Hotel properties have suffered from a dramatic loss in guest service revenues starting with the in-room telephone, high costs for low rates of bandwidth to dwindling pay-tv take rates. Device mobility has allowed for guests to continue to circumnavigate the ways hotels can charge for sponsored technology services using everyday applications such as Skype, personal Wi-Fi hotspots and entertainment services such as Netflix and Hulu. This is leaving hotels scrambling to find superior ways to introduce new applications that can capture the guests’ attention and accelerate immediate purchase decisions.
This wide range of device and application adoption means that hotels need to compete for their guests’ attention like no other in order to make up for lost revenue with immediate purchase options and to also consider subscription-based applications and points of sale which can lead to residual-based revenues beyond the guest’s hotel stay.
Very few technologies have changed the fabric of American life as much as the mobile phone. Twenty years ago only a handful of business types carried mobile phones, now nearly all of us have one in our pocket. But what’s even more important is that the cell-phone has evolved into a small computer and integrated communication center that we carry around with us. Mobile technology has become an ever present force in our lives and has rapidly changed the way we interact with each other and the world, and how hotels can interact with and drive new revenue channels from their guests using mobile devices.
Nearly every consumer business in the world is being affected by the rapid proliferation and development of mobile technology. The hotel business is no different. Potential guests are increasingly using mobile technology to find hotels, check on the availability of rooms and to read reviews. Once they check in, guests expect to be able to continue using their mobile devices, tablets, and lap-top computers to do business, keep in contact with loved ones, and to be entertained. What was once considered an amenity offered primarily for business travelers is now an absolute must.
Mobile technology, in particular, lends itself to in-location marketing tactics such as geo-targeting, geo-fencing and beacon technology. The advantage to these technologies is that they allow the marketer to reach guests directly on their mobile devices with customer service-focused messages and alerts while inside or near a hotel.
Studies from Hotel Internet Services show that when asked what devices guests normally carried with them on their travels, close to 76% carried smartphones, 68% laptops and close to 62% tablets. Hotel guests are connecting multiple electronic devices to the hotel internet network and these devices can be tapped and targeted for new ways of improving guest revenues.
This intense need for connectivity has created three primary dilemmas in the hotel business. First, the proliferation of mobile and other wireless devices has overwhelmed most hotel networks. Second, the wide variety of applications and streaming options available to consumers means they are using traditional revenue streams such as the in-room telephone, hotel video-on-demand services less frequently. Thirdly, guests are increasingly used to finding information and solving problems via their smartphones.
The Video Streaming Revolution
One solution to this dilemma has been to produce a complete in-room entertainment center, which allows the guest to access and select programming from a channel guide, listen to their own music or even stream their own content on the room’s television. With a converged IPTV system, guests are able to enjoy their own streamed content through a secure connection. The hotel benefits by being able to offer greater customer service without the expense of additional wireless internet structure and at the same time being able to offer hotel amenities and services.
IPTV Services such as BeyondTV enable wireless streaming from any device – iPad and iPhone, Android tablets and smart phones or laptops to the TV in the room. Users can view their own videos, movies and photos or listen to their own music. Guests can also view their own subscribed content like Netflix, Hulu, Pandora, etc. directly on the in-room entertainment center. Tying right into the hotel property management system, the IPTV system works in tandem with the guests’ mobile device to deliver all hotel amenities including housekeeping, in-room dining, spa, valet, transportation, express check-out and other concierge services.
To date the most frequent uses for mobile technology have been focused on attracting guests to the hotel and then offering them premium services during their stay. But some services are beginning to think outside of the box and discovering ways they can continue to earn revenue after checkout. For a number of years, on-demand video offerings were a steady source of income for hotel operators. But with so much free and streaming content available around the internet, this revenue stream has dramatically shrunk over the years. Several innovative companies have stepped into this arena to begin offering premium content to hotels aimed at reclaiming lost earnings.
One way to do this has been to offer ancillary applications and content services guests can use in every-day life. The applications and content introduced from the hotel-side through these channels can be accessed through the hotel Wi-Fi and can also be accessible after the guests’ hotel stay which allows for the guest to generate revenue from the property just form the word-of-mouth introduction.
Another way companies have tapped into this area is to offer streaming services that the customer can continue to use after they leave the property. These products have followed a couple of basic patterns, the first being to create a service similar to Netflix that can be used on the guest’s laptop or mobile devices. Once they have used the service on-site they are given access to the application off-site. Some of these types of services have offered traditional movies and television programming while others have specialized in boutique-type sales tailored to the hotel environment.
There’s an App for That
There’s more like 50 apps and more for that. So many different social media sites and applications, different destinations for video streaming and other forms of entertainment. Mobile applications are so segmented into their own device-specific universe that it can be tough for network operators and IT managers to decide which apps they can provide ease of access to when offering a technology platform accessible on the go.
In a study conducted by Hotel Internet Services in 2015 studying “the age of guest bring-your-own-device” to see what applications hotel guests and hoteliers alike found most useful- Facebook, ITunes, YouTube, Netflix and Pandora ranked the highest while many apps such as ESPN, Pinterest, Spotify, Snapchat ranked on the low-end of the spectrum.
On the horizon it is easy to see how a single app could allow guests to make their reservations, automatically check-in and use their phone as a key to their room. Such an app could also be used to find local attractions, make dining reservations and even order tickets for local shows. Hotel services such as laundry, room-service and premium entertainment options could all be ordered directly from the guest’s mobile device. Furthermore, hotel chains could provide premium subscription services, directions to their local hotels, and even incorporate airline reservations and other services into a single package.
What Are the Risks Involved in Converged, Connected Guest Services?
To the unnaturally tech-savvy eye, converged application services offering ease of use through mobile applications is a luxury amenity. These combined services can be scrolled through, tapped on and zapped to for a wide variety of interaction with networked services and devices.
The dark side to guest convergence through multiple connected network devices allows for massive vulnerabilities for which guests are able to once again circumnavigate and duplicate access without paying for a service, and to also cause harm to a network by exploiting holes in network security allowing for compromised data ranging from vital guest information, credit card details, and administrative network logins and access to network files.
Let’s look at the ability to store key data which allows you to unlock your room from your phone. Sounds like a great luxury right? This service interfaces with Bluetooth/RFID technology to authorize the door to unlock once the device is in close proximity. Spoofing tools have been used by hackers to deter the growth of widely adopted guest-services and hotel technologies.
Screen-casting is another type of technology allowing for a hotel guest to cast their screen from a phone or tablet to the hotel TV using the hotel’s connect network. While offering a high-end solution to allow for guests to watch their own content on the location’s TV, guests are also using the hotel internet to download and stream movies illegally and to have the convenience of watching pirated content on the TV using the screencast functionality. This could be considered a “double-whammy” problem as the guest is using the hotel network to access illegal entertainment offerings, and to watch the illegal content on the TV, both avenues the hotel created for legitimate access.
The risks in offering such convenience to hotels have far outweighed the benefits in most cases, it should be widely understood that absolutely no technology is bullet-proof from attacks and vulnerabilities. Service providers must work with network operators and technicians on a local level to troubleshoot and stress-test their service offerings to ensure they are responsive to the device and are also secure from the most likely vulnerability scenarios.
Customers not only demand connectivity but they also expect it to be available throughout the property and to be as good as what they have at home. This means that hotel operators must give more attention to the strength of their internet signal in every area of the building as well as outdoor areas surrounding the property. Couple this with the fact that 46.3% of those surveyed said they use streaming services, such as Netflix, when traveling and it is easy to see why operators are being forced to rethink the internet service available in their properties.
These statistics demonstrate just how important connectivity is to customers today. Every major indicator points to connectivity being of even greater importance in the future. The largest generation in American history (the Millennial) are just now entering into the market place. Over 77 million strong, this generation is the most technologically savvy and dependent generation in American history. They have grown up with mobile technology being their primary source of information, social interaction, and entertainment. As they become a larger part of the hotel guests, the need to embrace mobile technology will skyrocket.
Addressing the Demand, Providing a Service Guests Will Use
Hotel managers and executives must give more attention to making sure their networks are ready to handle the increased demand by increasing bandwidth and adding additional network coverage, many properties are now implementing gigabit networks for their individual properties as well as beacon technologies to interact with their guests. Hotels that lack adequate internet bandwidth to handle the huge number of mobile devices and laptops being operated in every part of their property will be at a huge competitive disadvantage.
One way hotel operators have cashed in on the high demand for hotel Wi-Fi is by charging premiums for faster connectivity. 64.6% of hotel customers report their number one complaint with hotel internet service is lack of speed. But what is most interesting is that 53% say they would be willing to pay for faster Wi-Fi speeds.
Upgrade packages can be used to upsell the guest on other services such as offering a complementary movie for a subscription-based video on demand service or advertising the package’s ability to seamlessly play their Netflix or Hulu subscriptions.
From Budding Technologies, to Wide Spread Mass-Adoption
As mobile technology takes over, device specific application services will become expected and will not be an option in the future. As technology continues to advance and mobile devices become more powerful, their proliferation into every aspect of our lives will only grow. We cannot expect that this will not fundamentally transform guest expectations.
Location focused strategies can be used in a number of new and exciting ways to attract guests to hotel properties, especially as technologies evolve and become more widely adopted by hotels and their guests alike. Hotel operators who get in front of this curve to use their existing infrastructure to diversify and break out of the old technology trends will be in a much better position to compete than those who do not. The first step that most operators need to take is to take a serious look at their connectivity and make sure that network coverage and high-speed internet bandwidth is available to every customer in every part of their location. Once this basic infrastructure is in place they can begin to look for the content and service applications that will meet the greatest number of needs for their customers, as well as implementing avenues of quick point-of-sale and sell-through using digital-based sales technologies in place of cumbersome onsite equipment and point-of-presence.