Hospitality Communications Coming Off Hold
There are few buildings with more phones per square foot than hotels. However, don't assume that hotels make good telecom prospects – they aren't, or at least they haven't been recently. But that is beginning to change.
A decade or two ago, the phone system was as lucrative to a hotel as room service. Although the room phone never looked like a payphone, appearances were deceiving. Hotels charged for local and long distance, and both were frequently used. Then, long before BYOD hit the enterprise, hotels started experiencing a different aspect of the BYOD phenomenon. First, guests brought their own calling cards, and now they bring their own phones. The defiant few who still use hotel phones are resentful when charged for it.
As such, the hotel phone system switched from profit center to liability. Hotels began sweating their assets – and the phone system's life was extended well beyond anyone's initial intent. The hospitality industry ignored the new technologies, but to be fair, VoIP didn't offer hotels many benefits. IP phones cost more than analog phones and offered little in terms of cost savings. For example, one of the big enterprise drivers were simplified moves, adds, and changes –which occur very rarely in hospitality.
Enterprises and hotels were previously more aligned with their objectives. They concurrently embraced voicemail and even touch-tone dialing. Today, hotels and enterprise telecom buyers have few shared priorities. The enterprise is excited about soft phones, cloud, and UC. The hospitality industry is primarily concerned about safety, security, and the guest experience; replacements are primarily justified for cost savings rather than feature upgrades.
However, overall growth in the hospitality industry has begun to pick up again. Intercontinental Hotel Group reported that revenue per available room increased globally by 4.4 percent in 2013 and by 6.6 percent in the Americas. The industry is now in its fourth year of recovery and new construction is back. In 2013, Hilton reported it added 1,000 hotels to its portfolio over the past several years.
How are Telecom Vendors Responding to Increased Demand?
That depends on who you ask. Established premises-based vendors NEC and Mitel leverage the onsite experience, while BroadSoft offers a pure-cloud solution for the hospitality industry. NEC proudly lists many of the world's largest hotels on its customer roster. Mitel claims it has the largest installed base within hospitality. BroadSoft recently announced a strategic acquisition of SDD to facilitate its ability to serve hospitality.
Mike Gray, Senior Practice Manager of Hospitality at NEC, explained that the drivers for enterprise and hospitality are similar, just with different outcomes. The key drivers he was referring to were to minimize the technology footprint on premises as well as capital expenditures. Since the hospitality industry's preference for analog phones restricts options, NEC opted to repackage its premises-based solutions.
NEC recently introduced the NSP or NEC Solution Platform, which is a "Hotel-in-a-Box" solution that includes the new SV-9500 communications platform (configured with hospitality options), NEC UM4730 messaging suite, integrations to property management systems, and UC and mobility features for staff.
Gray said that hospitality requirements are inherently local, as most calls are analog and kept internal. Also, most hotels integrate the communications platform with on-site property management systems and other applications. As with enterprises, hospitality also wants to shift toward OpEx models, so NEC offers new service solutions, including rental programs aimed at the hospitality vertical.
For its part, Mitel extended its onsite MiVoice hospitality platform to enable a hybrid option. According to Jeff Nolan, Vice President Vertical Markets, the same Mitel 3300 ICP AX can be used as a standalone appliance or configured as a gateway based on the licensed software. When it is used as a gateway, the call control moves to Mitel's hosted hospitality service called MiCloud Hospitality. The service can be used without a gateway, but Nolan acknowledges that most hotels do prefer to keep room phones analog. In this hybrid deployment, the gateway keeps many functions local, including wake-up call services, 911 routing, and internal calls.
Nolan said most properties are still using onsite property management systems, but some cloud-based models are emerging. He said the integration between these systems are now IP, so it can take place on premises or in the cloud. Mitel expects to see more cloud-based property management and communications systems in the future – especially for multi-site properties.
BroadSoft sees hospitality as a next segment destined to migrate to the cloud. BroadSoft recently acquired Systems Design and Development (SDD), a service provider which specializes in large hotels and resorts; SDD had repackaged BroadSoft's UC-One into a product called Jazz Fusion for hospitality. Now, BroadSoft is taking this as a wholesale service to its global base of service providers under the brand of UC-One Hospitality. The service allows service providers to bundle connectivity, minutes, UC features, and property management integration. The approach offers the additional benefit that service providers can skip the capital and human investments otherwise required to adequately meet the unique needs of the hospitality industry.
BroadSoft specifically positions UC-One Hospitality to best serve organizations that have multiple locations and small IT staffs. The service is intended as leveraging OpEx and being evergreen, and capacity can be adjusted up or down with seasonal demand fluctuations.
Read about the future of the hotel room phone on the next page