It is clear that traditional tour operators are facing challenges in how “ubiquitous consumer technology” (as Travelport’s CEO Jeff Clarke puts it) is changing customer behaviour.

In Europe, six in 10 travellers now book via the web and in Asia Pacific, where technology adoption is at best intense among consumers, online travel is now 21% of the market.

In particular, the smartphone is revolutionizing consumer behaviour. Late last year, Priceline in the US released data that showed that 82% of users of its Negotiator app booked hotel rooms within one day of arrival, compared with 45% of non-mobile bookers of Name Your Own Price hotel rooms.

In addition, 58% of mobile device-enabled customers were 20 miles or closer to their hotels when they booked the room and 35% actually were within 1 mile of the property. “This suggests that those customers had already arrived at their destination before making their reservation,” Priceline said.

In Japan, where I was recently, Japanese customers are also getting more comfortable with booking their travels online, and are beginning to book hotels overseas as well.

The major OTAs I spoke to indicated that up to 20% of their business was coming through mobile. Japan has always been ahead in the mobile space due to their unique made-in-Japan phones but younger Japanese are now carrying two devices, one made-in-Japan and the other, the iPhone or Blackberry, suggesting opportunities for international players to enter that elusive market through this channel.

So whether it’s due to crisis which causes customers to search for information and bargains online or technology, changing customer behaviour will have a big role to play in the smackdown between traditional brick and mortar businesses and technology-driven companies.

As Hans Lerch, vice chairman and CEO of Hotelplan, said, “On the one hand, you have those who know the travel business and on the other, you have those who don’t know travel but know technology.”

It was a point Dara Khosrowshahi (right), CEO of Expedia, also made in his interview with PhoCusWright CEO Philip Wolf. “We are good at using technology to solve problems,” he said, when discussing the ongoing battle over distribution between OTAs and airlines.

When asked if OTAs were there yet in terms of helping airlines sell their ancillary services, he admitted not yet but made it clear they would.

Barney Harford, CEO of Orbitz, (seated left) in my panel, singled out three things it would be working on to solve customer’s problems – data, mobile and platform. Specifically, mining the data, deploying a mobile-first approach and then rolling solutions out on a global platform.

Patrick Payne (right), CEO of QuickMobile, said that with more travellers making last minute bookings on their smartphones, it was clear traditional travel companies had to find new business models.

The power of mobile and devices such as the iPad to shift customer behaviour continues unabated. Google’s head of travel for US, Dave Pavelko (centre), said 20% of searches were now coming from mobile. Orbitz says it is seeing four times the amount of bookings happening via mobile vs the desktop.

Prior to the digital session, Dr Michael Frenzel, Chairman of TUI, said their biggest challenge was changing customer behaviour. “They have become faster in selecting destinations,” he said.

The other two are avoiding volatility and strengthening profitability. The former, he admits, is harder to manage. The latter it is doing by expanding outside its home continent. “The future is outside Europe,” he said.

It aims to be the market leader in Russia but he admits to challenges. Comparing tourism to the automobile industry where you just roll out one product across different markets, he said, tourism was more complex because in every market, you have to have a different business model because consumer behaviour is so different.

“In Russia, consumers book one week in advance. The Chinese love shopping and sightseeing, Russians love sand and sea.”

But could the two worlds be coming together more and more? There are some who say Kuoni’s purchase of GTA from Travelport is the smartest strategic move made by a traditional tour operator in a long time. Then there are also those who say Expedia’s joint venture with AirAsia is the OTA’s smartest strategic move since it expanded to the region.

Saying “every joint venture is a challenge and there are no guarantees in life”, Khosrowshahi said it had long looked at ways to tap the Asian market. Hotels.com was very broad, Expedia hadn’t penetrated South-east Asia, there was no other “Expedia” yet in the region, and it needed content and local distribution.

He said the market in Asia was accelerating so fast that if it took the approach of “test and learn”, it would take too long.

Asked if the joint venture would mean a bias towards AirAsia content, he said, “Expedia is about full content, we will have AirAsia content exclusively which we believe is an advantage. AirAsia is smart, it knows it can leverage our technology to increase their hotel sales.”

Add to the thickening plot the trend in partnerships between technology-driven travel companies and pure technology consumer plays. First, travel.jp partnering with Colopl, the location mobile gaming company, and now Tencent, the Chinese online company, buying into the Expedia-owned eLong in a deal announced last week.

Khosrowshahi said the goal with Elong was always to grow the online transactional side of the business. It’s since grown from 10% to 50% and “having a Chinese media partner will help us”.

In Khosrowshahi’s opinion, 10% of passion can double your profits in a technology company.

I wonder what that number is like in a travel company, and who will win this battle for the customer?