The hospitality industry's vision of a hotel replete with stylish rooms and next-generation electronics is crystallizing. And high-definition TV (HDTV) is expected to be the centerpiece.
Emboldened by the steady stream of HDTV sets into consumers' homes—expected to reach 34 million by 2008 and 70 million by 2009, according to the Diffusion Group—most of the larger hotel chains now see the addition of HDTVs and their peripherals as a competitive tool.
“In the long run, all rooms will have to have HD,” says Bruce Leichtman, principal analyst for LRG Research.
Virtually all the major hotel and resort chains are surrounding the in-room HDTV panel with connectivity and extending a guest's home into a sleek, coolly designed hotel room. In Macao, where Steven Wynn and other upscale hoteliers are building massive casinos and hotels to serve Asian travelers, rooms have built-in HD sets surrounded by expensive custom frames.
“The message is, business travelers can go to a hotel room, connect all their digital devices and watch HDTV,” says John Wolf, spokesman for Marriott International Inc., which plans to add HDTVs to about 160,000 rooms by the end of 2009.
“Next level of technology”
Hyatt, too, is jumping on the HDTV train and will place 42-inch flat-screen sets in 120 of its Hyatt Place hotels. “It's the next level of technology,” says Richard Morgan, senior VP/managing director of Select Hotels, a wholly owned Hyatt affiliate. “Guests can bring their iPods and use HDTV speakers and connect their laptops through Hyatt's plug panel. We are using HDTVs as the lead-in to our new advertising campaign and marketing efforts.”
The HDTV migration to hotel rooms isn't without technical and logistical gremlins, though. And true digital-quality HDTV comes with a price, and a new set of equipment and maintenance issues.
“Hotels are trying to keep up with the technologies in living rooms and playing catch-up,” says Russell P. Reeder, president/COO of NxTV Inc., a provider of in-room entertainment systems. “But there's a huge barrier to entry with a 100%-digital system. It requires all new equipment, cabling, players and more. And digital rights management is a huge issue with studios. They're very wary of giving premium pictures to people they can't trust.
“We're all going to IP [Internet Protocol], including hotels, and we're much farther along than you'd think,” he adds. “But a lot is only encoded HD, so it's no big deal unless digital signals go to HD, and that takes a whole new system. But without a doubt, we're all going to HD.”
LodgeNet is providing HD service to 20,000 hotel rooms, with 80,000 more under contract. And the company is acquiring its closest rival, On Command, for $380 million, lifting the merged companies' room total to nearly 1 million, Those aren't all HD-ready, but the extra rooms suggest lots of room to expand.
“We recognized that hotels would figure out that traditional analog TV wasn't going to be satisfactory,” says David Bankers, senior VP of products and technology for LodgeNet. “We've built a Pro:Idiom security system into the TVs since commercial TVs have a number of dimensions different than consumer HDTVs, like security, volume limits, different warranties and delivery services.”
Chris Sophinos, president/CEO of On Command Corp., says that, for hotels, “having a robust, high-quality HD 1080i picture with quality sound on a 42-inch flat-panel TV in the room and allowing portable devices to be connected to it is their goal. So HD is a huge opportunity for us.”
