Booking travel via mobile devices has been a well-established trend for a number of years.
In 2016, for the first time, the mobile channel accounted for more than half of total online travel bookings in the US, according to eMarketer.
In China, the trend is even more advanced, as over two-thirds of travel bookings on the country's leading OTA, Ctrip, are via mobile devices.
Over four years ago, the Asian startup Tinklabs introduced mobile phones into the hotel world with a new twist when they launched their Handy offering. Curiously, although the company is based in Hong Kong, it has chosen to designate its product with the German slang term for a mobile phone which is 'handy'.
A simple business model
The business model is really quite simple. Mobile phones are supplied to a hotel property for an average fee of €30 per room per month, thus allowing hoteliers to replace their landline phones.
The fee varies based on the type of services requested by the hotel, but, in any case, hotels are forbidden to charge guests for the use of a Handy device.
However, the main attraction is for guests, who are offered the free use of a mobile phone during their stay in the hotel.
Local calls as well as international calls are free of charge.
By using the hotel's Handy phone, the guest can avoid exorbitant roaming fees and be free of any connectivity problems while travelling in foreign countries.
The Handy phone's custom Android software offers the guest unlimited data, a Google maps app to navigate around the destination and a mini-guide to important sights and attractions. In addition, Handy's software can book tickets, e.g. to Disneyland Hong Kong.
While Handy's phones which first entered hotel rooms in 2012 may be older Alcatel models that run on 3G, some hotels already use models that support faster data, and others are in the process of upgrading to 4G.
Handy OS claims to be the world’s first mobile operating system tailored for the hospitality industry.
Content and services features include 'push messaging' and the LUXOS City Guide, a Milan-based promotional publication which is chiefly distributed in hard copy format in hotel rooms.
Thus guests can be steered towards hotel promotions and local hot spots.
Hotels can also provide services that respond to travellers' on-property needs and wants. Handy can be adjusted to accommodate a variety of languages, as well.
While Handy's installed base is still concentrated in its original markets of Hong Kong and Singapore where 80% of rooms in the 3- to 5-star segment feature Handy devices, the group's mobile offering is now present in over 1’000 hotels across 9 countries.
Already Handy phones can be found in 20’000 rooms in London.
The group now counts hotels branded by major chains like Starwood, Accor, Shangri-la, and Melia as customers.
The company hopes to expand its service to 1 million hotel rooms in over 100 cities by the end of 2017, tripling its staff in the process. Although this growth will be global, Europe is the immediate target.
Backed by Foxconn
Tink Labs, which was founded by 24-year-old university dropout, Terence Kwok, is one of Hong Kong’s best-funded start-ups and has an estimated worth of US$500 million.
Tink Labs began as a device rental service targeting travellers at airports, but pivoted towards hotels when the team found that the business wasn’t as scalable as hoped, according to Kwok, who noted that, “We quickly realized people just want to get the hell out of the airport”.
The group has remained focused on travellers, but moved on to hotels where it has found traction, raising over US$170 million from investors so far.
In September of last year, the firm raised US$125 million to expand its business to cover more hotels worldwide. Most of the money came from FIH Mobile, a subsidiary of Foxconn, the world's largest contract electronics manufacturer, which is a major supplier of mobile phone components.
Guests more likely to interact via mobile
Handy management cites a two-year independent study which found that guests would spend an additional US$21 per night on average when staying in a room that includes a Handy device.
In an interview with TechCrunch, a tech news website, Kwok stated that about 30% of guests who stay in a room with a Handy will consult hotel information using the device.
Meanwhile, less than 10% of guests refer to the standard hard copy book of services found in most hotel rooms, which limits the amount of ancillary revenue that a hotel can generate.
Since Handy charges hotels about €30, as noted above, the benefit for a hotel would seem quite substantial.
Assuming a 70% occupancy rate with 30 days in a month, the extra revenue generated per room could average €412 per month.