Dial Tone is Dead - What’s New in Hotel Telecommunications?

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June 01, 2016
Communications
Dan Phillips - dphillips@dare2i.com

Roundtable participants:
Damien Chmielewski, CEO, IPFone
Mike Gray, senior hospitality practice manager,
NEC of America
Mark McBeth, VP, IT, North America,
Starwood Hotels & Resorts Worldwide, Inc.
Frank Melville, president, PhoneSuite
Alexander Perovich, co-founder, Think Simplicity
Ron Strecker, CFO, Al J. Schneider Company
Ron Tarro, VP hospitality and travel industries, Broadsoft
Neil Tolley, managing director, Fourteen IP
Chris Wieland, CTO, Thing5

Please STOP! You’re hurting my telecom soul. I cut my teeth on the first Hitachi PBX and I have seen hundreds of Mitel, NEC, Siemens, Lucent/Avaya and other refrigerator box type PBXs in my day. But I can’t take it anymore when a new hotel, or a renovation hotel, or even a hotel with a dying PBX, simply looks to replace where dial tone was with dial tone again.

Divestiture (the birth of the need for PBXs) was as far before the year 2000 as we are now past it and still hoteliers install dial tone as the main staple to their communication plan. Hotel telephony needs to become a communication platform addressing multiple service and marketing touch points on various devices – hotel provided and guest owned.

Spoiler alert: As an industry we’ve waited so long to get out of PBXs that a single hotel communication platform, is really no longer feasible. We need to move straight on to having hotel companies plug into enterprisewide, preferably global, telecom platforms which have hotel feature sets included. Today’s headlines all center on personalization, guest life cycles and guest experience. None of the stories include hotel phone systems. Why not? Because a premise-based phone system is about as capable as a first grader in college, and hosted systems today aren’t much more mature.

Can you imagine your sales staff calling guests in their rooms to inform them of a discounted room rate on their next visit, or to tell them that the special in the restaurant tonight is lasagna? Hoteliers use the guestroom phone less than guests do. If, arguably, 98 percent of all SMS messages received are read, and 90 percent of them are read within the first three minutes of receipt, why are we still spending money on an antiquated, dial tone-generating device in the guestroom?

We need an enterprisewide communications platform that encompasses every guest communication touch point. It needs to address each guest personally at every point within their life cycle, which today amounts to 365 days a year. The platform needs hooks (APIs) in all hotel systems to the point, for example, it can display the value of the calling guest specific to the staff role receiving the call on their phone display, desktop or mobile. The platform must work seamlessly with Facebook Messenger, SMS, WeChat, WhatsApp, Skype, Telegram, and any other communication applications people have on their phones, and do so in any language.  An enterprisewide or global platform will query guest personal information and provide guest profiles. It will communicate with the guest at the moment of their need just like a friend would.

I raised my top questions on this topic to several industry leaders. Some are on the telephony vendor side; others are hoteliers. Their responses have been edited for style and clarity only.


HU: WHAT ARE YOUR THOUGHTS ON PREMISE-BASED VERSUS HOSTED PBX SOLUTIONS FOR HOTELS?

MMcBeth: We’ve been pursuing hosted voice solutions for almost a decade. Let’s just say we ran into our fair share of issues. We feel the hosted voice environment has been very slow to mature. That fact, coupled with the lack of experienced integrators, has caused us to pause our deployments. We still believe a hosted solution will be the right one once the technology has matured and the integrators have solidified their deployment and support of the environment.

FMelville: We view hosted as the eventual winner. It has many real and potential advantages.  But implementation difficulties, bandwidth issues and HSIA dependability continue to be concerns. So despite the urging of major chain IT leaders, adoption of hosted over premise is low unless hosted is mandated from above.

APerovich: The technology needs to provide immediate adaptability to keep up with communication progress and changes, and user demands. If user needs are changing, shouldn’t the communications platform change with them? Overall, we believe hosted isn’t necessarily a versus discussion any longer. Instead, it’s the next step in hotel phone system evolution.

NTolley: The pendulum has swung now to where most expect a hosted solution to be proposed. But there are some who still prefer premise for whatever reason. And there are some countries where it isn’t possible for regulatory or connectivity reasons.

DChmielewski: Hosted PBX is the most reasonable and sustainable model for technology management, procurement, disaster recovery features and overall cost.


HU: WHAT SHOULD REPLACE THE GUESTROOM PHONE? 

RStrecker: Choices. With the ability to handle voice across wireless networks, why not let the guest choose how they’d like to take calls directed to the guestroom phone. For instance, I can use my cell phone to make a reservation, check in, and even open the guestroom door in some hotels. Pairing a customer’s cell phone to their room has added potential when it comes to controlling other devices like TVs and thermostats. 

MGray: A full color display phone that provides fully seamless mobility and blends all communication tools (tablets, phone, etc.) into a single device that’s easy to access and operate.

NT: Is that really for us to decide or should it be the guest?  My personal view is it will be the guest device of choice and probably be a brand app of some kind. We’re already seeing in-room tablet providers looking to integrate voice, so a simple contact button on any page of a tablet can initiate a voice or video call to the correct agent. We can even do the same with the in-room TV. Voice is just a part of the wider solution. So the device for me is whatever the guest wants to use at the time.

AP: I’d say guests aren’t ready yet. People may be using their cell phones to make external calls from a hotel, but internal hotel communication requires a device that looks and operates like a traditional phone. Also, in an emergency, the reflex is to look for the room phone and dial 911. I believe we need phones with tablet companions or better yet, tablets with handsets in the short term.

FM: The guest’s own mobile or, in rare cases, a tablet in the room. This starts soon – one to three years – but will take 10 years to fully effect.

MM: The majority of guests do two things with a guestroom phone: Call room service and set a wake-up call, and both of those services are waning in the modern hotel. 911 emergency services are still a requirement, so the phone isn’t going away anytime soon. However, I’m of the opinion that our industry should continue to brainstorm this issue. I would welcome innovative ideas from the telecom and telephone manufacturers. An IP-based intercom system with the ability to notify 911 might be the answer. Hotel telecom systems should also allow a guest to opt in to mobile device integration, where calls to the guestroom route directly to the guest’s mobile device. Opt-in options could include SMS, chat, direct to voice mail, as well as voice calls.


HU: WHAT SHOULD A HOSPITALITY-SPECIFIC, HOLISTIC COMMUNICATIONS PLATFORM LOOK LIKE?

AP: Guests shouldn’t have to download or install proprietary apps. It should work through apps already on their preferred devices, like SMS texting from smartphones, Facebook messaging, Skype or Twitter. Promotions or strategic marketing campaigns will have greater impact and response because they’re being delivered through the guest’s preferred method.

CWieland: A hotelier’s communication strategy must transcend a technology product or platform to include the human element. A holistic approach should promote the continuity of the guest interaction and experience regardless of whether that interaction is with staff on property or remote.

DC: The integration of communications services with other information services, such as CRM and mobile device access to hotel services, can bring proactive ways to create a better guest experience and loyalty.

FM: The holistic platform will wrap all communication vehicles into a cloud-based service, that seamlessly incorporate premise handsets (guestroom and office) and mobile devices (guest and staff) with brand- independent apps that allow guests to communicate and make requests using their most comfortable method (voice, email, text, chat).

MM: For several years I’ve thought of separating the guest platform and admin platform. Brands, management companies or ownership groups could put all admin telecom on a single enterprise platform, while guestrooms could be on separate platforms either on premise or hosted. Routing technology is sophisticated enough to solve the routing issues so that room service calls still go to the right place; and that could be a corporate call center.


HU: WHAT BUSINESS MODEL WORKS FOR A COMMUNICATIONS PLATFORM? MANY VENDORS OFFER HOSTED SOLUTIONS ON A PER-ROOM, PER-MONTH BASIS. IF YOU ADD UP THE HOSTED CHARGES FOR PMS, VOICE, POS, KIOSKS, GUEST SERVICE APPLICATIONS AND SO ON, IT BEGINS TO EAT UP THE ADR PRETTY QUICKLY.

MM: Guestroom phones are rarely used, so paying a fixed fee for a phone that never goes off-hook seems unrealistic. In the current fixed fee model, owners are more apt to opt for a capitalized investment in on-premise equipment. Operators see a monthly fixed expense as an erosion of their GOP, a common measuring stick for performance. A metered business model would flex with occupancy and demand, and be less erosive to the GOP.

RT: Total cost of ownership (TCO) is a reasonable approach to the hotel communications business model. However, CapEx and OpEX get to a TCO number differently. CapEX technology vendors will say there’s a lower TCO because the PBX can be “owned” for 10 years or more, which avoids hotel operating profit degradation. OpEX providers say technology is restructuring quickly and the days of unchanging long-term telecommunication investments are over. CapEX locks the investment and will generate additional unplanned CapEX given the pace of change. OpEX facilitates rapid innovation of a platform. Hotel owners may have varied preferences around each model. But one thing is clear, the global software industry’s R&D investment and the long-term TCO leverage has shifted to cloud and OpEX.


HU: WHAT ARE THE MUST-HAVES FOR THE NEXT “PHONE SYSTEM”?

RS: It needs a simple approach to the entire suite of telecommunication features you expect in today’s hotels. A vendor that can offer the full solution, without having to bring other vendors into the mix, has my vote. A phone system should be able to handle switching, voice mail, outbound call pricing, call center operations, etc., with a single vendor. And periodic upgrades shouldn’t require paid technicians.

MG: It has to have a “hotel in a box” approach – virtualized PBX, messaging, UC applications, contact center and enhanced emergency notification applications all in a single server.

CW: Hotel communication is rapidly evolving and software centric, so cloud-based platforms must be nimble and embrace a flexible architecture to adapt to future unknowns. The ideal hotel communications platform captures business intelligence across a portfolio, tracking and measuring guest trends like bandwidth usage and phone numbers used to call the properties in order to increase marketing.

RT: Vendors won’t be selling systems, instead, managed service providers will be selling aggregations of cloud-based managed service platforms. More generally, cloud PBX is no longer a software or hardware feature purchase. It’s an aggregation of managed services designed for high availability and purchased as a service.

DAN PHILLIPS IS OWNER OF DARE TO IMAGINE, A CONSULTING FIRM SPECIALIZING IN HOTEL TECHNOLOGY. HE CAN BE REACHED AT DPHILLIPS@DARE2I.COM.

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