Recovering revenue
There are those in the industry who think content can still drive revenue—a worthy goal in the face of declining TV income. While revenue from pay-per-view movies is slipping rapidly, televisions—and more to the point Internet bandwidth—are expensive propositions. “The cost is second to electricity at some hotels,” according to Netzhammer. “You can offset that somewhat by movie sales, but it is a capital intense setup.”
There are installation fees for networks that support Internet access on TVs, and service fees as well. These are hopefully retrievable through charging for access; continuing revenue for paid content; increasing rate because of the quality of the service; and possible ancillary income from selling sponsorships of in-room dining or local websites with links to restaurants, with commensurate payment for clicking through.
A possible contributor to making the TV more valuable to guests—and to operators—is their use for meetings. Part of a meetings package might be the ability to stream sessions into guestrooms or send customized messages to event attendees. New technology even allows hotels to turn on the TV with a message or alert, displaying for example, that a conference session is starting in 10 minutes.
And, if the resources are available, it’s still possible to wow guests with the hardware. All 1,001 rooms at the Omni Dallas have TVs built into the bathroom mirrors. “We wanted to be competitive in the convention business and this was a way to give guests more than they expect,” says Larry Magor, the managing director of the hotel.
The TVs also offer an interactive tour of the local artwork that is displayed throughout the hotel, including four original pieces in every guestroom. Guests can click on specific pieces to learn more details. “We also have room service available on the TV, as well as using the set as a way to communicate to guests,” Magor says. “We might tell them that a wine tasting is being held, and we can do that even if the TV is turned off.”
Henry Harteveldt, a travel industry analyst with Hudson Crossing, says guests are less concerned with what’s being shown on in-room TVs now that they can connect their own devices. “The challenge is to have unique content that’s difficult to get otherwise or is non-traditional—content that appeals to key niche markets,” Harteveldt says. “Perhaps a hotel has a large number of non-English speaking guests from a specific country, and there might be content customized for that market.”
While hotels enjoy promising an experience “like at home or better” for a variety of services, including TV, that is difficult in most cases. “The kind of interactive menus that people have at home from their cable provider have been difficult to get in hotels,” says Omni’s Netzhammer. “Until the technology changes, you’re probably not going to see the 500 channels you get in homes. But you will find the channels that most people watch.”
