Originally published in AAHOA Lodging Business, February 2009

Tuning into Technology

Is your hotel ahead of the game or keeping up with the pack?
By Dan Marcec

There most certainly has been a vast upgrade in television technology in the hotel industry during the past few years. With technology moving so quickly, what’s popular might not be what brings in the best return on investment or the most guest satisfaction. In other words, the trends in television technology seem to be outpacing the trends that are making their way to guest rooms. Could this eventually spell trouble when it comes to guest satisfaction?

For the most part, hoteliers in the economy and mid-scale market segments are gravitating toward 32-inch LCD screens, according to both Dave Lingor, vice president, lodging, for MDM Commercial Enterprises, and Dhar Patel, director of sales for Hospitality LCD. These updates come in response to the technology that is present in many American homes as well as to coincide with the upcoming digital deadline on February 17 (see sidebar for more details).

A Sharp LCD TV offered by Hospitality LCD.

However, many brands have held off to some extent in mandating a move to HD LCD products until 2010 due to economic conditions, according to Lingor. Therefore, as Patel explains, some properties are able to hold off from purchasing digital TVs, utilizing conversion boxes to downgrade the new digital signal for use on their older televisions.

Hoteliers are aptly concerned about the ramifications that dropping occupancies and RevPAR will have on their bottom line; therefore, cost is a major factor when it comes to discussing the possibilities for new technology. “We’re definitely in a ‘wait-and-see’ atmosphere right now,” says Eli Mechoullam, president of MasterVue. “The industry is driven by budget, but what hoteliers aren’t seeing is that an investment in new television technology actually can generate revenue.”

Mechoullam’s point is multifaceted. First, having something that competitors don’t have will drive bookings. New multimedia televisions include not only the high-quality, high-definition picture, but also they have built in DVD/CD, USB and memory card plug-ins. Each of those has unique functionality for business and leisure travelers alike: leisure travelers can watch their favorite DVDs or pop in their digital camera memory cards to look at the pictures they took that day on a big, LCD screen; and businesspeople can test out a big presentation on a large screen with their data saved on a USB flash drive. All of this, of course, comes without having any extra appliances in the room.

Looking forward, multimedia TVs will be compatible with IP technology as it continues to advance. This technology allows guests the ability to utilize all the functions above, surf the Internet, and even communicate with the front desk and room service. Oftentimes — especially for leisure travelers — bringing along a notebook computer can bring a host of headaches (carrying it on an airplane, concern for it being stolen or broken, etc.), but with IP technology on their TV in the room, they don’t have to bother if all they need to do is check their email or browse local amenities while they’re away.

A multimedia television in detail.

In addition, some new multimedia televisions have a built-in advertising functionality. This can produce additional revenue for a hotel by developing partnerships with local amenities to advertise their services. Imagine the guests’ ability to see what’s on the hotel’s doorstep, coupled with the ability to call straight to the front desk to make reservations at a local restaurant, for example — a win-win for both establishments.

All of this sounds well and good, of course. But the bottom line is, well, the bottom line. A technology upgrade for a 100-room hotel that already needs to cut back on costs seems superfluous. Yet, at the current time, there hasn’t seemed to be much of slowdown in television purchasing.

“Most people that have replaced or are replacing their televisions had the money set aside for their project or the financing set up so it hasn’t been a issue,” says Lingor. “If anything, it may increase people using leasing options, but we really haven’t seen a downturn in our business.”

Patel agrees. Even though lending requirements are more stringent and equity ratios are shifting dramatically, hoteliers can turn to equipment financing if they can’t get a loan outright. “We have used equipment financing for years and have our own internal lending,” he says. “Rates are higher than real estate financing, but it has several tax advantages, easier approvals and doesn’t affect relationships with current real estate lending partners.”

With technology moving so quickly in the private sector, it’s certainly difficult to keep up, so to speak, and the last thing an aptly cautious hotelier wants to do is spend a large sum on a television that’s going to be obsolete in another 2 years. That said, if they need to upgrade anyhow, looking to stay ahead of the curve and giving the guests something they can’t have anywhere else right now could be a worthwhile investment. Furthermore, the newest amenities maintain the capabilities to be compatible with what’s just around the bend.





To contribute an article to Lodging Operator:
email lodging@francepublications.com.

© 2009 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For more information on reprints of this article contact Barbara Sherer at (630)554-6054.