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This article is from the Summer 2003 issue of Hospitality Upgrade magazine.To view more articles covering technology for the hospitality industry please visit the Hospitality Upgrade Web site or to request a free publication please call (678) 802-5303 or e-mail. | |
| by Derek Wood, June 2003
What’s happening with hotel telecommunications in Europe? To start with IP telephony and high-speed Internet access are still the buzz words. All of the main PBX suppliers now have their IP offering, some as an upgrade (software and hardware) to the existing system and some as an entirely new product. I have yet to come across a hotel that has installed a total IP solution (I can hear the phone ringing), but a few have installed IP within the administration areas, with analogue or digital telephones in the bedrooms. Cost is a major factor, with the IP telephones not exactly being the cheapest around. As with most new technologies, the hospitality sector is not renowned for being leaders in cutting-edge developments, and with IP this I fear is the same. Until applications are written and benefits can be defined (especially in terms of bed nights) or when the guest demands the solution the uptake for total IP solutions will be slow. However, any telephony system being installed now must have the capability of being upgraded when the need arises. Digitally encoded cordless telephony (DECT) within four and five-star hotels is becoming common. DECT systems are replacing the older bleep or paging systems, and when installed, the guests are also benefiting from this technology in the bedrooms and suites. Fully integrated DECT systems give full caller ID (name and room number) and have features such as vibrate (for when you do not want to take the call), and from a guest perspective have message waiting indication as well as most of the features expected on a normal digital telephone, including hands-free. IP, wireless LAN telephones are breaking into this marketplace, but have yet to be proven in this environment. Watch this space. And that of course leads us to high-speed Internet access (HSIA). I guess there are two main providers of this service, interactive TV companies who offer surfing and e-mail capability through the television (as well as laptop connectivity) and independent companies that only offer laptop connectivity. Interactive television is becoming a growing marketplace here in Europe. Big players, as well as a multitude of new smaller companies, have entered this marketplace. Movies and music on demand as well as Internet access are some of the benefits of these systems over the traditional scheduled movie systems. But let us concentrate on the Internet access issue. It is my belief that in most hotels the television is not positioned correctly for the business person to undertake work. Sitting on a bed, balancing an infrared keyboard on your knees and trying to write an e-mail is not conducive to a good working environment (to say nothing of the bad back in the morning). However, I do envision that guests will use the television for surfing and other non-business uses. That leaves us with laptop connectivity issues. I have to say that within the United Kingdom this area is still very confusing to most hoteliers. They are told that they need the service (and by the way, they do), but which one and from whom? And what is DSL anyway? In the United Kingdom we are just beginning to see HSIA companies re-emerge from the disasters of previous years. Many U.S./Asia Pacific companies, having made good profits at home with the tried and tested "we pay for the installation and keep most of the revenue" model, soon found that this was not the best business model for Europe. Many who came two or three years ago left our shores. Some have stayed and weathered the storm, and many new ones are now emerging. Although most still offer a revenue-share deal, some are now offering a contract where the hotel pays for the installation, but in return keeps 100 percent of the revenue, and all of the pricing options in between. It is interesting monitoring the progress of these different business approaches. The other change we are seeing here is the way that the service is charged. Many hotels offer the flat rate per 24 hours (some cannot offer anything else), but some systems are now offering the guest a charge per minute, as per the telephone charge. In fact some hotels have positioned the charge the same as the telephone, or only slightly more, and have seen huge increases in uptake of this service. Until recently the industry norm was around 3 percent to 4 percent. Speaking to a number of my clients in London, this has risen to 5 percent to 6 percent within the last six months. However, those hotels that are charging per minute are seeing uptakes of 12 percent and the resultant revenue increase. It would appear that flexibility in charging for this service is becoming vitally important for both vendors and hotels. Another obvious point to mention is support. Twenty-four/seven support is required for those hotels that do not have e-butlers on hand (yes, we do have hotels here that employ e-butlers – who, by the way, are kept very busy). Some companies offering the service within Europe are not offering the 24/7 support to hotels. So hoteliers beware because guess who the guest will complain to when they cannot connect their laptop at 1:00 a.m. in the morning. A word of caution to European hoteliers who are installing this service: Guests who utilize the HSIA within the room will do so at the expense of the traditional analogue port on the telephone. Therefore be aware that your telephone revenue will decrease (in some cases up to 15 percent of the telephone revenue can be attributable to Internet connectivity – this of course is where business models vary between Europe and the United States). Think carefully before you give away 100 percent of this revenue, only to get 20 percent of the HSIA revenue on some of these revenue-share deals. Another contentious issue regarding HSIA is the wireless question. Most, but not all, systems have this capability, but there are still concerns regarding the security of these systems. Every vendor that you speak to has a totally secure system, and I am sure that I could not hack in – but nevertheless, I am sure that someone else could. Many hotels are installing wireless service both in public areas as well as conference and banqueting, and this will be a revenue generator. However, hoteliers should be aware of potential liabilities. Within the past two to three years we have seen large advances in the technology that is available to the hotelier, and without a doubt, we are also seeing that those hotels with the technology are rightly marketing this to their advantage. Guests are requesting hotels with HSIA. This facility alone has become a differentiator for hotels. As with telecommunications in the United States, let the buyer beware: There are many companies all selling you the very best product at the very best price. Remember if it sounds too good to be true, it probably is. So check out the claims of the companies, ask for references and you should always consider getting professional advice.
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Contact:
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Associate Editor Hospitality Upgrade magazine and the Hospitality Upgrade.com website http://www.hospitalityupgrade.com [email protected] |
Derek Wood is the managing
director of Derek Wood Associates Ltd., an independent hospitality
telecommunication consultancy. Derek is regularly asked to speak at
hotel
telecommunication conferences throughout