As TV offerings in the living room and the guest room continue to diverge, the gap between them keeps widening. The majority of today’s hotels offer a TV service that doesn’t support two-way interactivity, and has therefore ceased to be a service differentiator.
In the age of Bring Your Own Device (BYOD), hoteliers can maintain their guests’ interest in their TV services only if they offer an experience that matches their expectations.
Over the past few years, however, there has been no real innovation helping hoteliers to overcome this problem.
Now, harnessing guest demand for robust Wi-Fi connectivity, it is possible to develop an attractive solution that offers hoteliers a much more realistic and far less cost-intensive approach to innovation in this critical service area for hotels.
The living room vs. the guest room
Media convergence arose as a concept in the 1990s, and it has certainly become much more real and tangible over the past 20 years. Most of us are now used to watching videos online and having the home TV connected to the Internet. In parallel with the media usage has been an evolution in transmission and delivery technologies. Telecom operators have invested in IP-network based TV offerings that can offer interactive entertainment through the client’s existing phone lines (DSL) and more recently also through optical fibre.
Multi-media entertainment spaces in the home
Most living rooms are now convergent multi-media entertainment spaces; the home TV solution normally comes with an interactive program guide, options to mirror content from the mobile devices on the TV screen, and many more features that personalize the viewing experience.
In the hospitality business, the spread of IPTV has been less spectacular; an estimated 85% of European hotel properties still use coax cabling for TV services. Structured cabling (Ethernet), the ideal cabling type for IP-network based television is normally found in new builds only. ‘IP over coax’ has been deployed many times, but it comes with a cost on both the TV head-end and the media converters. Adding to that, hoteliers have realized that Pay-TV / Video-on-Demand offerings cannot absorb the cost encountered. Finally, re-cabling is not an attractive option either: the cost and the risk associated with such a project can be prohibitive.
Hotel TV services NOT aligned with guest expectations
As a result, the majority of hotels (including a large number of business, and even boutique and luxury hotels) have not been able to align their TV service with guest expectations arising from the home entertainment experience. A typical hotel TV system offers not much more than a static menu of TV channels, perhaps complemented by a hotel services directory. The user interface is basic with no or little hotel customization, and hoteliers cannot communicate with their guests based on their actual interests and needs.
Such lack of innovation is a serious handicap in an industry whose key competitive differentiator is service quality.
Hotel IPTV revisited
Since 2010, Swisscom Hospitality and a range of other TV solution providers have developed hotel IPTV solutions using a server, which runs the application (the user interface, the PMS integration, etc.), and an IPTV head-end for the multi-casting of TV channels and the storage of on-demand videos. A number of hotels have adopted such setups to offer their guests a contemporary, interactive TV experience comparable to a living room entertainment experience. However, such setups are rather complex and costly. For a 40-bed room hotel, the investment appears disproportional.
A new route towards meeting the guest’s entertainment needs
Changing technologies, evolving guest expectations and hoteliers’ desire to make better use of their technology investments have prompted us to explore a new route towards meeting the guest’s entertainment needs. The main developments that have guided our thinking are
(a) The declining interest in traditional Video-on-Demand (VoD), which goes along with
(b) The rise in guests bringing their own content to the hotel; and
(c) The enormous value that guests (and staff for that matter too) attribute to Wireless connectivity.
Declining interest in hotel VoD services. Some years ago, room telephones became a cost factor rather than a revenue generator. Today, it looks like VoD is the next candidate. The cost for buying and maintaining an onsite VoD server, plus the content license fees add up significantly, and are not balanced by adequate revenues. According to PKF Hospitality, the annual movie-rental revenue per available room in the United States plummeted from a high of around $275 in 2000 to about $125 in 2011. This number has likely dropped further thanks to the phenomenon known as BYOD (Bring your own device).
The rise of BYOD. Today’s guests arrive with their own content and online subscriptions; most of them have a clear idea what they want to watch after (or instead of) the 20-minute news update on BBC, CNN or Al-Jazeera. Popular subscriptions include Amazon Prime, Netflix, Hulu, Now TV, etc. YouTube videos are generally free to watch, although the company has nurtured speculation that it is planning to launch a paid, ad-free subscription service.
No matter what the next competitive developments are going to be, content is going online. Hoteliers that enable their guests to connect to the Web’s unlimited entertainment resources will offer a more varied and personal entertainment than any hotel-designed and however well-intentioned program menu can ever be.
The increasing importance of Wireless connectivity. One important implication for the above is the data capacity of the hotel’s wireless network. Five years ago, you may have had 10% of guests going online with a single device to perform a limited number of tasks (email, web browsing, e-banking). Today, it’s more like 50% of guests going online with an average of 2 devices, doing all kinds of things from videoconferencing to streaming media. Cheap cloud storage provided from Google, Apple, Microsoft and others invites guests to use the Internet for their personal videos, music and documents.
Guest demand for bandwidth has climbed sharply, and it continues to do so. Swisscom Hospitality network data (collected from roundabout 2,000 hotel networks worldwide) indicates that the overall volume of data transferred by the guest has almost tripled in one year.
Spiking demand is placing an enormous burden on many hotel Wi-Fi networks and creates pressure on hotel operators to invest in modern, scalable infrastructures. Guest reviews on Tripadvisor and the emergence of dedicated Wi-Fi ranking websites such as www.HotelWi-Fi.com witness the new interest in hotel Wi-Fi.
Connectivity is king – and so is your coax network!
This leads us to the following question: now that hotel operators invest in better Wi-Fi networks, and content is going online, why not use these networks for a better TV experience, as well?
From the viewpoint of a network operator, it doesn’t make much of a difference whether you connect a Smartphone or a TV set – either device can go online as long as it has the ability to send and receive data via Internet Protocol (IP). However, for the guest watching an HD video on a 42’’ TV screen, it is definitely more enjoyable than following it on a handheld device. In fact, we believe that many guests would be quite thrilled to watch their preferred content on a large flat screen in the exclusively personal setting of their guest room.
Finally, the TV is a powerful communication platform for hoteliers, which they can use for the promotion of their core asset being the hotel brand, as well as other purposes such as promoting their services (or those of their partners) to the guest.
A new, innovative solution
We therefore think that a new, truly innovative solution will arise from the optimal utilization of the existing networks and hardware assets in the hotel:
The Coax network will, without any data conversion added, continue to deliver up to 100 TV and radio channels from any digital source: DVB-S/S2 (Satellite), DVB-C (Cable) and DVB-T (Terrestrial). The existing TV head-end (the master facility for receiving TV signals) will continue to process and deliver the different types of signals directly to the guest room TV, up to full-HD quality.
The Wireless network will add guest functionality that to date has been reserved for more expensive, IP-network based solutions.
Meanwhile, the Internet Gateway (which hosts all functionality related to the hotel’s Internet access services) can take over the application from the TV server.
In summary, the real innovation lies in combining existing technologies that the hotel operator already has or is looking at anyway.
Screen sharing
An attractive add-on is screen sharing, which enables guests to stream content or even mirror full screens along with its applications from their own personal devices on the TV screen. Depending on the device used, screen sharing works through a point-to-point connection between the guest device and the TV (as is the case with recent Android and Windows phones), or it uses the hotel’s Wireless network (for iPhones and iPads).
There are two important requirements, however: the first is a connected TV screen that supports the corresponding screen casting technologies known as Miracast (issued by the Wi-Fi Alliance) and Airplay (by Apple). Second, the TV provider must be able to embed this functionality in the user interface so the guest does not have to experiment on his own with his device and the TV set.
Targeted communication
Along these lines of changing guest behaviour, hoteliers should also look at their information pages and service promotions from a different angle. Some hotels offer dozens of extra guest services, whereby only one or two may be relevant for the individual guest.
The new buzzword is targeted communication, and the guest room TV is probably the single most important touch point for the hotelier with his guests. Here hoteliers can make good use of their guest profiling and information on guest preferences. There is nothing more valuable than information, when relevant to the recipient.
Conclusion: a modern communication platform for the hotel
As TV offerings in the living room and the guest room continue to diverge, the gap between them keeps widening. The large majority of today’s hotels propose some form of linear, digital TV service. With its static design and its inability to support two-way interactivity, it’s hardly a service differentiator. Over the past few years, there has been a remarkable absence of true innovation whilst solution providers have been proposing relatively complex, costly, and not necessarily satisfactory IPTV offerings.
Harnessing the increasing guest demand for robust Wi-Fi connectivity, we believe that an attractive offering can be derived from a Wireless IPTV offering that uses the hotel’s existing technology assets: first, the Coax network in its native (unchanged) format and the existing TV head-end; second a modern, scalable Wi-Fi network; and third, a next generation Internet Gateway.
Combining these existing assets, we can propose a much more realistic (since far less cost-intensive) approach to innovation in this critical service area.
The ultimate intention of Swisscom’s initiative is to bring back the value of hotel TV for a more targeted guest communication. In 2008, a guest survey conducted by EHL found that 81% of guests turn on (or are exposed to) the TV within 10 minutes of their arrival at the guest room. Today, as they come equipped with their personal devices, this number is likely to be lower.
In the age of BYOD, hoteliers can maintain their guests’ interest in their TV services only if they offer an experience that matches their expectations home away from home.
About Swisscom Hospitality Services
Swisscom Hospitality Services, a division of Switzerland’s leading Telecom operator Swisscom (Switzerland) Ltd, designs, implements and manages converged hotel IP networks to offload hoteliers from the increasing IT complexity and to enhance their guest’s technology experience. Swisscom Hospitality is the market leader in EMEA and key challenger in North America for industry-leading High-speed Internet Access, Conference and TV solutions, serving all key hotel chains and many flagship independent properties.
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Since June 2015, Swisscom Hospitality has joined Hoist Group – the leading hospitality provider in the EMEA region
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