In-room (Self) Entertainment

By Cihan Cobanoglu | May 04, 2010

On the heels of the collapse of in-room telephone revenue due to cell phone proliferation, in-room entertainment revenue has also hit a steep decline. Between a sloppy economy and the struggle to compete in a congested market, hotels are looking for innovative ways to ensure that their guests are not only satisfied, but have incentive to come back. Due to commoditization, where price becomes the most important decision-making criterion, hotels must ensure that guests have what they want. But what are those guest wants, and how can hotels balance them with their own business needs?
 
The University of Delaware's Hotel Technology Study clearly shows that in-room entertainment systems, as an in-room amenity, are not highly rated as "important" by the majority of travelers. However, by contrast, guest connectivity panels and easily accessible electrical outlets have been identified as two of the most important technology amenities in a hotel room. With more and more plug-in devices being stowed away in guests' luggage, the need for these two in-room features will only become more important.

A drain on in-room resources?
With many guests now traveling with some form of personal music player, cell phone, laptop computer and more, what can hotels expect next? Keep an eye out for Slingbox (www.slingbox.com; approx. $150), a device that consumers can use to access their local digital television content from anywhere via a high-speed Internet connection. Using this technology a guest can order a movie from their local cable TV provider while in their hotel room, say for $3.99, instead of paying $7.99 through the hotel's in-room entertainment provider. Similarly, guests can download digital content to their smart phones and bring it along on their trip. All they need is a connectivity panel that will allow them to show the content on the high definition TV in the guestroom.

These situations place demand on the hotel's Internet bandwidth, but don't bring in additional revenue; but alas, if guests start demanding local content and can't get it at your hotel, they'll stay somewhere else where they can.

To resist or comply
What does this mean to the hotel operator? For starters, hotels should ensure that Internet bandwidth is available and fast, regardless of whether or not they charge for connectivity. Some hotels may resist the idea of installing guest connectivity panels in guest rooms, or investing more money to increase the bandwidth and speed of their guest Internet networks with the hope that guests would use the hotel's services instead of their own.

As a word of caution, recall that this philosophy didn't work with in-room phones. Hotels lost almost 95 percent of their in-room phone revenue to cell phones. What's more, the number of guest complaints skyrocket when cell phone reception is shoddy in guest rooms or in public areas. Some hotels have even purchased antennas to ensure strong cell phone coverage throughout the property and grounds.

Technology is one of those factors that travelers take into consideration when selecting a hotel. Moreover, research shows that the quality of technology amenities in a hotel is a predictor of guest satisfaction and future behavior. In other words, the more a guest is satisfied with technology amenities, the more they report satisfaction with their overall experience and the more likely they are to return to that hotel and brand.

Investing in technologies such as guest connectivity panels and easily accessible electrical outlets may not bring direct revenue to hotels; however, one thing this does ensure is that guests will leave the hotel more satisfied. In the world of commoditization, hotels should seek ways to differentiate themselves from competitors.
 
For more insights from Cihan, click here.

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