Optimizing Hospitality Industry Mobile Apps
By Michael Kasavana NAMA Endowed Professor, School of Hospitality Business, Michigan State University | November 25, 2012
Forrester Research predicts by 2015 eighty-two million people will rely on mobile devices as a primary reference tool. Through the use of a mobile device, consumers are able to receive timely announcements, alerts, promotions, discounts, and location-relevant offerings along with access to reports of purchasing history, loyalty rewards status, and a host of concierge services. It is estimated that there are several hundred million active cellular network subscribers and with such a large number of users, it is critically important that hotels, restaurants, clubs, and casinos recognize the unparalleled competitive advantages that can be gained from location based applications (LBS), including guest check-ins, word of mouth broadcasting, and shared experiences. Gartner Research, which identified LBS as a top consumer application category for 2012, expects LBS application users to exceed 1.4 billion people by 2014. Jupiter Research estimates current market revenues attributable to LBS applications at around $486 million with 2014 revenue projections hitting $12.7 billion. Two key areas of mobile applications are location-based services and payment services.
A location-based service can be defined as an information and entertainment platform, accessible though a mobile network, based on the geographical positioning of the mobile device. In other words, LBS technology involves the use of device location coordinates to determine what directional or promotional information to transmit. Since 2002, LBS technology, primarily dependent on GPS triangulation, has been used to search proximity venues relative to a mobile device (e.g. "locate nearest hotel" or "find the closest Mexican restaurant", etc.). In 2010 LBS applications were expanded to include additional identifiable features and provide a basis for two-way data exchange.
Recently, push and pull technology capabilities were activated that enable the user to receive information, either via opt-in registration or proximity-based messaging, or seek desired information through access to mobile-compliant websites. Basically, LBS applications allow access to mobile messaging based on two factors: location and time. According to comscore.com, in January 2011 there were 74.6 million smartphones in the US. Given that LBS applications involve push and pull technologies only available over smartphones, industry researchers expect a significant increase in location-based services downloading.
There are two broad categories of LBS applications: push and pull. Push applications deliver information requested by the user in response to the user opting-in or triggering transmission based on entry into a specific location. In most cases, push LBS applications rely on pre-set content developed for the user (guest) by the host (hotel, restaurant, club, or casino). A push service is activated by an event (guest arrives in a targeted area or a time-dependent setting expires). Dunkin' Donuts and Cold Stone Creamery, for example, are two firms credited with using push-based alerts, and/or promotions, to notify guests when they are in close proximity to a store location. A consumer who opted-in (i.e. registered) with either firm's LBS application would receive such notifications whenever a registered mobile device was detected within proximity of a business location.