technology, hospitality, and plumbing…

The High Cost of High Tech

In General on April 12, 2014 at 11:40

And even higher cost of underwhelming your guests with dated technology.

Checking into a hotel, the staff on the desk informed me that the minibar was “pressure-sensitive,” so if you took something out and then put it back, you’d still be charged. I couldn’t help but wonder why the minibar was smart enough to know when I had taken a beer, but not clever enough to forgive me after my moment of weakness.. I nodded in acknowledgment, thanked him politely and then shuffled off to my room, pondering the changes in technology and human behaviour, and how they affect the bottom line.

Hoteliers face the dual challenge of evolving technology and the rapid change in customers’ demands. STR Global estimated that in 2013 there were 17.5 million hotel rooms around the world. On this scale, even small changes in guests’ technology expectations can have a huge impact on the bottom line; hoteliers need to strike the delicate balance between giving guests what they want, at a price the hotel can afford.

Wi-Fi is a prime example. For a long time, guests would complain profusely when, after spending $250 on a hotel room, they had to spend another $20 for Wi-Fi. The added expense could result in a true failure in terms of how a hotel (and a brand) is perceived. Hoteliers were wary, firstly, of losing a new revenue stream, and secondly, of spending money on a robust Wi-Fi network. Guests have become used to having a free router with Wi-Fi at home, and because of this, they think that Wi-Fi is cheap and easy. However, at a larger scale it is not: a decent network will start at $10,000 for a 200-room property. Nonetheless, fast, reliable Wi-Fi is a top requirement for today’s travellers; just look at the Wi-Fi related comments on TripAdvisor. It is one highly visible indicator of the technology changes that are taking place in the hospitality industry.

This demand for Wi-Fi has been driven in large part by the new generation of cheap, powerful phones and tablets that people carry everywhere. Having become so addicted to these devices, people (me included) expect fast internet wherever they are, especially when they travel overseas and want to avoid the often exorbitant roaming charges for data. There is an expectation that hotels will be oases of connectivity. On the plus side for hotels, nowadays there is little need to buy (and maintain) desktop computers for guests to use: at one time it looked like hotels would have to fork out massively on providing this hardware, especially for business travellers looking travel light. But the demand has vanished at the same rate as mobile devices have caught on.

Recent years have been tough for hoteliers with other expensive upgrades and updates needed to keep up with demand and remain competitive. The most visible example is the large, flat widescreen TV that replaced the old CRTs. Guests do not want to spend the night with a TV that looks like a giant goldfish bowl, a relic of a past era.And top hotels, no matter how moderately priced, want to provide guests with an atmosphere as comforting as their home, only better. Plus, LCDs have other benefits: being slim, they take up less space, making the room feel larger; and the energy consumption on average is less than a third of a CRT. When multiplied by a hundred or so rooms, that adds up to a tidy saving.

Unfortunately, other changes haven’t had such obvious silver linings. The iPhone revolution saw hotels putting in docks and connectors specifically for Apple devices: the 30-pin connector used to connect and charge iPhones, iPads and iPods had been around since 2003 and had become ubiquitous. But Apple, always capricious, changed the connector size and shape in 2012, instantly making the old docks and connectors obsolete. Now, the old docks serve as an indicator, perhaps unfairly, that the hotel is out of date.

Beyond these examples of guest-facing technology, there are equally huge changes taking place behind the scenes — especially in the core software used in day-to-day business. Some newer hotels are skipping the legacy Property Management Systems (PMS) in favour of cloud-based services. A cloud PMS built on internet standard technologies has the benefit of being available across a wide variety of devices, which allows for things like check-in via tablet. And they have fewer initial costs (a monthly fee negotiated on a multiyear deal). Now that the internet is a commodity to be expected, like electricity and water, implementation is far easier than in the days of yore.

But the legacy PMS still has many advantages, not least of which is the deep pool of hospitality talent that are familiar with the system. A steep leaning curve can be a costly mountain to climb. Plus, cloud PMS are still evolving rapidly, and nobody wants to be on the wrong chair when the music slows down. There is both an opportunity (new features and more flexibility) and a risk (no clear winner has emerged, so the chance of finding suitable staff with experience in a particular CMS may be tricky).

As if the hospitality business didn’t have enough risks to negotiate, the exponential acceleration of technology is quickly rising to the top of the heap of hazards. With both hardware and software evolving at light speed, finding the sweet spot between lagging at the back of the pack and decapitating yourself on the cutting-edge requires staying abreast of all the latest developments. Perhaps what we need next is a hospitality robot sensitive to all the pressures of giving guests a high-tech experience without breaking the bank.


This first appeared in Issue 2 of Status QUO, available on the App Store for iPhone and iPad:

2_StatusQUO-Print-iPad-iPhoneAnthony Green — March 2014


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