-- Befitting an airline headquartered near Silicon Valley, Virgin America turned to the smartphone to promote the opening of its new hub at San Francisco International's Terminal 2 in April.
Known for its social-media initiatives, the airline encouraged customers to announce their presence at the terminal by digitally "checking in" using Facebook and Foursquare, a mobile application.
People atop its "leader board" were given status icons — "Ground Crew" to "Navigator" to "Captain" — and would be eligible for awards, such as store coupons and flight discounts.
Virgin America is one of a handful of travel companies that are early adopters of location-based mobile technology that monitors people's whereabouts and delivers their spending and travel habits.
The travel industry is hardly alone in salivating at the new sales opportunities made possible by a large segment of people who are willing to broadcast their whereabouts. But with their expertise in capturing the business of people on the move, hotels, airports and airlines view the location-based technology — or hyper-proximity marketing, or geo-tagging — as the next important marketing frontier, particularly in targeting young, hip customers.
That it taps into a long-held assumption that people are more open to new ideas and suggestions when they're on the road adds to the appeal.
"Mobile technology can significantly affect the bottom line," says Dan Gellert of Gateguru, an airport guide map that's using the technology to deliver airport deals to travelers. "The accuracy of information and communicating with travelers in real time can drive a significant amount of users in the direction that (vendors) want."
In short, the travel industry wants to know where you are — preferably, at all times — because you may be buying things where you are at this very moment.
Tracking people comes loaded with a host of privacy concerns. More than 60% of respondents in a 2010 survey by Microsoft said they were concerned about location-based profiling.
"Your mobile phone will become the device you use to interact with the world around you," Thomas Husson of travel research firm Forrester writes of the technology. "This will raise growing concerns about risks to lose personal information or to share location information with people and organizations you don't want to have it."
Delivering convenient services and good deals would help travelers overcome the fears, he says.
Few travel companies are sure of long-term benefits even as they muddle through the new technology, which ranges from simply linking Google Map views of nearby hotels to partnering with smaller tech companies that specialize in the segment to deliver coupons and alerts.
Only about 4% of adults have used their smartphones to tap into location-based social networks, such as Foursquare and Gowalla, a Forrester Research assessment in December found.
"Companies seem to be struggling as to how else they can apply this technology," says Chuck Sullivan, Hilton Worldwide's senior vice president of global online services.
Looking for likely buyers
Still, the technology's marketing promise — providing the location and a better idea of what travelers may want at any time — has been too tempting for hotels and airlines to resist.
The travel industry is also betting that people who broadcast their location through digital check-in are more likely to buy.
"The likelihood of purchase (on mobile platforms) is exponentially larger than (regular) websites," says Kerry Kennedy, vice president of e-commerce at Omni Hotels.
How info is being used
Travelers' location information is being used in the following ways:
•Delivering guide information. The technology enables more sophisticated ways to deliver information about what's around you. The "Near Me Now" function on TripAdvisor's mobile app — click on it to get nearby restaurants and hotels — has quickly become one of its most used tools, says Mike Putnam, director of mobile products.
Loopt, another location-based service technology firm, recently launched "Loopt Qs," in which locals can participate in Q&As for mini-reviews of places.
InterContinental's booking app provides an option to sort properties based on where the user is standing, says Bill Keen, director of mobile solutions for InterContinental Hotels, adding more than 15% of mobile bookings are placed on the same day. "They're closer to the product, and they want to buy," he says.
•Get people in the door. Monitoring people's "social action" — such as checking in digitally or posting to Facebook — is also proving to be an easy way to promote and up-sell. All location-based technology developers have deals to deliver instant coupons at places where people check in.
Late last year, Disney partnered with Gowalla to encourage parkgoers to check in at rides and collect digital "Passport Stamps." The stamps can be collected and kept as a virtual scrapbook and to view park events.
Omni Amelia Island Plantation Resort near Jacksonville is testing a technology that uses guests' mobile phone Bluetooth capability to track their whereabouts at the 1,400-acre resort. The hotel can use the technology — guests can opt out — to send event reminders and deals, such as health drink coupon for guests working out in the gym or a happy hour reminder.
•Breed loyalty. Hotels and airlines also view the technology as a way to enhance participation in their loyalty programs. Starwood Hotels has a deal with Foursquare, in which its guests can check in at a Starwood hotel and receive an extra 250 points. With enough check-ins, a user can declare himself "mayor" of a hotel.
Although 250 points isn't much, and the "mayor" status merely amounts to a digital badge, getting social-media-savvy customers to be plugged in would result in more word-of-mouth advertising and retention, says Tristan Walker, Foursquare's director of business development.
InterContinental Hotels is working with Topguest, a location-based technology firm that can consolidate digital check-ins on major social-media apps, such as Gowalla, Foursquare and Facebook. Those who check in or post location-tag photos of a hotel receive 50 InterContinental loyalty points.
Topguest says it has a similar deal with Hilton's Doubletree and Hampton Inn brands and Virgin America. Topguest CEO Geoff Lewis says the number of people now totals in "mid-five figures."
Keen of InterContinental says he's also using Topguest as "a test of loyalty."
"Would it drive people to come back? Are they loyal to the (InterContinental) brand or are they loyal to the (technology)?" he asks.