By selling rooms that would otherwise go unsold, mobile-only players have carved a niche in the distribution space, but for how long? Ritesh Gupta investigates

With increasing fragmentation in the distribution space, intermediaries must have a unique selling proposition. “We are last-minute only,” says Christian Mischler, co-founder and COO of Hong Kong-based mobile-only booking platform, HotelQuickly.

For Mischler there is a big advantage to being mobile first or even mobile only. “It brings a clear focus to the company which otherwise it would lack,” he says.

However, not only does it bring clarity to a business model, it also helps hotels partners. “Previously it wasn’t possible for hotels to sell these rooms, but with us hotels can now increase their RevPAR,” says Mischler.

According to Heather Leisman, managing director, Europe HotelTonight, they help to drive overall revenue for partners by delivering high value guests. In fact, in a recent survey, the firm’s hotel partners indicated that the on-property spend of a HotelTonight guest is 17% higher than average.

5 ways that mobile travel agencies differentiate

1. Quality over quantity: For mobile specialists the holy grail is to deliver quality over quantity. “We don’t work with every hotel in the market and we don't bombard users with an overwhelming stream of options,” says Leisman.

2. 11th hour availability: Mobile specialists do not have availability throughout the day. “We sell rooms on the eleventh hour when OTAs usually have very low production for hotels,” says Mishcler. Deals can only be booked between 8am and 4am the next morning - for the very same night. Only that night is usually discounted; the subsequent nights are sold at best-available-rate.

3. A clear target market: A customer’s needs vary by device; the way they use each device is different too. What is clear is that mobile devices are more personal; they are always with you and many people will check their device first thing in the morning and last thing at night. In addition, mobile devices have capabilities like geo-location, camera/photos, accelerometer and so on. So it’s important for mobile-only firms to bear this in mind when identifying a target audience.

4. A distinct place in distribution: Unlike many OTAs mobile specialists avoid mobile-exclusive same-day rates that appear daily with a standard discount. For Leisman that makes no sense. “By offering a consistently low rate on mobile devices, hotels are simply guaranteeing that all guests skip their web rate and wait to book for less on mobile,” says Leisman. So unlike traditional OTAs, HotelTonight is not intended to be a core part of a hotel’s distribution strategy, but rather a partner that hotels turn to when other distribution partners have failed. HotelTonight does not demand any minimum discount from its partners, nor for a set number of rooms to be loaded each day. “We leave rate strategy entirely in the hands of our partners, providing them with the data that allows them to price their rooms appropriately and according to their needs and market conditions,” says Leisman.

5. Restrictive cancellation policies: Mobile specialist agencies are clear that they preserve the integrity of hotels’ full rates on other channels. However, they recommend highly restrictive cancellation policies. With advance bookings, one can improvise rate strategies to work out flexible cancellation guidelines. But with relatively shorter booking window, lack of certainty and lack of time means that flexible cancellation policies can result in either oversold or undersold situations, both of which are problematic.

EyeforTravel take: Mobile agencies may well feel that OTAs were wrong to offer a regular discounted rate on their mobile platforms. However, this pointed to the fact that they were trying to hold on to market share until they were ready to negate the first mover advantage. Indeed, established OTAs have responded to the growth of mobile specialists by threatening hotels to delist.

At the same time, some traditional OTAs have rethought their overall positioning; with it’s new avatar launched last year, lastminute.com acknowledges the popularity of the last-minute booking window. So as traditional OTAs show signs of playing, the battle looks set to intensify. What seems clear though, is that hotels in Europe are increasingly looking for a fairer, more equal deal from distribution partners – and, on this front, there is still work to be done.

Heather Leisman, managing director, Europe at HotelTonight is scheduled to speak at the upcoming Travel Distribution Summit Europe 2014 in London May 22-23, 2014