Mobile Applications

Trends Assessment University of Wisconsin Stout

Kate Smuda, Kyle Steinberger, and Patrick Tierney

October 3, 2012

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The Business Side of Technology – Section 1

Technology has become the trademark of today‘s society and as it continues to expand

into bigger and better things, it is beginning to provide numerous possibilities in the business

world. Mobile phones have turned from a luxury into a necessity, and with the abilities to be

connected to the web at all times it has allowed you to control your life while being constantly on

the move. In 2007 the first iPhone was released by Apple, and in 2008 the launch of the App

store was released. Android followed suit in 2008 releasing their first phone that could access the

Android Marketplace. Over the last 4 years development of these apps and marketplaces has

taken over the mobile phone industry, and the amount of things you can accomplish on your

phone now is simply amazing. When apple launched its App-storeit had roughly 500 apps, and

according readwriteweb.com, ―Apple reached the 100,000 app mark first, a little more than a

year after launch, in November 2009.‖ he later states, ―As of now, the Market (Android) has

about 400,000 apps while iOS (Apple) has nearly 550,000.‖ (Rowlinski) In 4 years, the app store

has hit over half a million apps, and it continues to grow more and more with the development of

new technology providing faster and easier access to information people care about. So how do

these apps and app stores relate to businesses? With the continuing expansion of the app store

marketplace, it is becoming the standard norm to have an app that provides access to the wants

and needs of the businesses consumers. Dailymail.co.uk provided in an article a survey done by

Alexa and Flurry Analytics that compared time spent on U.S Mobile Apps vs. Web Consumption

in minutes per day. The study concluded that in June 2010, the average use for web browsing

was 64 minutes and use of mobile apps was 43 minutes. About 2 years later in December 2011,

the average use for web browsing was 72 minutes compared to mobile apps which jumped to 94

minutes. This trend shows you that while internet browsing is still a large part in mobile phones,

the advancements in mobile apps is sweeping over our nation. For a business to be able to

produce an app and have their company constantly on the mind of potential customers is a huge

advantage among their competition. Other app benefits that relate to businesses are push

notifications, being native, provide a positive user experience, and allow you to view the

analytics involving your app. (Fitzgerald) Push notifications are popup message or updates that

alert the user of the phone when something new is available. These provide an inside track to the

consumers mind by always reminding them of your company and showing of your latest deals

and specials. Being native means that a data connection isn‘t required to access an app. For

example, if you‘re flying in an airplane without internet connection, you are still able to open and

use 95% of the app. The user experience is stronger on apps than a mobile website because the

app they are using is built for that certain operating system, and is able to help in more ways

having access to your phone‘s GPS. What I mean by this, is that if a user wants directions to a

hotspot near your hotel, the GPS signal can be picked up and the accurate set of directions can be

given from their exact location. Lastly, there are analytic packages which run the same for a

normal website. It allows the business to see overall usage, consumer data, and to show goal

conversions which gives the business a true understanding of the use of their app. With the

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amount of potential and upside to developing an app and the increasing amount of consumers

using them, provides an insight as to why mobile apps are taking over the hospitality industry.

The trend of the hotel booking app on smartphones has drastically changed the hospitality

industry. Apps provide travelers with the luxury of planning their entire trip via their

smartphone. Two companies have thus chosen to capitalize on this trend are Priceline Hotel and

Car Negotiator and Expedia. These businesses addressed the trend by emphasizing layouts that

posess a certain amount of attractiveness and simplicity. What both companies lack is true

imagination.

Priceline Hotel and Car Negotiator is the most relevant and predominate hotel booking

app in the industry. They do a great job advertising their product with the always hilarious

William Shatner. Also the company manages to stay ahead of the curve by providing outstanding

features for their customers. According to USA Today:

―Priceline's iPhone and iPad apps are noteworthy because they now give you

three ways to book hotels: You can browse and book stays at published rates; tap to place

a bid using Name Your Own Price for discounts of up to 60%; or access the Express

Deals feature, in which you know the room rate (up to 45% off) upfront, but only find out

which hotel it is after you pay. Express Deals is not yet available in Priceline's Android

app. In the fun and gimmick department, you can filter your hotel search by stars, guest

scores from verified patrons, and perks such as free Internet service and airport shuttle.

You also can spin a wheel to set your maximum price for the room.‖

The mistake that Priceline is making is that they fail to market to a specific demographic.

In order to make this trend of using this app efficiently Priceline needs to identify who their

target market is and market this app towards them. When the company Facebook started Mark

Zuckerberg specifically targeted college students ranging from 18-24. Then as popularity grew

Facebook began to expand its target market to wider age demographic. Priceline advertises the

app in the commercials with the average looking male in a taxi looking to book a last minute

hotel room. The message being sent is essentially anyone can use the app, however they need to

specify exactly who will be using their app. The target market that should be sought after is the

average businessman/businesswoman who extensively travels and is looking for cheaper deals.

While it is important to attract a general well-rounded audience, by appealing to a specific

market the app would gain much more attention and be much more received. Perhaps Priceline

could take some notes from their competitor Kayak.

Kayak has taken all of their features from their website and allocated them to their app.

The features this app provides are compare flight, hotel and car rental deals, track your flight

status, view and manage your trip itinerary, look up baggage fees, access airline numbers and

airport information. The Kayak app essentially makes traveling organized and efficient.

According to USA Today

―Kayak's app, which offers hotels, flights, cars and flight-tracking, has been downloaded

more than 17 million times‖. The only criticism that can be emphasized is that the app is

cluttered with advertisements. For 99 cents users can download Kayak Pro which in a essence

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de-clutters all the advertisements. Kayak should have taken the same approach in advertising that

Youtube made. The advertisements within Youtube are short 30 second segments that the user

can usually skip within the first five seconds. Not only does this satisfy the advertising

company‘s desire to reach a market right away it allows the customer to feel ‗in- control‖ and not

harassed by constant advertising. Both Expedia and Kayak can take what Starbucks and Chipotle

have done with their apps.

Starbucks has reached great success with the launch of their app and payment plan. One

of the features in this app is allowing customers to upload money onto their mobile phones,

which can then translate into a barcode that the register can scan. The customer literally needs to

only go to the store swipe his phone and pick up his order. Starbucks‘ took a chance and created

a completely new concept for the customers. In a sense this type of imagination is what

companies need to grasp. Since the creation of the app Starbucks mobile payments now account

for two percent of all sales. According to buisnessweek.com

―The mobile payment options also promise a profit boost for Starbucks. By letting its

customers make purchases with their smartphones, Starbucks manages to pay fewer fees—which

sometimes top 2 percent—on credit-card transaction‖. Chipotle has also made strides in their

mobile apps features.

Simplicity at times is key when creating a mobile app. Chipotle uses the most simple

templates they can in order to satisfy their customers. One needs to simply just put in his/her

location and then order from the store‘s menu. The application then texts you when the order is

done. Direct contact can help establish a relationship with the customer.

Bernie Mullen, a Hospitality professor at UW Stout, offered to be interviewed on mobile

applications. He has witnessed this progression first hand in both the University studies and the

hospitality field. Professor Mullen started his career working as a Tax Accountant, controller,

general manager for many different hotels, a VP in hotel operations, his current job as an

instructor, and finally managing partner.

How will mobile applications impact the business landscape? Mobile apps are just

starting to emerge in the hotel booking environment. It creates a whole different set of standard

operating procedures SOPs for the hotel. Some hotels have become so enclosed with technology

that there is really no need for any customer service personnel to be present, says Professor

Mullen. ―One of my friends called me up one night saying there is no one here at the hotel!‖ He

had checked into a hotel that was all technology based. The booking of the room was done from

a mobile device; he never had to check in at a front desk. There was just a machine that took his

information and gave him his card. We get so enclosed of technology now a days that we don‘t

seem to notice when there is no human present. The hospitality business has become so involved

with faster bookings right from your handheld it‘s almost scary to see what is happening to the

human connection.

How will hotel applications change moving forward? Professor Mullen started off saying

the new apps are going to greatly change the way hotel will fill up on rooms. This also will

create problems in how to keep rooms. Many people like using applications or online booking

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because of the anonymous factor. When guests change their mind about where they want to stay

they used to have to cancel before a period of time by calling the hotel and speaking to the front

desk. Now a guest can cancel a reservation just as easily as it was to book it in the first place.

Also the organization of current reservations needs to change. If a hotel is looking at moving

forward on being more technology based they need to make sure they have the clientele and the

staff to work with that, says Mullen.

How will businesses create a competitive edge on this trend? Businesses need to be able

to understand that mobile apps are going to be around and continue to keep growing for the hotel

marketing industry. To stay ahead of this trend hotels must adapt to the new apps and keep a

good watch on what other hotels are introducing. Once one hotel in the area has become

comfortable with applications it will be like a ―tipping point‖ the other hotels will act like

dominos, says Mullen. To stay ahead of the trend a business owner needs to realize there is going

to be a new trend before the community figures it out. A business then should be able to adapt to

the new changes to create a more efficient environment that applies to the customer.

How will mobile apps change customer service? There will always be a need for

customer service, says Mullen. The way a business goes about presenting the service is open for

possibilities. Nothing can beat human connection in the hospitality industry. With new gadgets

making tasks faster and easier it is hard to say how many employees are needed on site. The

technology change can be looked at in any business. Mobile apps are being created to give

information about any place thinkable, and this will continue to grow. Soon we will have apps

that will help a customer choose an item on a menu instead of actually looking at the paper copy.

Professor Mullen has worked with the technology advances in the hotel industry to try

and keep current with the community. A business does not necessarily need to create their own

application for their hotel. That will be harder to find. If a hotel just puts their information out to

a current app they will experience a rise in visitors. There is always a new gadget or application

that will help make everyone‘s lives easier. From my personal experience, staying at a hotel that

does not carry Wi-Fi access seems outdated. With this mobile application, hotels need to jump

on this opportunity to create more revenue. Customers will overlook hotels that are not at this

stage yet just because their information will not be stated in the app. The first look at a hotel is

no longer about location. It is about ease of information and how to get the lowest price possible

for the consumer.

In conclusion mobile apps are just starting to emerge to the hospitality industry. The

application can help find the right hotel and what benefits they have to offer for the consumer.

The app is taking the place of a laptop computer to make it more convenient right in your

handheld. Business owners in the hotel industry are starting to see this change and putting their

information out to these applications. We can predict this trend will be popular in the community

for a very long time. It will continue to expand, businesses that refuse to adapt will experience a

great loss in business. Consumers are interested in ease of access and quick confirmations.

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Works Cited

BELOPOTOSKY, DANIELLE. "IN TRANSIT: Expedia Adds App For Hotel Bookings." New

York Times 03 Apr. 2011: 2. Academic Search Complete. Web. 2 Oct. 2012

Dennis, Schaal. "Hotel apps with staying power." USA Today n.d.: MasterFILE Premier. Web. 2

Oct. 2012.

Fitzgerald, Brian. "The Myths About Hotel Mobile Apps And Why You Do Need

One." OROURKE. N.p., 19 Jun 2012. Web. Web. 2 Oct. 2012.

<http://www.orourkehospitality.com/blog/the-myths-about-mobile-apps-and-why-you-

do-need-one

Kharif, Olga. "Starbucks Schools Other Retailers on Mobile Payments." N.p., 23 Aug. 2012.

Web. 2 Oct. 2012. <http://www.businessweek.com/articles/2012-08-23/starbucks-

schools-other-retailers-on-mobile-payments>.

Mullen, Bernie. Personal interview. 2 Oct. 2012.

Rowinski, Dan. "[Infographic] History of Mobile App Stores." ReadWriteWeb. (2012): n. page.

Web. 3 Oct. 2012.

"Three Lessons from the Chipotle IPhone App." - O'Reilly Radar. N.p., n.d. Web. 02 Oct. 2012.

<http://radar.oreilly.com/2010/03/three-lessons-from-the-chipotl.html>.

Thornhill, Ted. "Apps have overtaken the Web in popularity according to the latest statistics

(actually, there's probably an app to tell you that)." Mail Online. (2012): n. page. Web.