India’s tourism and hospitality sector is thriving. With $ 234 billion, it is the seventh largest market in the world. It is expected to grow to reach 424.5 billion dollars or 10 percent of India’s gross domestic product (GDP) by 2021. The increase in disposable income of Indians, especially of cities of level II and level III , will be an important contribution factor.
Strong aviation market is on par with this. Domestic airlines carried 11.2 million passengers in FY18, an increase of 17.7 percent compared to the same period last year, according to a Care Ratings report. At current growth rates, the India Brand Equity Foundation report says that the Indian aviation market will likely become the third largest market by 2020.
Friction – A new challenge for the market.
A recent report by Facebook, Nielsen and KPMG, entitled “Elimination of friction on the travel route to purchase”, defines friction as “any additional effort, incremental steps or inconveniences that lead customers to abandon their shopping trip. ” Brands tend, unknowingly, to allow friction to seep into their campaigns and their marketing mix. Friction comes in various forms: as unclear advertising, irrelevant advertising or lack of lucrative offers. Contradictory information, unsatisfactory help from travel agents or customer service executives increase consumer frustration. The lack of preferred payment options, flight details or room availability, last minute price changes or additional taxes, all act as friction.
Friction in Airline Booking
The Zero Friction Future report for travel says that, when booking airline tickets, 23 percent of consumers leave due to friction, and almost half are caused by the media. 8 out of 10 respondents said they faced friction with the print, outdoor and radio media at the stage of recognition and consideration of the brand. When the potential client does not find relevant information such as the following steps, offers, prices, terms and conditions, they tend to choose not to participate quickly, according to the report. In fact, the report points out that this affects only a fifth of the decision makers who end up making a purchase.
Friction in hotel Booking.
When booking a hotel, 32 percent of consumers give up due to friction, and almost half of this friction is caused by the media. The report says that 6 out of 10 respondents say that the main points of friction were the printed, the outside and the radio. Like airlines, when booking a hotel, the consumer wants to know the proximity to popular locations, services, reviews, prices and discounts. They also want property images, cost comparisons and meal inclusions to make an informed decision. If hotels do not highlight each of these factors, the consumer will simply move on. Dropout rates with hotel reservations are almost one third of the decision makers who have seen the ads.
Why is Mobile the solution to the friction faced by consumers in the travel industry?
The report notes that mobile devices have the power to reduce many points of friction that are common for offline and even desktop media.
According to the report, the use of mobile phones to resolve friction stagnation in the purchase route can open an $ 11 billion sales opportunity for airline and hotel players in 2022, according to the report. India is one of the largest markets in the world, in terms of Internet users. Since most of India’s potential customers are on the mobile, keeping it out of the media mix is no longer an option for brands. The report states that brands have a revenue opportunity of $ 19 billion to re-analyze their marketing strategies in an Indian mobile Internet economy.
The report finds that simply adding mobile to the media mix has the potential to reduce media friction and unlock sales opportunities worth $ 11 billion. Travel with mobile influence is compact. The report notes that an airline booking trip is 24 percent shorter on the mobile than offline. Hotel reservation trips are 19% shorter than offline mode. By 2022, the total opportunity influenced is estimated at $ 42 billion in travel purchases.
The importance of the mobile is evident because, by 2022, it is likely that 4 of the 5 airline reservations are influenced by the mobile. Similarly, it is expected that 90 percent of hotel reservations at that time have mobile influence.
If you are looking for resources to overcome friction, you can read all about them here.