Changing the Channels

Despite the many devices hotel guests bring with them, the television remains the centerpiece of every guestroom. It’s the one thing capable of delivering a widescreen view of all the news, sports, movies, and broadcast shows guests are looking for. And even though there are some aspects, such as ordering room service, accessing directories, and checking out, in which the TV has become even more useful to guests, the average hotel television falls well short of matching what most of them experience in their own living rooms.

Look no further than the bankruptcy announcement by LodgeNet for evidence of hospitality TV’s shortcomings. A major player in its industry from the time it established itself in 1991 until it acquired the last of its competitors in 2007 and served nearly 2 million hotel rooms, the company didn’t have an answer when guests turned to the Internet for their entertainment. After failing to change with the times and not posting an annual profit since 2006, LodgeNet is now a shell of what it once was. While the company secured $60 million in new financing through an affiliate of investment firm Colony Capital and promises to “transform its business,” it will be doing so in a much more crowded field. That may explain why LodgeNet has recently been trying to expand into the health care industry (the company wouldn’t comment for this article).

“The reason LodgeNet is disappearing from hotels is that it didn’t adapt,” says Bob Wagener, executive vice president of sales and marketing for Roomlinx, which delivers a competing service to hotels. “The company was reluctant to do anything that interfered with its primary revenue source of selling movies.” He points to the 2011 introduction of Envision, LodgeNet’s interactive product, which added some apps such as a local flight information screen to the traditional video-on-demand offerings. But, since it was an RF (Radio Frequency) system like its legacy product and not IPTV (Internet Protocol TV) it didn’t allow for the Web-based streaming of movies or music. “Hotel guests are now looking to select from an increasingly vast menu of entertainment options during their stay. Netflix changed the business model so consumers are now used to paying for streaming content.”


Meanwhile, others moved on. Case in point: at the Hotel 1000 in Seattle, an independent property that prides itself on its technology, guests often prefer to plug their devices into the TVs and bypass the hotel’s 60 high-definition channels, says spokesperson Kirsten Andresen. “This way they can bring their own content yet utilize the large, flat-screen high-definition TV with superior pictures and sound quality,” she says.

“The business model is rapidly changing and new technologies will need to be introduced in order to accommodate the new normal,” Andresen adds. “Guests are bringing their own devices with their own content and they expect a certain ease of use when it comes to pushing their content to the hotel’s hardware. Also, hotels must be aware of the need for large, stable bandwidth in order to accommodate the huge influx of streaming content from user devices.”

Bjorn Hanson, divisional dean of the hospitality school at New York University, says the shift in how guests watch TV is largely driven by age. “Younger travelers have a high propensity not to watch TV, but to watch some kind of Internet content.” That demographic might resist paying for a movie on TV but they might pay more for online access.

“Older travelers do like in-room entertainment systems,” Hanson continues. “It’s a traditional way of passing the time in hotel homes. For families, the TV is important as opposed to each kid bringing his or her own computer.”

Hotel operators will have to navigate this transition away from the pay-per-view model to some kind of Internet-based model, with their choices depending on their technology budgets and the expectations of their particular guests.