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Australia: State of Technology

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June 16, 2006
Ted Horner - ted@hornertech.com.au

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© 2006 Hospitality Upgrade. No reproduction without written permission.

Without a doubt guestroom technology has become the key issue for new hotels and resorts either under construction or existing properties undergoing refurbishment in Australia at this time.


In the U.S. the industry is seeing the rise of condo hotels and also mixed residential/rental communities such as the Ginn Company based in Florida. The challenge for these types of developments is to meet the expectations of the investors who are looking for technology in the guestroom similar to what they have at home.

In Australia we call this strata title. This involves each room or unit being purchased off the plan by an individual investor and where the developer uses these sales to obtain financing to fund their projects. Once 60 percent of all rooms are sold off the plan construction usually commences. Investors in these new developments are able to gain significant tax concessions if they elect to put their unit into a letting pool whereby they can offset interest payments against the rental income.

These investors who in many instances are paying very large prices expect nothing less than what they have at home and many of them already have the best home entertainment systems available. As they can take up their option to stay in their own unit for up to 30 days each year what developers are including in the guestroom is becoming an important part of the sales pitch to attract these high-end investors.

As a result of these new developments together with the explosion of consumers investing in top-of-the-line home entertainment system there is considerable market pressure for all hotels/resorts to invest heavily in next generation in-room guest technology featuring LCD or plasma TVs, new digital video-on demand systems and stereo sound to ensure that hotel guests continue to enjoy an experience similar to that which they have at home.

This explosion in new developments with the emphasis on guestroom technology has created a number of challenges for both the developer and the operator.

Creating a real ROI where the guest experiences the technology in the guestroom and at the same time the operator gets to keep the revenue.

Getting the cable infrastructure right, e.g., fibre and Cat5e or Cat6 and providing the right bandwidth to enable IP-based systems to be installed now and also allow guests to download their own personalised content and secondly to future proof the guestroom for the next 10 years.

The buzz word now is the triple play for example, voice, data and digital video on demand over a single converged network e.g., an IP-based network.

Ensuring that apart from voice, data and video that other key components in the guestroom are fully integrated also such as automation of lights, drapes, HVAC and minibars. This is where organizations such as HTNG are becoming important to ensure that different vendors are all using the same industry standard protocols.

Meeting the needs of generation Y consumers who wish to carry their own content on the road albeit either music or video and creating a plug and play environment in the room to allow them to connect their iPods, laptops or personal video players.

For the last few years there has been considerable discussion on the benefits of IP telephony and we in hospitality have been slow to embrace this technology compared to other verticals that have been enjoying the benefits for a number of years. Reasons given have been the high cost of screen-based phones compared to the standard analog and the declining revenue from traditional PABXs.

However, this is now changing and following the installation of a new Cisco IP PABX at the Sydney Hilton last year as part of a major refurbishment the interest level in this technology has increased considerably with the result that all major PABX vendors are actively promoting IP as the way forward. In 2006 a number of other properties are installing IP-based incorporating the triple play mentioned earlier on a single converged network. It is difficult to cost justify IP-based systems unless hotels are willing to bundle voice and data together on the same platform.

In light of where the market is headed in respect of consumers’ insatiable demand for new technology hotels and resorts in Australia 2006 whether they are new developments or a refurbishment will be left with no choice but to invest heavily in guestroom technology as they strive to remain competitive. The challenges to get it right cannot be underestimated and should be based on ensuring a high level of integration between the various vendors and more importantly a simple guest user interface to allow the connectivity of devices that guests bring on the road with them today. For those hotels that refuse to invest in this technology or get it wrong they will suffer a loss of ongoing patronage from their high-end guests.

Ted Horner is an independent technology consultant based in Sydney. He can be reached by e-mail at ted@hornertech.com.au or 61298768119.

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