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The IP PBX Can It Save the Hotel Telephone Department?

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June 01, 2002
Dan Phillips, COO - dphillips@its-services.com

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© 2002 Hospitality Upgrade. No reproduction without written permission.

Think about the history of telecommunications in the hotel industry. In 1984, Divestiture began the need to purchase equipment like private branch exchanges (PBX) and call accounting systems (CAS). Things went along smoothly until 1990 when TOSCIA (Equal Access) came along and forced upgrades or replacements to the phone systems in hotels. Then in 1995, the North American Numbering Plan (NANP) forced upgrades or replacements to both PBX and CAS. 1996 brought on the Telecommunications Improvement Act which opened up competition in both the local services (Baby Bells) and long distance services. This could have forced a hotel into more upgrades of phone systems for things like T-1s. Finally, to top it all off, Y2K, forced upgrades or replacements to PBX, CAS and voicemail systems (VMS)—plus every other thing attached to a PC or date stamp.

During this timespan you have probably purchased two or three completely new phone systems and upgraded the ones you did have once or twice to boot. Every breathing hotelier knows what has happened to telephone revenues over the last several years. Combine the present lack of revenue with all of the costs over the last 18 years involved with running a phone department and you probably think that PBX stands for pay back expired. Well, you may be happy (or very upset) to hear that a new technology is coming along. This is the Internet protocol (IP) PBX. And, you may want to think that IP could stand for investment protected.

Many hoteliers have said that their business is putting heads in beds; however, every hotel has beds and the successful hotels are the ones that differentiate themselves from their competitors. Differences can be better beds and comforters, friendly staff, five-star service or a higher caliber of technology offered to guests. Telecommunications as a differentiator began by adding VMS, then went to two-line speakerphones and could have stalled with HSIA; however, technology amenities will still be one facet that raises one hotel over another at check-in time.

One glaring, hard fact that traditional PBX vendors can’t ignore, as they try to argue your salient points to not purchase yet another new phone system, is that a new PBX really does nothing more than the old PBX you currently have. OK, they came out with digital phones that have a LCD that show a guest name. And, they came out with an ACD to use in your reservations department. But, have any of the features changed, been enhanced or added to in the last two decades? Sure, they have new digital sets every time a vendor knocks on the door, but all they have done is move the same buttons to different places on the phone. Eighteen years and a phone is still a phone, especially in the guestroom. That analog phone is used only for a modem connection, room service and wake-up calls, which are all pretty much non-revenue generating. It’s so bad, one of my clients asked how we could charge for wake-up calls.

As it stands today, the PBX in a hotel environment is not much more than an intercom system—a very expensive intercom. It is difficult to make a valid argument to purchase a new PBX. There is virtually nothing a new PBX will do that your old, dusty, refrigerator-looking PBX won’t do.

Perhaps to save the day, like a caped figure on the horizon, is the IP PBX. You have probably heard a great roar over the last few years about voice-over Internet protocol (VOIP) and no longer paying for long distance calls. The roar has quieted some. VOIP isn’t going to be everything people said it was going to be. But, VOIP is being used pretty much by most every telephone company you can think of, and, many of your phone calls now are VOIP in some part without you even knowing it. An IP PBX could and probably will be configured to use VOIP (but that is not what we want to discuss here).

Convergence of voice and data is where we are going. Think of the networks you have in your hotel. Think of all of the things that ride on that network: the PMS, reservations, POS, CAS, sales and catering, golf, Internet access and more. Now, put voice and all of its applications on that same network; applications like voicemail, caller ID, integrated voice response (IVR), speech recognition and the like. An IP PBX will enable you to bring all of these sources of information together. An example might be that a guest calls the hotel, the caller ID pops up, the PMS recognizes the number as belonging to a previous guest, reservations shows that the guest stays frequently and prefers room 731 because of the view, the golf system shows that he prefers to play early on Saturdays, the POS shows that he only orders room service and just at night, and, the CAS shows that he only direct dials his office number. All of this comes onto a computer screen before the hotel staff member answers the call. Could you use information like this to differentiate your hotel from the one next door?

All of that sounds great. The IP PBX isn’t quite there yet; however, all of the features mentioned above will just be add-ons, no upgrade or replacement of the phone system needed. Today, the IP PBX is not much different from the PBX you have, as far as the features available. We questioned many of the leading IP PBX companies. The questions focused on how the IP PBX compared to features present in most of today’s hotel phone systems. For the purposes of this article, we did not go into standards like G.711 or H.323 or protocols like SIP. The information in Table 1 is an indication of how IP PBXs compare to your traditional phone system today.

Information was requested from the following companies:

• 3 Com – a response was provided by Square One Technology, one of their distributors
• Alcatel – did not respond because they are announcing a new system in the near future
• Altura - did not respond because they are announcing a new system in the near future
• Avaya – a response was provided by Exp@nets, one of their distributors
• Cisco – did not respond, company policy prohibits it
• Ericsson - did not respond because they are announcing a new system in the near future
• Hitachi – did not respond to questionnaire
• Mitel – did respond, see table
• NEC – did respond, see table
• Nortel – did not respond

Feature-wise, the current state of IP PBX is not much different than the phone system you have installed now; however, IP PBX systems are built on open architecture with standard protocols. This means that future developments will come faster than what you’ve become accustomed to with your previous systems. Also, third-party developers will produce very interesting applications that will work on your IP PBX. This means that you will have great flexibility in choosing both the provider and the applications you want to deploy.

Another feature of IP PBX is that it can be networked with multiple sites across the country or the world. Management companies, and brands for that matter, could choose IP solutions throughout their portfolio. For the hotel staff, this would mean inter-networked, seamless connectivity to every other employee (or guest) throughout all of the hotels. Shared documents, extension-to-extension dialing and video conferencing, would be done easily across the network without experiencing the costs of generating traffic that goes out over the public networks. This is where teleworkers will thrive.

IP phone systems will be easier to install and maintain. They will share the same cable plan as your data network, removing the need for duplicate infrastructures. Adds, moves and changes will be a cinch, with the phones themselves handling much of it, and other programming can even be done remotely. All of this will reduce the costs of keeping the phone system.

More than likely, your new IP PBX will come with really neat applications already built into it. Things like on-screen dialing, or dialing from your PDA, unified messaging and screen pops with guest specific information will make your administrative staff more efficient.

Now I’ve been in the business long enough to know that most hotel companies are not going to invest in a new phone system just because it makes the staff more efficient. Hoteliers spend money only if it will have a positive impact on the guest experience creating a ROI. The current state of IP telephony does bring some features that will provide that warm touch to the guest. If configured correctly, an IP PBX can take care of providing HSIA, even with just using the same old analog phones in the guestroom. And, IP phones today can come with an LCD display or even a color VGA display to provide menu choices, XML, a browser or JAVA applications. An example of this would be to provide concierge-like services on a display phone in a public area of the hotel to allow guests to navigate and make informed choices.

The features available today may be enough to sway some hoteliers, but it probably won’t be until some real killer apps that take place in the guestroom, or have a direct impact on the guest experience, before IP PBXs take off in hospitality. If you have a PBX that is dying in front of your eyes or you are opening up a new hotel, you should strongly consider an IP PBX or a PBX that can easily migrate to IP. The rest of us will have to wait until that time when we feel the level of efficiencies and feature set is compelling enough to make us bite IP.
Dan Phillips, COO of ITS, Inc., a consulting company specializing in technology in hospitality, would like to thank the following people for contributing to this article: Robert Brock at Square One Technology, Tim Cook at Exp@nets, Kevin Johnson at Mitel Networks and Paul Weismantel at NEC America. Phillips can be reached at (678) 802-5100 or dphillips@its-services.com for comment or question.

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