Customization is key to in-room entertainment systems

Hotel & Motel Management, Feb 16, 2004 by Bruce Adams

One size doesn't fit all in the world of guestroom entertainment. In-room entertainment companies aim to provide hotels with a high degree of customization to reach guests.

LodgeNet Entertainment Corp. introduced its digital SigNETure TV platform in June to help hotels create brand identities and increase sales.

"We can tailor content to a business, leisure or brand focus," said Scott Petersen, president and c.e.o. of LodgeNet.

"We can offer a look, feel and content that matches the hotel or the operating company and reinforces its brand."

Customization also provides hotels and management companies marketing opportunities.

"We can allow the hotels to leverage all the mass-media marketing they have developed, distill it and present it to the guest to communicate on a one-to-one basis," Petersen said.

For example, LodgeNet's in-room offerings can connect guests to the hotel brand's Web site to book a room or check their frequency points, or direct guests to on-site attractions, such as restaurants or spas.

"Our sales approach now starts with a conversation to understand their needs and business issues so we can put together a package that makes sense for them," Petersen said. "We want to work closely with the hotels to co-create a look and system that works. We want to make sure the package of entertainment being delivered targets their needs and that they get a branded interface and marketing opportunities to promote sister properties and profit centers on property."

LodgeNet's digital system is installed in about 360,000 guest-rooms, and its SigNETure TV is installed in about 37,000 Hilton guestrooms, Petersen said. SigNETure TV includes on-site digital storage, a satellite-distribution network, customized content that can be updated daily from one location, a customized guest-user interface and marketing elements.

Industrywide, there are about 5,800 properties representing 984,000 guestrooms installed with LodgeNet's in-room entertainment products. Petersen said it costs LodgeNet about $400 per room to update hotels from analog to digital systems. The company typically enters into seven-year contracts with hotels.

On Command

Tad Walden, chief marketing officer for On Command Corp., considers the television command central in the guestroom. It can become the central point of communications and delivery of guest services and information.

"Virtually anything--from booking restaurant reservations, tee times and finding out about the facilities--can be promoted, communicated and managed via the television," he said.

If the television is the central point, then pay-per-view services fall in line with that and make them more important. Walden said hoteliers are building interfaces to promote their own products and services and bundling them with On Command pay-per-view services in the hotel.

"It goes beyond movies and becomes a tool that hotels can use to brand, market and identify," he said.

Analog in-room entertainment systems allow hotels to deliver more than 1,000 movies or short programs to guestrooms. "Increasing overall content is a huge focus for us," Walden said. "How many titles you offer and how quickly you can present them to the guest translates into more purchases and higher revenue."

On Command has installed about 3,400 properties representing 800,000 guestrooms, including about 300,000 digital guest-room installations. Walden said it costs On Command about $400 per room to upgrade from an analog to a digital system. Conversion priorities are determined by management companies and by the performance of the property.

"The migration to digital systems will continue," he said. "Every hotel has something unique that they want to do, and we will enable that."

General Dynamics

Upper-upscale hotels are putting in high-end systems with high-definition capability, high-end sound systems, and 42-inch, high-definition displays to provide a stunning experience, said Randy Sablich, director of commercial business development for General Dynamics Interactive.

"That will trickle its way down to three- and four-star hotels over time, dictated by prices of large-screen TVs and the cost to deliver high definition," Sablich said.

Hotels in the midscale, upscale and upper-upscale segments want to personalize the video-on-demand guest experience.

"They want to tie it into the property-management system to offer discounts for groups, or to use it to communicate to guests," he said. "They're also looking at using the VOD system as an internal marketing tool to the guest."

The hotel industry has been slow to install high-end VOD systems, such as General Dynamics Intrigue, because of the depressed economy and resulting downturn in hotel business, Sablich said.

"We've seen a slow down in the number of orders," he said. "But we continue to roll out a small number of properties with InterContinental Hotels Group."

Intrigue is installed in 42 hotels comprising 7,000 guestrooms worldwide. Its business model is a lease arrangement in which the hotel decides what to charge, or a revenue share plan where channel partners, such as Verizon, have more control over pricing.