Study: Mobile Payments to Have Major Travel Impact

by Fred Gebhart

What’s in Your (Mobile) Wallet?
The mobile wallet is coming. So says PhoCusWright in a recent report on mobile payments and how near field communication (NFC) will change travel.

Industry forecasts project 247 million NFC-enabled smartphones in use by 2015, up from fewer than a million in 2009. For travelers, that means using a phone for transactions as small as a cup of coffee or a newspaper to taxi fares, restaurant bills, and hotel charges.

Travelers are already using similar mobile technology for electronic boarding passes and public transport fare payment. Apple has already filed patents covering the complete travel process on the iPhone, including trip planning, searching, reviewing, booking and buying air, hotel, car rental, train and bus travel using NFC. But don’t go looking for iTravel apps just yet. Apple has yet to equip iPhones with NFC, but third party providers are providing iPhone cases and other accessories that add NFC functionality.

Mobile Hotel Check-in Arrives
Travelers who want to skip the front desk check-in lines at their next hotel may be able to walk in the front door and head straight to their rooms.

Mobile Key offers an encrypted acoustic technology to unlock hotel doors using smartphones. On the day of check-in, guests get a mobile message with their room number and a unique acoustic code keyed to the lock on their room door. Opening the door via phone takes about as long as sliding a traditional key card.

The company claims that using an acoustic code rather than a radio frequency, or near field communication, code, gives travelers more flexibility. The iPhone and many other portable devices are not equipped for NFC, but any mobile device equipped for phone calls can generate an acoustic code.

Ancillary Fees Top Travel Managers Worry Lists
Travel managers have plenty to worry about, what with continuing recession in Europe and uncertainty over the U.S. budget. But what really has them worried is ancillary fees on air and hotel purchases. On a scale of 1 to 5, ancillary fees topped the worry list at 3.35 in a year-end 2012 survey by AirPlus International. The next worry was airline consolidation, 2.34. The European recession rated less than 3 and the U.S. debt gridlock came in at 2.59. The single more worrisome factor in 2013 travel spending was the cost of fuel, at
3.47.

Casto: Airlines Need to Cooperate on Fees
“At the end of the day, the airlines fly on the back of the corporate credit card. They need to find some way to cooperate with their key clients on issues like ancillary fees. We are not seeing enough willingness on the part of the airlines to do so.” – Marc Casto, President and CEO, Casto Travel

Advito: Business Travel Demand Flat in 2013
What lies ahead for business travel in 2013? Steady demand but little, of any growth, according to Advito, the independent consulting unit of TMC giant BCD Travel. Faced with growing uncertainty over economic developments on both sides of the Atlantic, companies are taking a wait-and-see approach to expansion. That means little new travel until companies see a break in the economic clouds hanging over Europe and the U.S.

Airline capacity will continue flat in the U.S. with moderate growth in Europe and the Middle East, Advito also predicted. Much of the growth in Europe comes from expanding low-cost carrier networks while Middle Eastern carriers are buying new aircraft and upgrading fleets. Continuing airline industry consolidation will like limit future capacity growth and lead to upward price pressures. Slow demand growth will likely moderate price increases, but expect jam-packed domestic, international and transatlantic flights.

iJET Goes Proactive
Reacting to traveler safety and security concerns is not enough. Companies need to be proactive in alerting their road warriors to potential problems and guiding them through crises as they occur.

That’s the suggestion from iJET, a global intelligence and business security provider, which has launched a series of services for companies seeking to protect employees before a problem occurs. Worldcue Assist provides a one-stop, 24/7 hotline for travelers to call for travel, health and security issues from anywhere in the world. Individualized company protocols help reinforce each organizations’ own policies and branding when travelers call in. The service offers case management for travel, health and security incidents; proactive monitoring of threats to traveling employees; and a wellness check-in service to confirm the safety of client employees.

An Alternative to First Class
Private jets are back in the news as an alternative to first class. The newest entrant is Jumpjet, which flies Dassault Falcons on routes between 40 U.S. cities. Because private aircraft are not subject to TSA inspections, travelers can often be delivered direct to aircraft as little as 15 minutes before takeoff.

Jumpjet’s primary market is individual travelers, but businesses can cut their own deals depending on travel needs. For individuals, Upper Club members get 10 round trips per year on flights as long as 3.25 hours, about the distance from New York City to Aspen, for $2,350 per month. Upper Club Plus covers flights up to 4.25 hours for $3,995 per month. Elite members get ten coast-to-coast round trips for $5,550 per month.

Airline-Direct Sales Expected to Soar
Travel policy enforcement is not going to get any easier over the next few years. The International Air Transport Association predicts that 50% of online bookings will be made by phone, tablets and other mobile devices by 2017.

The report by Atmosphere Research Group said airlines are becoming more like traditional retailers that market more by features and appeal and less on price. That means airlines will be pushing to escape marketing channels that present seats as interchangeable commodities. The goal, the report said, is reduce the number of bookings made primarily or exclusively based on price.

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