What are the crucial changes in 2012? What impact can we expect? What products will finally live up to their promise? 

We reached out to several industry experts to find out what is on the hotlist for 2012.  All of our participants come from different backgrounds and have vastly different hotel portfolios giving us a good summary of the industry as a whole.  We asked each six questions to guide the conversation and then let them ramble.  If you’ve ever spent time with someone in IT you’ll know it’s either a one word answer or something just short of a novel.   

Q1: What do you expect from guest Internet this year?

We started with an easy question.  The hotel industry has taken on the role of connecting guests to the world.  The impact has become increasingly expensive and difficult to manage.  What do you expect from guest Internet this year and what are you doing to adapt? 
 
Al J Schneider Co. CFO Ron Strecker said, “[Our top priority in 2012 is] a major overhaul of our wired and wireless network to meet today’s demand from travelers and prepare for the jump to VoIP, a unified communications platform, and allow new technologies requiring a robust Wi-Fi environment.”

VP of Technology for Noble Investment Nelson Garrido said, “Bandwidth requirements will increase anywhere from 20 percent to 100 percent depending on location.”  Destination Hotels and Resorts CIO Marty Stanton agreed with this increase in bandwidth usage and said, “Volume, volume and more volume. Increase, increase, increase.” 

We once coined the phrase how much bandwidth do you need?  Answer:  How much can you afford? Does that still hold true?  Stout Street Hospitality Vice President of Technology Jeffrey Stephen Parker said, “More, more and more in both bandwidth needs and number of devices. With the major players in mobile data (for example, AT&T and Verizon) capping and throttling data, most heavy data users are moving their mobile devices to use data on hotel networks to manage costs and caps.”

It’s clear. 2012 is the breakthrough year for hotels.  You must have a solid network and the bandwidth to ensure guest satisfaction and stay in the good graces with the reviewers on TripAdvisor^®, the new baseline for perceived performance. 
 
Q2: What is your technology initiative this year?

Outside of pleasing the guest with an insatiable amount of bandwidth, what technology initiative are you focused on this year?

Davidson Hotels and Resorts VP of Technology Ron Hardin said he is looking at management tools, specifically systems management, network management, security management and compliance management. Hardin said he has too much to manage manually.

Stout Street Hospitality’s Parker took this a step further and said, “We are working on technologies that are device and platform agnostic. The goal to seamlessly allow users to use Linux, Mac®, PC, Android™, Chrome™, BlackBerry^®, iOS, Windows^® etc. to securely access sensitive data.”  Stout Street Hospitality is also looking at networked alarm clocks, high-definition platforms and ways to reduce printing.

Is it fair to say this is the year of centralization?  The cost can be high for the tools to accomplish this and there are still issues with so many integrations, but as Strecker pointed out earlier there is not enough time in the day to manage manually.  Hotel ownership and management must move to centralized data in order for the data to be useful. 

Getting back to initiatives for 2012, Noble Hospitality believes apps inside the hotel are important. That brings us to another question; will hotel apps make an impact in 2012?  CTF Development, Inc., VP of Information Technology Simon Eng said, “It depends on how much functionality is baked into the app and how loyal the guest is to that particular brand.”  This brings up a great marketing point.  What is the app developed for and who is it developed for?  Brands are clearly distributing apps that generically cover the portfolio that will appeal to the high frequency traveler but not to the vast majority. 

Luxury properties have a suite of services that will allow the app to give a guest specific information that they can drill down to allow for better information in the palm of their hands. Parker agreed, sort of.  He said, “Unless there are tangible benefits to a guest, I do not see a traveler loading his phone with an app for every hotel chain he is going to stay at. The super loyal guest (or a points-hound) might be persuaded to load an app, as he is going to stay with a chain that will let the application benefit him.”

Parker also said he sees a lot of what he calls drive-by apps, or apps designed for a specific promotion (download an app and get a free martini), but these apps are soon ignored or uninstalled.

Parker’s point is valid, but haven’t all apps become dispensable?  Use the app for the moment and then uninstall and move to the next.  It’s so easy to add them and even easier to upgrade or remove them.  Perhaps 2012 is the testing ground for the validity of apps.  In the hands of a good marketing hotel, apps are a gold mine with low cost and significant direct contact.  With the brands beginning to roll out more improved apps, 2012 may turn out to be the rough draft which will be rewritten in 2013. 

Let’s move along from apps to tablets.  Apple’s CEO made the statement that we’ve entered “the post-PC world.”  Corning released a statement that over 180 million tablets will be in the hands of consumers by 2014. Recently published forecasts by eMarketer predict 81.3 million tablets will be sold in 2012.  From a hotel perspective, the tablet impacts the hotel industry since tablets are ideal for streaming and easily transportable. Whether guests are streaming Netflix, TV on demand, highlights, sporting events or other online content, tablets are easy to use and built for media. Tablets are making an impact, but will they make an impact in the hotels in 2012? 

As an alternative to interactive television, Royal Caribbean Cruises VP and CIO Bill Martin said, “[Royal Caribbean is] deploying iPads^® on older ships in the fleet.”  This is an interesting use of staying current while replacing a fading technology.  We’ve seen something similar happening in major markets such as New York, where hotels have deployed tablets to impress guests, but also as a media alternative. Rosen Hotels and Resorts Director of Information Technology Jim Bina said, “For our hotels [tablets] are being reviewed for fine dining wine list, ordering, guest settlement and electronic surveys.” CTF Development is also looking for platforms to deploy in both operations (F&B) as well as proactive sales.

So one group is talking about tablets for guest consumption and then the next group is talking about tablets for administrative interfacing with guests.  In 2012, tablets are making an impact on both guests and admin.  Parker said, “Tablets are a terrific media consumption device. We see (both internal and external) use for email, media and even some productivity applications on tablets. We have even pushed the point-of-sale argument allowing tablets to be mobile revenue centers for things like cash bars.” 

Q3: Will we see an impact of a non-traditional POS in 2012?

Our next question, will we see an impact of a non-traditional point of sale in 2012? As an example, Square has a tremendous amount of momentum processing over $2 million in transactions per day.  Is this our future? 

Xanterra Parks & Resorts CIO John Wimmer had some concerns. He said, “PCI is a concern. Once we overcome that hurdle, it will impact POS.” 

Oh yes, there is PCI.  We can’t go a day without discussions about our best friend, PCI.  Is this the answer? 

Eng said, “I hope so. We, as an industry, have to start minimizing our PCI scope and exposure.”
Along these same lines, Stanton said, “Chip and pin will come into play well before this.”

This leads us to the question of why Europe embraced this technology and yet it is very slow to adopt in the United States.  Garrido believes he has the answer to both and stated we have to wait until the retail side is mainstream.  Retail is the major driver in creating consumer demand which includes payments.  Hotels drive a significantly lower volume in retail, yet a higher per-charge average.  So while we see a foundation laid for non-traditional point of sale, maybe 2012 is not the year for a major push in the hospitality industry.  Non-traditional point of sale has begun its penetration.  The golf courses on the PGA tour use non-traditional point of sale to run both food and beverage as well as merchandise all over the golf course during tournaments.  In addition, if you’ve flown lately you’ve noticed that airlines no longer accept cash on a long flight.  Flight attendants use handheld devices to take credit card payments at your seat.  These are more convenient, have better accountability and decrease loss.  

Eng said that one of his top priority projects in 2012 includes lighting and A/V controls for more sophisticated guests in its higher-end properties who are used to their home AMX and Crestron-type environments. 

Q4: Are environmental controls financially feasible in 2012?

And this leads to our next question: Have environmental controls finally arrived as a financially feasible product in 2012?

Parker said, “I believe that hotels need to put better environmental controls into their buildings, and that good energy management is not only feasible, but will become a necessity, as it has in Europe, to control costs as energy prices rise. However, we need to deploy solutions that interact with the property management systems to make sure we know when someone is in a room.” Stout Street Hospitality is looking into deploying this, hopefully with one or two hotels online by the end of the year. 

Wimmer said, “As a green company, this has been an initiative for years (for Xanterra) and is being installed as a part of a multiple year rollout.” A majority of the respondents agree that energy is expensive and with new government incentives in place, energy management is a product for 2012.  But it was not unanimous.  There is still concern over the cost and the ROI.  The more hotels that get installed, the more real data will become available.  2012 is the year that data should become more reliable and available.  With the new incentives in place, environmental companies get more aggressive in both selling and financing the implementation, creating a lower barrier to entry.  The opportunity may open the door for hotels to take the green initiative.  

Q5: What big technology opportunity do you feel the industry is missing?

With 2012 shaping up as a big technology year in the hospitality industry, are there any big technology opportunities with which you feel the industry is just missing the boat?

Strecker brings up a hot technology topic that he’d like to see. He said, “More industry-based ideas like RoomKey.com that start to bring the cost of distribution channels back to a more manageable level.”  Strecker also said he want to see talented programmers who are encouraged to develop more B2B and B2C sites that are funded by and operated by the industry for the industry and its guests.  This is a topic that deserves its own article. 

Eng pointed to the guestroom and said, “An easy, manageable delivery of streaming content to the guestroom, whether it is through Netflix or the guest’s own Slingbox®, and a method to charge a reasonable fee to provide the bandwidth (is something I'd like to see).”  The Consumer Electronics Show 2012 was stock full of TVs that are Internet capable.  In addition, tiered bandwidth is gaining momentum and seems to be a short-term answer for delivering high usage expectations at a reasonable price (but it’s not free).  If we agree that guests bring in their own media content (both actually and virtually) then some sort of fee-based delivery makes sense.
 
The biggest shake-up may take place this fall with the implementation of Apple TV^® in televisions to allow for connectivity between the TV and the device (iPod^®, iPad^®, Mac, etc.).  Video on-demand providers have been able to keep market share because of the difficulty of allowing guests to access TVs for their own media experience.  Giving guests connectivity to new flat-screen televisions is a giant step in giving them the home experience they demand.  Where Apple goes, so do the other technologies, so look for similar technologies to hit the market in the next six months. 

While both Parker and Hardin point to financial security in 2012, Royal Caribbean’s Martin brought up another progressively hot topic: social media and mobile interactivity while on property.  This is both an exploding topic as well as a rapidly growing industry.  An international company has developed analytics that influence buying decisions to people both receiving and sending messages through social media while the sender is at the hotel or resort.  Social media has already made an impact in the hospitality industry, but the use of real-time data to influence immediate purchasing decisions is staggering when you consider the dollars at stake.  While the analytics are complicated, the implementation is not.  The question is what do you do with the data?  What do you do with the influence?  Is social media even real? 

As social media develops many hoteliers understand the basics of how it’s used personally, but not the long-term impact as a business.   Information movers and shakers are salivating.  Politico just signed an agreement to partner with Facebook to gather information (no specific posts are released) for what is being called research purposes.  Facebook will measure mentions of the candidates in U.S. posts and comments as well as assess positive and negative sentiments expressed about them.  Facebook, on the verge of filing for a ground-breaking IPO, could demand more money than Google in its initial offering.  The information Facebook can deliver through millions of volunteers posting unsolicited messages to their friends and family will change the way we market, interact and drive revenue.  All the hospitality brands are reacting by bringing people on full time in house or through consulting firms to figure out how to make this a success.  2012 will be the transformation from infancy to impact. 

Q6: What is the most unique technology that you have implemented?

With that seed firmly planted and the wheels spinning, what is the most unique technology that you have implemented or have on the drawing board in your company? 

Trevor Warner is the president of Warner Consulting Group and can be reached by email at trevorwarner@warnerconsultinggroup.com or at (614) 486-4636.

©2012 Hospitality Upgrade
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