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Is there a future for in-room entertainment?

19 April 2011 by
Is there a future for in-room entertainment?

With in-room film revenues declining due to guests using their own laptops to watch downloads,Daniel Thomasreports on what the future may hold

While improvements in PC technology and wireless communication systems have led to a decline in in-room film revenues for hotels as guests increasingly use their own devices to download content, it remains too early to sound the death knell for in-room entertainment, experts insist.

For one thing, limitations on bandwidth mean that if a number of attempt to download content at the same time, they will face frustration, while the quality of streaming from a laptop to a TV remains patchy.

Mark Budie, technology director at hotel communications firm Quadriga, says: "There is still a demand for content and the market for that content is far from dying. Hotels and suppliers need to be able to evolve their offerings in order to cater to modern content and infrastructure demands to secure those future revenues."

One new hotel which is betting the house on in-room entertainment is the Eccleston Square hotel in London's Pimlico, which opens its doors in May.

The £6.5m hotel, in a refurbished Georgian townhouse, will feature 3D-TVs, Blu-ray players and iPod docking in bedrooms, while bathrooms will feature heated floors and mirrors with hidden TVs and a rainfall shower with touch-button opaque glass. And earlier this month, the hotel signed a deal with Apple that will see the new iPad 2 installed in every bedroom, a first for Europe.

For Alex Congleton, general manager at the Ecclestone, the primary driver for investing in so many hi-tech services was negative experiences the management team had suffered in other luxury hotels.

"Poor heating, ventilation, beds, ergonomics, poor or no tech, outmoded TVs, awkward bathrooms; the list goes on," he says. "The aim was, therefore, first and foremost, a practical one; the owner simply believed it was possible to address many of these deficiencies."

Ensuring there was enough bandwidth and that the multi-system communication was "fluid" were the main challenges in implementing the technology, according to Congleton.

"Making sure that the infrastructure and our media connection to the world is of the highest capability to deliver the technological experience we are creating in a fluid, easy and fast service is the key challenge," he says. "To do this, the network backbone and property connection is fibre optic allowing us to tap into the highest speed connectivity available."

For other hoteliers thinking about going down the hi-tech route, Congleton says the technology must "always be easy, clear, fuss free and easy on the eye, and must be very visible and defined".

The Ecclestone strategy highlights how the in-room TV has evolved from being just a box through which to watch films and listen to the radio, to a means of pushing information about hotel services and facilities to guests downloading content and providing an alternative revenue stream.

The next logical step for in-room technology is to tap into the growth of social networking, according to Budie. "There are potential benefits of this type of application to hoteliers," he says.

"Not only would hotels be providing guests with superior services and social TV content, but they potentially have the opportunity to build demographic profiles - subject to the usual data protection legislation - that could complement data from their loyalty schemes, providing more opportunities to increase guest satisfaction and revenues."

five things you need to know about in-room entertainment

1 What is on offer? The hospitality industry has a number of options available, from very basic Freeview, right the way to sophisticated and expensive IPTV systems offering Wi-Fi and interactive digital TV.

There are also some new kids on the block - including Netspot Life, now available through Hospitality at Comet - which are able to offer movies and games on-demand, full interactive internet, open office products and Wi-Fi, all in a non complicated "plug and play" way.

2 How do I decide whether I need it or not? Technology is a question of budget but also a matter of which services an operator would like to offer their guests. A buyer has to be mindful when purchasing new televisions. A stock of simple questions such as: Does it have a HDMI cable? Is it HD ready? What power consumption does it require? All these are important to future-proof the purchase as there are systems available now which can operate through existing TVs.

3 What are the challenges of implementation? Disruption to the infrastructure is a key one; rewiring is common as well as installation of TV aerial head-end equipment. Systems which don't require these are welcomed. Also, integration into existing systems such as property management software and Wi-Fi can be challenging.

Upselling opportunities such as room service, in-house offers, group promotions as well as revenue streams gained from advertising, movies and games on-demand, are real and should be exploited.

4 How much will it cost me? Cost can make entertainment and connectivity systems far out of reach for many hotel owners. A system which offers everything can run into the hundreds of thousands of pounds.

The key aspect here is that system cost should be made clear very early on in the negotiation process. Pursuing leasing options can be beneficial as these are available from as short a term as two years.

5 What kinds of revenue and margin can I make? There was a time when in-room movies were the "Holy Grail" of revenue streams. Owners made a lot of money out of charging a premium price to watch what was a mediocre offering. Nowadays, with 3G, the internet, large Freeview channel availability and cheap DVDs, an owner has to think outside of the box to make technology pay. They need to look for systems which offer a number of revenue generating opportunities.

There are now systems which can offer movies on demand, games on demand, Wi-Fi and access to office programs as well as the in-house property management system. Advertising partnerships are also in place with some suppliers.

Source Nick Youle, business development manager, Hospitality at Comet

case study de vere

The De Vere Hotels group hasinstalled 13 new 60in LG hotel TVs in its guest rooms as part of a move to upgrade its in-room TV and information services.

The 13-strong group's existing TV facilities had been "sufficient" but the wider communications needs of guests - as well as the operational opportunities such as cross-selling leisure facilities- meant it had to look ahead to capitalise on these possibilities, says Linda Matlin, buyer of in-room facilities at De Vere.

The installation, through hotel technology reseller Techzone, has allowed the hotels to programme each TV to become the focal point of the service provision, through a portal offering up-to-date weather information, local restaurants, road conditions or flight times.

The sets can be programmed to both offer and accept bookings and real-time views of the pool or other facilities, allowing guests to choose the least crowded time to visit.

They can also be used to list room service menus which reflect that day's fare and prices, without the usual printing costs and delays of hard copy menus and price lists.

Matlin says: "We are already using the TVs to run advertisements promoting our hotels throughout the country. The chances are that if someone is enjoying the facilities at one De Vere hotel, they will appreciate what is on offer at another - if it is presented to them attractively, whilst they are already in the De Vere environment."

The group is now looking at ordering 600 of the 32in screens and another 30 of the 50in and 60in LG hotel TVs.

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