The Mobile Travel Landscape 2016 A Multi-Region Report May 2016 Written and Researched by Cathy Schetzina Walsh Agenda 1. Introduction 2. Device Matters 3. In the Loop: Mobile Through the Travel Life Cycle 4. Booking: How High? 5. Mobile Winners and Losers © 2016 Phocuswright Inc. All Rights Reserved. 2 About Phocuswright Phocuswright is the travel industry research authority on how travelers, suppliers and intermediaries connect. Independent, rigorous and unbiased, Phocuswright delivers qualitative and quantitative research on the evolving dynamics that influence travel, tourism and hospitality distribution. Our marketplace intelligence is the industry standard for segmentation, sizing, forecasting, trends, analysis and consumer travel planning behavior. Every day around the world, senior executives, marketers, strategists and research professionals from all segments of the industry value chain use Phocuswright research for competitive advantage. The company is headquartered in the United States with Asia Pacific operations based in India and local analysts on five continents. Phocuswright is a wholly owned subsidiary of Northstar Travel Media, LLC. © 2016 Phocuswright Inc. All Rights Reserved. 3 Copyright All Phocuswright Inc. publications are protected by copyright. It is illegal under U.S. federal law (17USC101 et seq.) to copy, fax or electronically distribute copyrighted material without explicit permission. You may not copy, reproduce, modify, republish, upload, post, transmit, or distribute, electronically or otherwise, any Phocuswright research report in any form or by any means without prior written permission from Phocuswright Inc. Any unauthorized use of the materials may violate copyright, trademark, and other applicable laws and could result in criminal or civil penalties. © Phocuswright © 2016 Phocuswright Inc. All Rights Reserved. 4 Introduction After years of soaring mobile adoption… © 2016 Phocuswright Inc. All Rights Reserved. 6 Mobile is nearly ubiquitous among travelers in key markets. Smartphone Ownership Among Leisure Travelers 77% 80% 78% 81% 96% US UK FR DE CN Question: Which of the following web-enabled devices do you own/use? Select all that apply. Base: Leisure Travelers: U.S.: (N=1,003); U.K.: (N=1,008); FRA: (N=1,007); GER: (N=1,007); CHN: (N=1,014) Source: Phocuswright's Search, Shop, Buy: The New Digital Funnel © 2016 Phocuswright Inc. All Rights Reserved. 7 Many travelers have multiple web- enabled mobile devices to choose from. + (And maybe even) Source: Phocuswright Inc. © 2016 Phocuswright Inc. All Rights Reserved. 8 With experience under their belts, travelers are beginning to establish clear mobile habits and preferences. But what they’re choosing to do on mobile depends in part on who they are and where they live. In every region, mobile is disrupting competitive dynamics among suppliers and intermediaries, shaping the customer experience and swaying purchase decisions. Mobile Travel Landscape 2016 surveys Phocuswright’s latest mobile data to answer key questions and highlight the most important mobile travel trends across regions © 2016 Phocuswright Inc. All Rights Reserved. 12 Key Findings Mobile Adoption • Roughly 80% of leisure travelers own a smartphone, and tablet ownership ranges from 45-60% across markets.* • For travelers who own multiple devices (smartphone, tablet and laptop/desktop), mobile is capturing a growing share of time spent online – especially among millennials. • Wearable ownership is low – just 3-4% in Europe and roughly 15% in the U.S. – but travelers in both regions plan to purchase a wearable device in the next few years. • Travelers are increasingly comfortable planning travel via mobile, but smartphones and tablets still lag PCs in ease of use. China, France, Germany, U.K., U.S. Source: Phocuswright’s The Mobile Travel Landscape 2016 © 2016 Phocuswright Inc. All Rights Reserved. 13 Key Findings (cont.) Mobile Usage • Mobile travel booking incidence remains low in most markets, especially Europe (3-5%). The exception is China, where more than one quarter of leisure travelers booked via mobile in the past 12 months. • Travelers are more likely to use mobile when choosing a destination, comparing/choosing travel products, during travel and to share trip experiences on social networks. Booking • By 2017, roughly one quarter of online bookings in the U.S. and Europe and more than one third in Asia Pacific (APAC) will be transacted via a mobile device. Source: Phocuswright’s The Mobile Travel Landscape 2016 © 2016 Phocuswright Inc. All Rights Reserved. 14 Key Findings (cont.) Booking (cont.) • China leads all markets in mobile booking, and is set to become the first true leapfrog market: by 2017, 60% of the country’s online bookings will be made on a mobile device. • In contrast, France and Germany lag in mobile bookings. By 2017, just 20% and 24% of the countries’ online bookings, respectively, will be transacted via mobile. Channels and Products • Travelers across markets are more likely to use intermediaries (OTAs and metasearch) versus suppliers to compare and choose travel products on mobile devices. Source: Phocuswright’s The Mobile Travel Landscape 2016 © 2016 Phocuswright Inc. All Rights Reserved. 15 Key Findings (cont.) Channels and Products (cont.) • For mobile booking, OTAs are dominant in the U.S. and Asia Pacific, while suppliers have an edge in Europe due to strong direct air and rail bookings. • Product popularity for mobile booking varies by region. In the U.S. and APAC, travelers are most likely to book hotels, while air bookings are dominant in Europe. Apps vs. Web • Travel apps are more popular for travel shopping in China and the U.S. than they are in Europe. • When travelers do download a travel app, the most important factor influencing app selection is ease of use. Source: Phocuswright’s The Mobile Travel Landscape 2016 © 2016 Phocuswright Inc. All Rights Reserved. 16 Device Matters Are we there yet? Most travelers own a mobile device … but has the mobile-first era truly arrived? © 2016 Phocuswright Inc. All Rights Reserved. 18 Roughly 80% Tablet ownership ranges from of leisure travelers 45-60% own a across markets. smartphone. Question: Which of the following web-enabled devices do you own/use? Select all that apply. Base: Leisure Travelers: U.S.: (N=1,003); U.K.: (N=1,008); AUS: (N=1,011); FRA: (N=1,007); GER: (N=1,007); RUS: (N=995); CHN: (N=1,014); BRA: (N=1,000) Source: Phocuswright's Search, Shop, Buy: The New Digital Funnel © 2016 Phocuswright Inc. All Rights Reserved. 19 Ownership of Smartphones and Tablets Across Markets 96% 81% 80% 78% 77% 61% 59% 53% 49% 44% Smartphone Tablet China U.S. Germany France U.K. Question: Which of the following web-enabled devices do you own/use? Select all that apply. Base: Leisure Travelers: U.S.: (N=1,003); U.K.: (N=1,008); AUS: (N=1,011); FRA: (N=1,007); GER: (N=1,007); RUS: (N=995); CHN: (N=1,014); BRA: (N=1,000) Source: Phocuswright's Search, Shop, Buy: The New Digital Funnel © 2016 Phocuswright Inc. All Rights Reserved. 20 For travelers who do own multiple devices (along with a desktop/laptop), mobile is capturing a growing share of time spent online. Time Spent Online by Device (U.S. Travelers) 50% 47% 2014 2015 31% 27% 24% 22% Desktop/laptop Smartphone Tablet Question: Please take a moment to think about how much time you spend online throughout the day on the following devices. Please assign an approximate percentage of time spent online for each device. Assign a percentage to each row using whole numbers. Base: Multiple device owners, 2014:(N=1,331); 2015:(N=979) Note: Totals may not add to 100% due to rounding. Source: Phocuswright’s U.S. Traveler Technology Survey 2015 © 2016 Phocuswright Inc. All Rights Reserved. 21 Especially among millennials. Time Spent Online by Device, European Travelers 14% 14% 13% 9% 18% 55+ 18-34 54% 35-54 32% 68% 78% PC Smartphone Tablet Question: For all of the time you spend online, approximately what percentage of that time do you spend using the following devices? Assign a percentage to each row using whole numbers Base: European travelers 2013: (N=3,456); 2014:(N=4,120) Source: Phocuswright’s European Traveler Technology Survey 2015 © 2016 Phocuswright Inc. All Rights Reserved. 22 Smartphones and Tablets are Different Animals Highly portable and convenient Less convenient to carry during But the phablet trend toward larger during travel travel/sightseeing smartphones is blurring the lines Smaller screen not ideal for Larger screen makes it easier to plan Larger smartphones are still highly planning complex trips complex travel on tablet versus portable and convenient during smartphone travel or sightseeing, but are easier Popular for updating social network to use for complex travel planning status on-the-go Ideal for rich media than their smaller counterparts. Smartphones are more popular More popular than smartphones in than tablets for travel planning Europe for travel planning in U.S. and China © 2016 Phocuswright Inc. All Rights Reserved. 23 Devices Used for Travel Shopping 71% 70% 66% 65% 65% Tablets trump smartphones for 53% travel shopping in European markets 34% 18% 18% 12% 14% 9% 10% 9% 11% PC Smartphone Tablet China France Germany U.S. U.K. Question: What sources of information do you recall using to compare and choose leisure travel prices and products, such as airline tickets or hotel rooms? Select all that apply. Base: Leisure Travelers: U.S.: (N=1,003); U.K.: (N=1,008); AUS: (N=1,011); FRA: (N=1,007); GER: (N=1,007); RUS: (N=995); CHN: (N=1,014); BRA: (N=1,000) Source: Phocuswright's Search, Shop, Buy: The New Digital Funnel © 2016 Phocuswright Inc. All Rights Reserved. 24 What about wearables? It wasn’t love at first sight … In Europe, just 3-4% of travelers owned one in 2015. U.S. travelers have been faster to adopt wearables, including smartwatches (13%) and fitness trackers (17%).