The Pros and Cons of using Apple products in hotels

While using Apple devices at the consumer facing front end is a smart choice for hotels, using them at the back end is expensive and potentially risky

The trouble with a new technology all of a sudden gaining momentum is that there is a lot of enthusiasm and eagerness that lets many people race ahead without assessing the pros and cons first. This is particularly so when it involves popular gadgets such as Apple’s iPhone and iPad, which have recently graduated from personal communication and entertainment devices to all round marketing device for hotels.  

Apple is of course a unique success story and we stand in awe in front of Steve Jobs who not only came back to turn the company around after years in the wilderness, but moved on to single handedly revolutionise the way we consume media today. Apple consumer products come with a beautiful, minimalistic design, superior functionality and a seemingly impenetrable cool factor that is streets ahead of its competitors. But aside from the iPod, Pad and Phone, Apple also sells computer software and hardware which includes the Mac Mini, a sub-desktop computer and server which enjoys popularity for its small form factor and light weight compared to regular desktop PCs and has become specifically popular for use as a server in a small network and, due to its sleek design, as a home theater solution.

But things get blurred when it comes to using Apple products in a commercial environment, for example to power the in-room entertainment services in a hotel. In fact, the understandable aim to catch the rays from the All-Things-Apple sun could put hotels in danger of falling into an IT trap that will, at best, cost them a lot of money to implement and at worst severely limit its possibilities to migrate to future technologies. Aside from limiting itself and its travelers to Apple products and updates for the coming years, the investment hotels have to fork out for an all-Apple hotel is staggering. Given the strict regulation Apple imposes on distributor, reseller and end user pricing, there isn’t much room for Systems Integrators or hotels to receive a better discount. So equipping all rooms in a 300-key hotel plus headend with MacMinis is quite an investment, even if the integrator gets a good discount of the list price of roughly US$700 a piece. The cost of the MacMini of course reflects that this is a piece of hardware that was primarily designed as a consumer device, and not for commercial use.  

Don’t get me wrong: I think Apple devices are extremely useful in a service environment such as a hotel, particularly at the consumer facing front end. The ‘Second Screen’ entertainment solution my company offers for hotels is tremendously popular as it lets customers stream live TV and VoD content on their iPad or iPhone wherever they are in the hotel, access facilities and room service info and use it as a navigation tool to facilitate eCommerce applications. But you don’t have to have a MacMini in each room to facilitate these services; there are more robust options in the market that are also easily upgradeable and do not limit accessibility to a certain brand. And they are considerably cheaper, probably as much as 60% compared to an all-Apple solution. Count on top of that the direct and indirect cost incurred by the ongoing maintenance of a PC/MAC in a hotel room and you end up with a price that is way beyond what’s justifiable. 

If significant cost savings are not enough, consider latest figures showing that popularity of Android-based tablets has risen from 13% to 46% in the 6 months from November 2010 to April 2011 which indicates that the race to tablet dominance is far from decided. Just remember that just 2 short years ago the tablet market did not exist and you can literally hear the next ‘big thing’ snapping at every gadget’s feet. Another point to note is Connected TVs, which will significantly impact the hotel industry in the medium to long term and will further erode the window of opportunity for a MacMini solution in a commercial environment like a hotel, at least at the current price point.

Hotels have to seriously look at the consequences of exposing themselves to these potential risks. So rather than following short lived trends and marketing gains, they should carefully assess the cost and long term viability of their IT investment to ensure they can implement changes and additions to their core services easily and with minimal investment.

How Hotels can Replace Dwindling VoD Revenues

Using smart in-room technology to increase revPAR post VoD

I don’t think anyone would disagree with the statement that new technologies, when used creatively more often than not maximise revenue-generating opportunities for hotels. It’s a logical expectation and a simple premise, yet so seemingly hard to put into practice.

The first time hotels felt the pinch of diminished returns from technology investments was when the meteoric rise of mobile telephony dented IDD revenues in the 90’s. Fast forward to today and the new culprit – no surprises here – is the Internet and its wider ecosystem. Since the Internet started to morph from information to entertainment medium a few years ago, it has created a vortex that draws in and transforms almost anything associated with everyday life. Think about how consumer technology devices evolve and multiply with enormous speed while doubling processing power with each new release, making consumer preferences, such as interactivity, on demand and control, ever easier to fulfil. The content delivery world has responded to this pull by transforming itself towards an on demand, interactive and, most importantly, online delivery service.

How should hoteliers react to these developments? Some hotel managers I have spoken to have seen VoD returns falling so sharply that even switching off the entertainment system for a day or two to test its popularity resulted in zero complaints. That’s some hard evidence that cannot be ignored when it comes to deciding on future IT investments. However, these hoteliers have also been busy thinking about other services they could introduce in an effort to entice their guests to spend money while they are in their rooms to replace the VoD revenues of old.

There are a number of options hotels have to intelligently use technology to replace this erstwhile lucrative revenues stream. For hotels, competition drives the need to differentiate, so the key is to opt out of simply adding easily replicable technology gadgets that may add to guest experience but don’t actually contribute to revPAR. Technology is at the heart of a lot of value added, revPAR generating services but for them to succeed, aside from being relevant for a hotel’s specific clientele, they have to fulfil three essential conditions: they need to be convenient to access, easy to use and, from the hoteliers’ perspective, have to add to the bottom line.

Let me give you two examples. Firstly, room service. The usual in-room dining menu may be printed on high quality paper embossed with golden scripture, but what it doesn’t show, is a picture of what you will be served. Now you may argue that you don’t get a menu with images in a five star restaurant either but that misses the point entirely. When I go to a five star restaurant I have usually made up my mind that I want to eat there. I may have researched the menu online, and if I have any specific questions regarding the menu my waiter will hopefully be obliged to be of assistance. On the other hand, when I look at the food menu in my room I am far from having made up my mind of where to eat, particularly if I have a myriad of choices right outside my hotel. So in other words, giving guests a bland in-room dining menu is a missed opportunity.

I often tell the story of when I travelled to the Middle East for the first time and was confronted with an in-room dining menu that listed, among other items, Foul Medames. Now if you are new to the country and culture you probably neither know what it is nor would you be too enticed by the name of the dish. Even the printed English translation, “Stewed Broad Beans”, may not sway you. But if you have the chance to study an image, or even a video of the chef preparing it on your in-room entertainment system, you may get an idea of how delicious this specialty actually is and it may just convince you to place your order - even more so if you can order the dish directly via your TV screen without having to pick up the phone and deal with staff who may not speak your language very well.

The other revenue opportunity that is attracting the attention of hoteliers is using technology to provide a vehicle for in-room shopping. Shopping on the in-room entertainment system is an entertainment option that taps into travellers’ predisposition towards opportunity buying. Many hotels have a shopping annex or Duty Free emporium attached to their premises. This makes it comparatively easy to aggregate appropriate content for an in-room, on-screen shopping catalogue, combined with a simple fulfilment processes that would suit even the shortest of short stay travellers. The limitations of the remote control as a navigation tool can be overcome by turning either a hotel-provided, or the guest’s own tablet or smartphone into a touch-based selection tool. Having all transactions linked with the hotel’s PMS system enables timely delivery and convenient payment options upon check out.

There are many more examples of how this type of online interactivity adds to revPAR, from direct booking of hotel restaurants and facilities, to local maps where local businesses in the vicinity can advertise their trade. Provided hotels are using a capable IPTV system, the technology is certainly mature enough to so the key is for hoteliers to get creative and find the type of service that suits their hotel’s and their guests’ identity and requirements.