Does the Cloud Make VoIP More Hospitable?
Does the Cloud Make VoIP More Hospitable? by Dave Michels
The hospitality industry is a laggard when it comes to adoption of VoIP. To this day, a brand new hotel is far more likely to install analog phones to the room – even on a VoIP system, than IP phones. It isn’t fear of technology, analog has remained a cheaper more suitable fit. The question is – does the cloud change that?
Some hotels use IP phones in the rooms – but they are the exception. More and more are using IP phones at the front desk and business areas of the hotel. But the guest room remains stuck in time, in technical terms analog POTS.
VoIP emerged on the scene in the early 2000s. It wasn’t cheaper or better, and it required a more capable LAN infrastructure. At the time, analog lines were still required in the room to accommodate modem users. LAN cabling was not common to the rooms, so the infrastructure upgrade was significant. On top of that, the popular benefits such as telecommuting and reduced cost associated with MACs offered zero to low draw (hotels have very few moves, adds, and changes).
The technology progressed. Soon hotels were expected to have broadband in the room – hotels started implementing wired and/or wireless solutions, but IP phones were about five times as expensive as analog phones. Also during that time, cell phones were beginning to cause a drop in hotel revenue associated with long distance.
Today, the hotel room phone is primarily used for internal communications. The number of trunks required at a hotel continue to drop. The hotel phone system offers very little revenue opportunity and is mostly now seen as a cost of business. The only reason the phone is still in the room at all is because it is required for a two star or higher hotel rating.
That doesn’t mean hotels don’t leverage the telecom investment for other services – the phones are used for several tasks including messages (including coupons and ads), wake-up calls, and housekeeping staff use it to log their progress. Most hotels use a PMS or property management system to manage guest accounts and hotel activities. Housekeeping generally calls into the PMS when they clean a room informing the front desk that the room is available for check-in. Integration with the telephone system is a standard feature of a PMS – it is also how long distance usage is tracked (if ever used).
There are two aspects to hotel VoIP – the system itself and the guest rooms. System benefits generally offer improved remote management, reduced cost of MACs for the business areas, and the ability to use SIP trunks. Most new hotels are putting in hybrid systems to realize IP benefits for the business, but deliver analog service to the guest rooms.
The rooms mostly remain analog, but IP phones offer benefits at higher-end properties. IP phones offer the elimination of separate cabling. Hotels could potentially sell ads on the phone that range from color picture ads to speed-dial settings like “Pizza Delivery.” Some vendors are creating optimized phone-top IP applications for hospitality that make it easier to request a car from valet parking, book a tee time, or check out. IP phones could also be designed to be a mini access point to support the increasing number of tablets.
Two issues are keeping IP out of the rooms: complexity and cost. The local staff just don’t have the time or skills to deal with complex phone systems. Even selling local ads isn’t worth the cost or effort of replacing the system, though these benefits could be more attractive regionally, or even nationally. IP systems make a lot of sense for the business phones, but room phones are likely to remain analog for now due to the cost disparity of the endpoints. IP phones continue to get cheaper, and maintenance of copper lines continues to rise. Eventually, the phones will become IP.
The cloud could be the catalyst to speed things up.
There is a channel opportunity lurking in hotels. The fact is all this stuff -–telephones, PMS, Internet, and cable plant are liabilities that the hospitality staff and owners want to minimize. They certainly don’t want to deal with it when it breaks (which is always late at night). This has outsource written all over it, but it hasn’t been a feasible alternative in the past.
The current technology is creating opportunities for hospitality providers that specialize in hotel technical infrastructure: a hosted provider of not only voice, but PMS, Internet access, premises infrastructure. Several hybrid IP systems now support a gateway mode – where the on-premises solution is effectively a gateway controlling all the analog rooms. Centrally managed and controlled – integrated into a multi-tenant web based PMS – backed by a 24-hour help desk and NOC, could be the ticket to get hospitality VoIP.
New opportunities such as charging a lower rate for unused rooms (room usage is determined by the PMS) or the ability to provision employees and staff at each location can make this a compelling solution for hotels. The cost to create and implement specialized apps for things like valet parking or the cost associated with selling speed dials could be spread across an entire region. All the necessary infrastructure a monthly cost/service – most of which resides offsite – out of sight and out of mind, hasn’t been an option for most hotels.
I’d love to take full credit for the idea, but I can’t. It isn’t even a new idea. It is however, a channel opportunity because generally speaking, the PMS vendors don’t make phone systems, the phone system vendors don’t offer PMS. The full solution requires Internet and support.
This is not a small opportunity. There are a lot of hotels out there – most of which are struggling to keep up with Internet demands and aging infrastructure. Meanwhile, there are lots of channel partners seeing consumerization and thinner margins squeeze profits.
What do you think? Is this opportunity fact or fiction? Is this what hotels want?