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Hospitality Industry: Connecting the Unconnected, The Internet of Everything

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June 01, 2014
Internet of Things
Michael L. Kasavana, Ph.D., CHTP, NCE5 - kasavana@msu.edu

During the recently televised 2014 Master’s Golf Tournament, AT&T repeatedly ran its “Wouldn’t It Be Nice” advertising campaign. Underscored by the musical soundtrack of the Beach Boys’ song of the same name, the campaign promotes the beneficial outcomes resulting from human and machine interoperability. The ad ends with this tag line: ”When everyone and everything work together, business just sings!”
This advertisement provides insight into current and near-future technology advancement in the hospitality industry, often referred to as the Internet of everything.


What’s trending? Well, perhaps the most widely discussed and anticipated hospitality business technology development is “the Internet of everything.” The concept of Internet of everything (IoE) involves connecting seemingly independent, unrelated devices and transactions into meaningful interactions with the goal of enhancing the hospitality guest experience. Basically, technology is applied to initiate a skillful aggregation of machine-to-machine (M2M), person-to-machine (P2M) and person-to-person (P2P) activities. By doing this, IoE is able to generate a powerful warehouse of data analytics. Through the connection of devices and processes, hospitality management can gain superior business insight and competitive advantage.

IoE Definition
What is meant by the Internet of everything? Cisco Systems, a leading technology and environmental sustainability firm, defines the term as “bringing together people, process, data, and things to make networked connections more relevant.” The company believes that by joining these four elements there is a more highly valued process created that enables the transformation of captured data into useful information. For the hospitality industry this means the creation of new business capabilities, richer guest experiences and unprecedented industry opportunity.

But this is not the only view. For example, Microsoft views IoE this way: “The Internet of Things is not a futuristic technology trend: it’s here today, and it starts with your things – your devices and sensors, the data they produce, your cloud services and business intelligence tools. That’s the Internet of your things. By implementing a strategy to capitalize on the Internet of things, you can stop just running your business and start making it thrive.”

Microsoft’s integrated approach capitalizes on gathered, stored and processed data. This unique approach includes PCs, tablets and network tools, as well as back-end systems and services. Microsoft’s data platform securely engages applications that drive real-time analysis and actionable opportunities that might otherwise be out of reach. 

Intel labels its concept the Internet of things (IoT) and defines it as “driving business transformation with integrated, scalable, device-to-cloud solutions.” The company perceives the emergence of a dramatic movement from isolated systems to Internet-enabled devices that can network and communicate with each other in the cloud. The IoT is expected to produce new services, innovative revenue sources, improved productivity and efficiencies of existing services, as well as improve real-time decision-making.

The device-to-cloud (D2C) is somewhat unique to Intel in that it involves connecting legacy systems to secure, intelligent devices to enable end-to-end analytics to transform business. The enormous volumes of data generated and shared across intelligent devices and systems can now be analyzed, and the untapped value extracted to serve the business. This enables companies to provide better products and services, enabling new business models and enriched consumer experiences.

In terms of the hospitality environment, IoE means that regardless of whether the source is a mobile app, digital sign, point-of-sale (POS) terminal, hand-held device, robotic unit or thin-client terminal, the IoE is capable of creating an intelligent system that transforms data into a platform for the growth, expansion and streamlining of a toolbox of functionality capable of improving guest, employee and property interactions.

Guest Cycle
The concept of a hotel guest cycle defines the interactions between a guest and the hotel. The cycle is normally perceived as a progression of transactions from pre-sale, point-of-sale and post-sale phases. Pre-sale activities include reservations, prepayments, forecasting and arrival information. Point-of-sale activities include check-in, allocation of credit, deferred payment postings and folio account monitoring. Post-sale activities include checkout, account reconciliation, folio closure and guest history updating. Traditionally, there have been several aspects of hospitality technology that indirectly relate to an Internet of everything approach. For example, consider the following interoperability linkages:

• Property management systems (PMS) – Standard front office PMS software modules include: reservations management, rooms management, guest accounting management and general management applications. Back office PMS software modules include: general ledger accounting, inventory control, human resources and financial reporting. The sharing of data between front-of-the-house modules linked to back-of-the-house modules presents a comprehensive data warehouse capable of closely monitoring the hotel guest cycle.

• PMS interfacing – An installed PMS normally requires specialty interfacing (M2M) to ensure aggregate handling of deferred payments, access security, energy conservation and other internal controls. Such nonguest-operated interface technology as point-of-sale systems (POS), call accounting systems (CAS), electronic locking systems (ELS) and energy management systems (EMS) have typically been add-ons to front office applications. While guest-operated applications dealing with self services (e.g., self check-in/checkout), in-room entertainment (e.g., movies and PPV events), in-room refreshment services (e.g., honor bars and minibars) and in-room guest information systems (e.g., weather and airline flight schedules) have also become commonplace. Interconnectivity among interfaced modules is used in a complementary manner to enhance management of the hotel guest cycle.

Industry Impact
Will the Internet of everything create major advancements within the hospitality industry? Can a competitive advantage be gained through enhanced hotel guest experiences? Implementation of IoE involves smart technology at each guest touch-point, including public area devices, in-room technologies, mobile applications and concierge services. When connected, these areas and others tend to improve operational efficiencies, enhance managerial effectiveness, reduce cost of goods sold, increase revenues and improve sustainability. Industry practitioners tend to measure the impact of IoE initiatives as customer loyalty achieved through enhanced guest experiences. For example, consider the possibilities associated with the following guest touch-points and the potential developments gained through data sharing across points:

• Self-reservations, online check-in, room upgrade, guestroom access (guestroom access code to mobile device or via kiosk),  temperature controls, virtual concierge – applied artificial intelligence to respond to guest’s requests, dynamic controls (environmental (color, lights, etc.) management), guest security (emergency alarm and guest notification network), payment options, location-based services (personalized wayfinding, social media, and promotions), geo-fencing (targeted messaging based on proximity to attraction or outlet), personalized networking (integration with guest-owned profile and account), and data analytics.

The possible benefits derived from IoE applications in hospitality properties are based on the degree of integration between management, guests and social media networks given the presence of accessible wireless smart devices (e.g., phones and tablets).

Technology Overview
Through the application of a variety of technological applications, hospitality management is now capable of leveraging IoE features. To date, many of the hospitality IoE achievements have been accomplished through creative use of such technologies as Wi-Fi, Wi-Fi-enabled RFID and Bluetooth LE. Together these technologies enable greater visibility into hotel guest movements and patterns, as well as other data trends.

Challenges
Some critics of IoE claim it requires capturing more proprietary and intimate details about the interactions between the guest and hospitality business. As management of the guest cycle may encompass monitoring and tracking a hotel guest’s movements within the property and/or restaurants seek to capture proprietary guest data to push proximity incentives, the guest experience may or may not be enhanced.

Most industry practitioners agree there are three major concerns associated with an effective IoE implementation in the hospitality industry: 1) sufficiency of reliable communication connectivity, 2) presence of high-level network security and 3) lack of interoperability standards. As the number of mobile devices carried by guests increases, and correspondingly data usage consumption rates increase, hotels and restaurants  will struggle to provide adequate and reliable connectivity. In addition, lodging and foodservice facilities may provide inconsistent Wi-Fi signal service or involve confusing connectivity procedures not designed to support next-generation mobile technology. As a result, hotels and restaurants may gain short-term relief through innovative location-based applications for enhanced customer relationship management, attractive gamification and affinity programming, and/or couponing and product promotion. This approach is not considered a long-term solution, however.

The other clear challenge facing IoE for the hospitality industry is the lack of common industry interoperability standards. These needed standards may arise from the developmental work of Hotel Technology Next Generation (HTNG). The focus of HTNG is the publication of industry standards for connectivity and security.

Summary
As technology suppliers are quick to explain, the Internet of everything is not a futuristic technology; it’s here today! When a hospitality firm connects its devices, sensors, application software, cloud services, and business intelligence it can enhance the guest experience and garner a competitive advantage.

Michael Kasavana, PH.D., NCE, CHTP, is a NAMA professor in Hospitality Business for the School of Hospitality Business at the Michigan State University. He can be reached at kasavana@msu.edu.

©2014 Hospitality Upgrade
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IoE Hospitality Models

An IoE illustrated model, the Unified Hotel Communications (UHC) solution from Cisco, is designed to manage and deliver guest and hotel staff communications through a single, common platform. In this model, guestrooms are equipped with both analog and VoIP capabilities for voicemail, group messaging, wake-up calls, intra-room calling and E–911. Guestrooms also feature advanced capabilities for telephone-based guest services, in-room dining, and related applications. Hotel staff communication services incorporate desk phones, portable Wi-Fi phones and mobile devices (e.g., smartphones and tablets) including text messaging and video capabilities. Additional features include special physical and virtual guest service-related applications. Key benefits of the UHC solution are reduced investment and operating costs as well as high-level secure wired and wireless communications integration for voice, messaging and video.
 
Through a model like the UHC, guests may be able to use a mobile device to control many guestroom amenities (e.g., audio, video and environmental).

 

Trump SoHo New York Creates Distinctive Guest Experience

The owners of the Trump SoHo, a five-star luxury hotel in Manhattan, and developer, Bayrock Sapir Organization LLC, wanted to make the hotel spectacular, both visually and in terms of the guest experience. The goal was to create a technologically sophisticated hotel in New York City, with a stand-out guest experience. To delight guests high-speed wireless access throughout the property for smartphone-toting guests, and personalized service from staff members who could collaborate from any location was to be provided. The developers were especially interested in creating a distinctive in-room experience, including a single interface to control not only video on demand, but also room lighting, temperature and even the drapes. Another element would be a novel phone experience. The role of the phone in hotel rooms has changed, so rather than viewing the phone as a revenue-generating tool, Trump SoHo wanted to use it to deliver useful services such weather forecasts, airport and entertainment information and email.

Finally, the property developers wanted to take advantage of technology behind the scenes, for operational efficiency. “Hotels have traditionally built and managed separate networks for phones, business applications, guest Internet access, video surveillance, video on demand, building controls, and more,” said Eric Brunnett, director of information technology for Trump SoHo. “By consolidating all of these services onto a single IP network we minimize IT staff requirements while also allowing us to give guests a single interface to control all room amenities.”

The highly personalized guest experience begins when guests drive up to the front door. Hotel staff wear a wireless IP voice badge that operates over the same system used for typical voice calls. When the bellhop asks the guest’s name at the door, the check-in staff hears the guest's answer so that a moment later they can greet the guest by name. When guests arrive in their room, the color display on the phone shows a personalized welcome message.

The developers estimate they saved 25 percent to 30 percent on cabling and 10 percent on switch ports by using a single converged network for voice, video on demand, business applications, and guest Internet access.

 

HTNG Standards

For the past many years, HTNG has worked to develop industry standards and a voluntary vendor certification program. Although there may be myriad reasons vendors choose to have products HTNG certified, the most often cited reasons include:
  • Recognition as an industry-leading product that meets the highest standards of interoperability.
  • Prospective customers specify HTNG certification as a requirement or it is a preference in an RFP.
  • Many smaller vendors establish instant credibility with larger vendors with whom they needed to interface.  
  • In connectivity negotiations, leverage results when multiple vendors recognize use of a common standard, as opposed to creating a proprietary interface. 
  • Ability to display the HTNG Certified logo on products for marketing and packaging materials advantage.
  • Certification is a visible statement of commitment to interoperability and provides product exposure through HTNG channels.
  • HTNG certification differentiates products from non-certified competitors.
  • Only HTNG certification proves conformance to industry specifications. 


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