When was the last time you were in the same room as an analog phone? For many of you, that would have been your last hotel stay. Hospitality is the vertical that IP forgot.
The hospitality sector should be an attractive vertical for telecom given its requirements for high-density phone coverage, specialized and understood needs, and global scope. Just one big problem -- it has been reluctant to embrace technology from this millennium.
That just might be changing now. Hospitality is the new black, at least in terms of what I've heard during recent briefings with vendors. The telecom industry is coming up with new ways to address this global segment, and these aren't all about analog.
Understanding a Hotel's Phone Needs
The hospitality sector's reluctance to upgrade from analog to IP hasn't been without reason. Hotels are indeed tech savvy and are undergoing radical transformation. For example, we've seen tremendous innovation in how the sector leverages IT, including through loyalty programs, in-room entertainment, Web bookings, and wireless technologies.
But the benefits associated with VoIP don't particularly apply to hospitality, since it has no need for adds/moves/changes or to integrate end-user apps. When VoIP was new, guests still needed analog lines for modems, and it turns out that analog meets most guest needs pretty well -- especially considering that IP phones remain at least three times more expensive with little to no perceived benefit to the guest.
Even worse, hotel telephony shifted from revenue source to cost of doing business. The revenue associated with long-distance and local calling disappeared as hotel guests were among the first users to discover the benefits of BYOD. If guests do use their room phones, they're most likely placing internal calls -- to the front desk, the concierge, another guest room, or the wake-up service, for example. Hotel calls are more about intercom than PSTN.
A few hotels abroad have eliminated room phones, but here in the U.S. in-room phones remain a requirement for two or more stars. Guests appreciate phones more than usage indicates because of the sense of overall security and safety that phones provide -- similar to a fire extinguisher.
Hoteliers might be tempted to go with whatever is cheapest, but that's risky. A failed wake-up call can erase all goodwill a hotel may have established with a guest. If the phone or line quality is problematic, margins could disappear if repair is needed, which inevitably occurs after-hours in hotels.
Special Accommodations
"Hospitality is specialized," Jim Davies, CTO at Mitel, told me in a recent conversation. "Too often telecom vendors claim vertical specialization, yet only offer generic solutions."
Davies, who works with Mitel's verticals, said the solutions need to be "tied to hotel workflows or guest experience to generate meaningful incremental value for hoteliers." The next wave of vertical specialization will involve highly customized solutions that uniquely address specific objectives of the hospitality industry, he added.
Mitel made an early name for itself in hospitality with extensive integrations to property management systems (PMS). Hotel PMS solutions manage rooms, reservations, housecleaning, and guest portfolios. Integration remains important, but it is not as strong as a differentiator as it once was. NEC, BroadSoft, and PhoneSuite also offer rich PMS integrations. NEC even offers its own PMS system.
Bob Galovic, the vice president of IT at Marriott International and panelist at last month's Enterprise Connect in Orlando, told me simplification is a top priority. One way to simplify is to reduce the number of vendors. Marriott recently struck a deal with Verizon that bundles hosted voice services with network bandwidth. Verizon may be the first provider to significantly crack hosted telephony for hospitality.
In most cases, fixed analog extensions are less expensive than hosted/recurring VoIP lines. However, Verizon adjusted its pricing to better reflect the low telephony usage at hotels. Verizon's hospitality offer bundles in-room telephony with wired and wireless networking services. Hotels can build out their Internet, telephony, and equipment needs from one vendor.
Marriott could have eliminated on-site equipment, but Galovic said it preferred to keep analog phones in the rooms and so requires an on-premises gateway that Verizon also manages. "The flexibility and costs associated with analog phones outweighs the benefits of no on-site hardware," he said. Verizon integrates the telephony system to Marriott's PMS using technology from BroadSoft and Systems Design & Development.
One of several vendors advocating the use of in-room IP phones is Alcatel-Lucent Enterprise (ALE). Its hospitality portfolio, for example, includes Smart Guest, an application that lets guests use the phone's touchscreen to control lights, blinds, temperature, and entertainment sources. Smart Guest creates a unique experience as well as reduces clutter from separate devices (clock, radio, thermostat, and light controls).
In addition, ALE is piloting cloud-delivered services for hospitality with an occupancy-based billing model under which a hotel only pays for a room phone system when a guest occupies that room. Accor, which operates about 250 hotels in the South Pacific, implemented this model. "For us, it was absolutely critical to address both the licensing model that reflects our business operational needs as well as the technical solution," said Paul Smith, head of IT and guest technology at Accor.
While ALE looks to the cloud, NEC turned to biometrics to strengthen its hospitality solution. NEC offers a variety of biometric solutions, including the NeoFace facial recognition application, in more than 40 countries. As guests enter a hotel, NeoFace can match up their faces to loyalty profiles. A wireless alert to staff can ensure a personal greeting in a guest's preferred language.
In addition, hotels can integrate NeoFace with check-in systems so that a guest's arrival initiates the check-in process, and can use the app to monitor common areas and trigger alerts based on long lines, a crowd, or other situations. Lemon Tree Hotels group in India is using NeoFace to scan for both security threats and VIP guests.
Last year, NEC launched a new integration with Newmarket International's Hotel Service Optimization System, or HotSOS. This enables pertinent guest information to be displayed in the attendant/operator console with a similar look and feel to the native application.
Many hotels are quite content with analog room phones and hardware-based solutions. PhoneSuite has emerged as a growing, low-cost supplier targeting midsized hotels and motels. The all-in-one system natively supports voicemail, call accounting, and PMS integration. PhoneSuite competes on value that meets the requirements of franchised hotels.
Like many industries, transformation is no stranger for hospitality. Hotel revenue sources are rapidly shifting, as are the motivations for how and why a guest selects a hotel. What's driving revenue are loyalty, experience, and events. UC vendors that can facilitate revenue or dramatically cut/align costs will have an advantage.
Dave Michels is a contributing editor and analyst at TalkingPointz.
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