Transform a Loss Leader Into a Profitable Investment

If you’re a hotel manager, I don’t need to tell you that guest room telephones are not revenue generating and if anything, are costing you real money! Yet, they are required because guests expect them to be there even if they don’t use them.

Marriott tried to increase their telecom revenue by blocking guests’ personal Wi-Fi. Instead of focusing on customer satisfaction with their BYOD experience, Marriot forced guests to pay fees to access the hotel’s Wi-Fi service. This resulted in a $600K fine and negative publicity that wiped away any financial or good-will benefit. Obviously, this wasn’t a good way to increase telecom related revenues!


Hotel managers are under pressure

The challenge for a hotel manager is to deliver more telecom services to their guests for free while making it a profit center. This is true for Wi-Fi services as well as for telephony. So how can a hotel maintain the profitability of its communication systems when “telephony in the room” is not used anymore and services are expected to be free?  

I believe that by looking at telephony as only a profit center misses an opportunity to be viewed as a communication and operational tool that complements the customers’ BYOD desires.


Communications - the heart of every business

Every hotel would like to see their PBXs disappear and take their problems and costs with them. However, we are far from it because communication remains at the heart of any business involving human processes. I don’t know of another business where human contact is as important as in hospitality.

Hotel managers need to offer guests a way to communicate their “must-have” service requests (front desk, concierge, room service, laundry, etc.) in an easy manner at no cost. Some of the new ways to communicate to consider include:

  • Deploying tablet applications that make phone calls unnecessary. For example, housekeeping can be requested to pick up laundry in room 123 using an application on an iPad.
  • Supporting BYOD (bring your own device) - Guests want to communicate with their own smartphones.

The first step is to pick only applications that make sense for your hotel, maybe softphones and video conferencing, and features such as click-to-call.

If guest Wi-Fi is a compelling enough item to support with broadband, then cloud applications will become a good way to increase revenue (PMS, Revenue Management applications, etc.)


Telephony as a Service

I am a strong believer that Telephony As A Service (TaaS) for the hospitality market will be part of these cloud apps. This means:

  1. No PBX in the hotel- Less CAPEX, less OPEX as maintenance of the PBX is eliminated.
  2. No need to change hotel cabling- Existing room phones can stay as they don’t need to change to move to TaaS.
  3. Prepare for the future- When you buy as a service, you do not have to worry about the underlying system, you just have to worry about the vision of the one delivering the service. Just be sure that the service you buy is ready for the future: Guest softphones, video, etc.

TaaS for hotels will revolutionize the way hotels consume communications and transform your communication costs into a profitable service investment. If you share my vision or if you think the future will be different, please comment this blog post.

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