingly, since the travel industry is a more mature digital market, its share of total B2C e-commerce sales is expected to drop over the years to 2018, as other sectors grow and catch up on the e-commerce front. While last year travel accounted for more than a third of all e-commerce sales in the US, its share is likely to drop to 26.2% in 2018. Looking specifically at m-commerce, though, the picture is different. By 2018, the travel industry is expected to claim a 32.8% share of the total US m-commerce market, up from 31.1% in 2014, the report noted.