Solution Providers: Bringing Value

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June 15, 2011
Solution Providers
Dan Phillips - dphillips@dare2i.com

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Many years ago I was an F&B director at a hotel in Virginia.  Back then happy hour laws prevented the discounting of alcohol, so our enticement to our bar patrons was with food.  On Fridays we provided a full, cooked pig, enabling patrons to pull pork and make their own sandwiches, for free.  Instead of getting favorable reviews, we got criticisms along the lines of the pig must be a leftover which is why we are giving it away for free.  I put the pig on hold for a few months, and then brought it back with a slight difference.  Now bar patrons had to pay $1 per plate.  They still went up to the pig and pulled off their own pork pieces, and they still put them into the same rolls as before, but now it was a big success.

Value:  a fair and suitable equivalent for something else.

Back in the 1980s, hotels began selling phone service.  By the mid ‘90s many hotels were selling a long distance call that cost the hotel a dime for $7.  Guests could make that same long distance call back home for a quarter.  Calling cards came along and pretty much wiped out phone revenues in hotels.  Cell phones put the final nail in the coffin.

In the 1990s hotels started providing high-speed Internet access, generally for a fee of $9.95 per day.  Then, about 10 years ago, many of the limited service hotels began offering it for free to their guests.  Today, most hotels give some form of HSIA away for free.  What does the guest perceive the value of that offering to be?  On the flip side, and not for this article, does this make the argument for tiered pricing of HSIA?

Value:  a fair return or equivalent in goods, services or money for something exchanged.

The hotel industry, as is the world economy, is on a slow rebound path.  It is time for existing hotels coming off of two-plus years of not re-investing to maintain or upgrade their amenities to start making wise choices on technology expenditures.  Demand is growing while growth in supply is at 20-year lows.  This means that competition for heads in beds will be fierce.  For new build hotels, in regards to implementing technology, the bar has been raised quite high to surpass the competitive set.  Hoteliers will be spending about 20 percent of their total IT budget this year on guestroom technologies.  How can this spending provide the highest levels of perceived value by the guests?

The hot products in guestroom technology are all about digital screens.  And, the sizes vary.  From enabling access to guest-owned smartphones, to pushing content to hotel provided iPads  to enticing guests to view HD content on 42-inch LCDs, content via a guest user interface on a digital device with a high-resolution screen is where it is today.  Hoteliers will spend millions of dollars on social media, hotel created apps, concierge type interfaces, LCDs, cabling infrastructure and bandwidth.  How does this translate to value to the guest?

If a guest is able to access content of their choosing outside of the hotel guestroom, they will expect to do so in the room and not pay for it any differently.  A hotel can enhance the delivery and viewing of that content by providing LCDs and connectivity options to those screens.  But, how does the hotel charge for that?  Does providing this type of solution come in the room rate, or is it charged as a separate item?

My bar patrons couldn’t get pulled pork straight off the pig, all you can eat, for $1 anywhere else in town.  To them, that was a deal; a true value.  In regards to guestroom technology, hoteliers need to find the mix of hardware and content that guests can’t find anywhere else and know that the price for that is modest, regardless of how it is billed.

When searching the aisles for guestroom technology at HITEC this June, look for solution providers that have hotel experience within their personnel, that will work with you to create a financial model that your budget can accept, that will provide wow factor hardware that will last you at least three years, and that deliver content to a variety of devices.  But, the most important feature to find will be from a provider that will enable you to create hotel-specific content and apps that individualize your hotel and provide your guests with experiences they can’t get anywhere else.  That will bring value to your guests and provide the best ROI you can have, repeat customers and word of mouth testimonials.

Dan Phillips is a partner at Dare to Imagine, Inc., specializing in low voltage technologies for the hospitality industry.  He can be reached at dphillips@dare2i.com.

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