The Future of Hotel In-Room Entertainment

Episode Transcript

Robert Grosz: When the guest walks into the room, the TV automatically comes on and welcomes the guest with their name, even their loyalty membership level that they’ve achieved that makes them feel good inside, that the hotel understands that automatically, and then it shows them the channels that they watch the most without even them thinking about it. That just creates an amazing experience. There is a huge future for computational power, not just AI, but this computational power in pushing computational power closer to the guest. 

Robin Trimingham: Welcome to the Innovative Hotelier podcast by HOTELS Magazine, with weekly thought provoking discussions with the world’s leading hotel and hospitality innovators. Welcome to the innovative hotelier brought to you by Hotels magazine. I’m your host, Robin Trimingham. Once upon a time, virtually all hotel had to do to differentiate itself from the competition and attract customers was post. We have HBO in bold letters on an illuminated sign at the end of the driveway. But times have changed to the point that each guest checking into a hotel may already be carrying three devices capable of providing or accessing entertainment, leading some industry experts to argue that revenue derived from traditional in-room entertainment is a thing of the past. But is that really the case? Today, we’re going to take a look at not just how the technology has changed, but more importantly, what it takes to make in-room entertainment for guests an important guest amenity once again. My guest today, Robert Gross, president of WorldVue Connect Inc, is here today to offer his insights regarding how this service is evolving and how to keep pace with fluctuating guest demands. Join me now for my conversation with Robert. F.O.H is a global food service and hospitality company that manufactures smart commercial grade solutions headquartered in Miami. The company designs and manufactures all their restaurant and hotel products. They have showrooms and distribution centers located throughout the globe, and their products are always in stock and ready to ship from any of their distribution centers worldwide. Welcome, Robert. It’s a pleasure to meet you. 

Robert Grosz: Great to meet you, Robin. Looking forward to this. 

Robin Trimingham: I will admit I wasn’t personally familiar with your company before I found out that we were going to get a chance to chat. So I did my homework. You guys provide services for 900,000 hotel rooms throughout North America. That’s quite a few. But like myself, maybe there are some other listeners who aren’t familiar with your company, so maybe you could start by telling us a little bit about what worldview does. 

Robert Grosz: Absolutely. We’ve actually been around for almost 50 years, and from day one we’ve been focused on providing technology and hotels and guest centric venues, resorts, some apartment communities, some hospitals. So we’ve been a prompt tech company way before Proptech was cool, and over the last 50 years, we’ve seen a lot of evolution. Some clients have changed dramatically, the brands have grown up, and now we cater to both the brands, the owners of the hotels, as well as the associates who operate the hotels and of course, the guests who stay in the hotels. So we like to think of ourselves as an experienced company. We’re providing good experiences through the use of technology in guest centric properties. 

Robin Trimingham: Well, I go back at least as far as HBO, so I can remember the great big I can remember the great big billboards on the side of the highway. We have HBO, and that’s what you needed to lure people in back in the day. But things are different now. How has the characteristics of the typical in-room entertainment user evolved during your watch? 

Robert Grosz: Well, it’s evolved tremendously. I do remember the days of we have HBO or we have Colored TVs, which were a prime marketing driver for getting guests into the hotel. We’ve seen it become an amenity that people have advertised to bring guests in to a necessity, like plumbing or electricity. And you need to have a great Internet solution at your property, a Wi-Fi solution. You need to have great entertainment. And that entertainment has to be both what the guests want to watch. So your basic linear television content, which is now high quality every second that you watch it, too content that is on demand, content that allows the guests to bring whatever they want to the hotel and watch it on the big screen, whether that’s their local Netflix account or other big streaming accounts that’s been very, very popular. Taking content from a mobile device, a smartphone and being able to cast it to a television set. That’s been a big popular thing that’s happened in the last few years, but also making the hotel more efficient how they operate. So instead of having paper compendiums on the desks of the credenzas in the hotel room, you now have the ability to take that and make it a digital compendium without the need of paper, without the need of your hotel housekeeping staff to maintain what exists in the hotel room or not. You can do that now almost virtually via the television screen. And I think you’re going to see a lot more of that as we migrate more to. Words online ordering customer service centric around text messaging, things like that. So it’s really evolved from an entertainment medium to an infotainment medium, and we’ve got a lot more efficient, a lot more feature rich. And I think we’re really leveraging that horsepower of technology and how we affect an experience in the hotel room. 

Robin Trimingham: And I have to say it’s about time in some respects. How would you say, though, that the pandemic has impacted or maybe even fast tracked customer demand for in-room entertainment? 

Robert Grosz: Yeah. What happened in the past few years here really reinforced that that connectivity as a need where all of a sudden you took meetings from your hotel room or from your home that were in person and you needed the technology to back that up. So I think it’s really reinforced the need for solid connectivity and the need for a rich media experience that can be delivered to either a smartphone or a laptop screen or a tablet or the big screen TV in the room. And it wasn’t necessarily that the the pandemic, I think that would have happened anyway. I think the pandemic sped up time a little bit in terms of that need. And I think, like I said, it was going to happen. It was already happening. But now we’re light years ahead of where it was. So I think that that has been a very positive thing, the trajectory of bringing technology closer to the guests. The hotel industry from a technology standpoint, is not necessarily a first mover. And I think that it really pushed that the hotel industry to embrace technology as a core, fundamental, foundational element of the hotel itself, where digital infrastructure is now just as important as a roof over the building and good parking lots and and clean rooms. You have to have technology as a cornerstone element of the guest experience. And I think the last few years have really reinforced that. 

Robin Trimingham: I have to say that I agree with you. I have a fairly robust hotel background myself. Let’s talk revenue, because that is the language that a lot of our hotel listeners will be looking for for a long time. Important revenue streams included in-room Internet use fees and then revenue from pay per view movies and things like that. But now, as you’ve pointed out, just about every guest who checks in brings with them at least one device that’s capable of streaming games or entertainment all on its own. So some people are going to be arguing that these original revenue streams for in-room entertainment, they’re all gone for good. What’s your response to this? 

Robert Grosz: Yeah, I think that that revenue streams, like any video on demand movie or revenue streams collected from the access of Wi-Fi in the guest room. I think that those have always been marginal in terms of incremental revenue growth. I think what happened is that those things became an experience item and that experience item drove memorable experiences in the hotel room. So if you were charging a small fee for a movie or for access to the Wi-Fi and it was a poor experience and created friction in the guest experience, it quickly collapsed itself into, well, what am I able to get for a room in terms of the room rate per night? Or what am I getting in terms of guest loyalty? Are the guests coming back again and again? So rolling those things into the experience where it’s rolled into either a technology amenity fee or a resort fee or the room rate itself? I think it’s been a very positive thing for hotels, even from a bottom line standpoint where they’re driving more guest loyalty because of the great experiences they’re providing via technology. So although it’s easy to say, okay, I’ve got a separate line item on my PNL for Internet service or upgraded Internet service or a movie. 

Robert Grosz: Oftentimes that line item was so small as it relates to the incremental bottom line impact that they started looking at the experience you’re providing and what happens at the front desk when you’re arguing against these fees because maybe your Internet was glitchy or you weren’t able to enjoy a whole movie because of cut out, right. That it became more of a question of how do I maintain loyalty? And that’s why you started seeing wi fi become inclusive if you’re a loyalty program member. And I think that will continue to evolve. Like I said, it went from a nice to have to a must have. Now we’re at the same point as electricity or plumbing or water in a hotel room. This technology is just it’s a must have and it must be good. And that drives the guest experience, which drives more top line revenues and. Prize, more loyalty, prize, longer guest stays, things like that. I think it has a dramatic impact to the bottom line, even though you’re not charging piecemeal for it. 

Robin Trimingham: I think there’s quite a few hoteliers out there that would absolutely agree with your point of view. Let’s talk about what happens in some of these legacy properties, historic venues, things like that. They want to jump onto all of the things you’ve just mentioned and create a more robust experience, product differentiation, all of that good stuff. And as a consequence, they just say, Well, we’ll just install Wi-Fi because everybody else is doing that and we have to have it too. It’s like the plumbing, as you said, but they haven’t really understood what they were getting themselves into either from a financial perspective or more importantly, the infrastructure consequences. Why is it that it’s so important and yet so challenging to put Wi-Fi through a pre-existing hotel building? 

Robert Grosz: Yeah, you’re talking a historic building or a building that’s existed for a while. For a while, yeah. Yeah. I would equate it to having to run electricity or plumbing in a building like that. It’s something that you have to make sure that you are designing correctly. You have to have a professional that knows what they’re doing to architect the solution, measure twice and cut once, especially in an environment like that. So I’ve often seen people undervalue the planning aspect of things. Maybe they cut corners and maybe they just went to a local provider that wires offices for internet. They’re not familiar with the hospitality arena. You get what you paid for there, right? You want someone that knows the hotel business inside and out and has been in situations like your situation time and time again to be involved with you and be the expert to design these things. And then of course, the execution of project management of of taking new cabling inside of a building or building out a wireless network where you have to put the wireless radio at certain places and it has to be pointed in the right direction, at the right height with the right density. 

Robert Grosz: All of those things matter to the end result, which is a great connectivity experience and one that has a long, useful life. So you want to have that expert involved, that great partner involved in designing these things, deploying these things and then operating them on a day to day basis. I’ve seen situations where that hasn’t been the case and it’s been very, very costly. I would say ten times more costly because of a poor system where you never really got what you wanted in the first place, but you still spent a lot of money doing it. You want to avoid those situations. So choosing the right partner, just like choosing the right architect in a building or the right interior designer in a building is very, very important and it pays for itself. It’s the same. It’s the same philosophy with doing a project improvement plan associated with really any sort of technology, whether it’s Wi-Fi, in-room entertainment, digital signage, security cameras, common area security cameras, phone systems, all of that stuff is a specialty. And you want to go with the partner that knows those businesses very well. 

Robin Trimingham: Established in 2002 F.O.H is a woman owned global food service and hospitality company that manufactures smart, savvy commercial grade products, including plate wear, drinkware, flatware, hotel amenities and more. Driven by innovation, F.OH is dedicated to delivering that wow experience that restaurants and hotels crave all while maintaining a competitive price. All products are fully customizable, and many are also created using sustainable eco friendly materials such as straws and plates made from biodegradable paper and wood and PVC free drinkware. F.o.h us to establish brands front of the house focused on tabletop and Buffet Solutions and Room 360, which offers hotel products. Check out their collections today at FOHWorldwide.com. First story for you very very briefly. I wonder if a lot of hoteliers really understand the pressure that their bandwidth can come under and also scalability when they suddenly are hosting something like a conference. I know a property that suddenly decided they booked a great piece of business because they were going to have the World Junior Sailing Championships. Not really realizing that world Junior sailors are Gen Z who travel with at least three devices each and use them all simultaneously. And they booked for kids to a room. We’re talking 12 devices, one room through floors of the hotel. Needless to say, they learned a couple of things from this experience the hard way. What advice can you offer regarding how you would suddenly handle what I’m going to call like a dramatic increase in need? However, that was caused. But maybe it’s only temporary. 

Robert Grosz: Yeah. A well designed and well managed network can handle that sort of capacity. Not without a problem. So when you’re talking about density in terms of users and user devices or guests and guest devices, a good network should be able to handle that and manage that and apply policies that allow everyone to enjoy connectivity throughout the hotel and every device without problems. However, if you have a poorly engineered or poorly managed network that that isn’t accustomed to managing density, you’re going to have problems and you’re going to have problems really quickly. And unfortunately, it effects when you have problems with congestion and that type of an environment. You’re going to have problems with every connection and every device. So it’s going to dissatisfy every guest. So that’s why this is so important. Technology and the hospitality environment is not a what I call check the box type thing. It’s not something that you say, okay, I have to have a Wi-Fi network or I have to have an in-room entertainment system and you just check the box because you’ve made a decision. You’ve got to research. You’ve got to look at references. You’ve got to experience what they do and what they do in venues that are similar to your venue and ask questions about experiences like you just mentioned. Have you ever experienced this? That’s a great one, by the way. I think that’s a great example. Robin. I really like that. Ask the right questions and if the answer is, Yeah, we had a nightmare of a time, then that’s not the right solution provider. It’s not the right partner for you. They might be great people. They might be very local right down the street. But if they don’t have the right experience, then it’s not going to be the right fit. 

Robin Trimingham: So another true story for you, because I’ve worked for several different historic properties along the way. Sometimes the walls are unbelievably thick in these really old buildings, and the Wi-Fi just does not travel through the air the way it would in a more normal building or modern building, I guess I should say. And so and I’ve seen hotel I.T. people say, oh, well, don’t worry, we’ll just throw up a few more extenders. What do you think of that as the solution? 

Robert Grosz: Yeah, no, that extenders are a terrible idea because it just creates more problems. I love the historic buildings that have the plaster walls, but the thing about plaster in a historic building is often there’s chicken wire involved and that’s metal. And that creates kind of a Faraday cage on a room by room basis, meaning you can’t get wireless signals in and out of the room very easily, nor can you get noise. So it makes for a good night’s sleep. But the best thing to do is make sure you have a hard wired connection into each room. And then at the end of that hard wired connection, a wireless access point, a radio that actually is has the intelligence to manage devices and be part of a managed Wi-Fi network. Same thing with television. Oftentimes, televisions run over coax cable. It’s still a good way to run television. It can be run over Internet protocol. That same wire that brings the wireless access point into the room can also provide a great IPTV solution, which involves interactive content and whatnot, but definitely the best Wi-Fi networks are powered by wires and you want to make sure that you err on the side of of doing that, if at all possible. Now if you don’t have the luxury of opening up walls or fishing wires through walls, there are other solutions that make your existing cabling more intelligent and more useful. There are solutions that involve Docsis cable modems. There are solutions that involve Gjn, which is technology that allows for great Internet connections to be delivered over older wiring. Those solutions are out there. Again, they’re nuanced expertise. It’s not something that’s plug and play. I wouldn’t leave this to just the ordinary installation crew to do. You need to have expertise in those technologies. But there are solutions and I’ll fall back on the last thing I was saying, which is find that amazing technology architect firm that knows how to both design, build and support. And make sure you’re using the best design because that’s going to save you a lot of problems and a lot of expense down the line. 

Robin Trimingham: Yeah, absolutely. Let’s change the subject just a little bit here. So. Skift which does all kinds of travel research, put out a 2023 research report on the future of hotel in-room entertainment, and they predicted that improving in-room entertainment was going to be a major emphasis for a lot of the hotel industry. How do you recommend that hoteliers evaluate the costs associated with keeping pace with all of these rapid advances in technology that you’ve been referencing at the moment? 

Robert Grosz: So the one thing you want to avoid is jumping on a bandwagon with a technology that’s just evolving and thinking that that’s going to be the long term solution. You want a platform that is going to stand the test of time that focuses on convergence of viewing experiences, like being able to cast content from your smartphone to your TV, because that’s got a very long, useful life, and I think that’s going to be around for a while. You want a platform that allows for innovation in the future, so it has to have some expandability and that expandability shouldn’t come to the hotelier at a cost. It should just be included in that platform. There’s a lot that can be done with software. Software is very, very important in terms of innovations and offering new things. Just look at what’s happened with smartphones and the functionality that you get from a smartphone today. You know, you can do everything from I’m sure we all remember the days when a phone was just for phone calls. Now, you take your photographs, you make movies, you get email and you surf the web. You can have applications for weather. You can have applications for stocks watching your investment portfolio banking. You could do anything with a smartphone. Try to get on that sort of bandwagon with your in-room entertainment as well. Look for platforms with app store concepts where you can expand these things, expand the platform based upon software and apps and not some proprietary, hard coded, very rigorous platform trying to look for more open platforms. That’s the state of the art today, if you will. And I also think that there’s a very interesting story. We spoke about revenue streams a little bit earlier. 

Robert Grosz: There’s an interesting story about how you can use your in-room televisions and your digital signage displays in the common areas and monetize those experiences. And that might look similar to having a deal with food delivery firm or your your in-house food and beverage facilities that allow the guests to scan a QR code to get a full menu experience order and have that order delivered to their room. And maybe there’s some revenue that you’re gaining from that, some profit in terms of food and beverage, right? It also improves the guest experience. So it drives loyalty. That’s pretty cool. It could look like doing something interesting for a group. So maybe you have a wedding party that’s at your facility for a few days and you can customize the experience on the TV when they turn the TV on to celebrate the couple being married and maybe even throw up videos as to what kind of events or experiences that they’ve had in the past and really made it make it an exceptional, memorable experience for the guests of your hotel. Beyond just providing great hospitality, anticipating their needs, and creating this venue, like that’s what you could do with the power of in-room entertainment technology. And we’ve only scratched the surface on that today because you can also look at using that same technology to do brand level partnerships with other local businesses or maybe national businesses. If you’re talking about a large brand where you can create some affiliations which generate revenue streams, those are the types of things that are really exciting. And you get all of that with software and apps and an open platform that allows you to be innovative for a long time. 

Robin Trimingham: Yeah, I think that’s very interesting because you’re definitely talking about a couple of things I hadn’t really thought of before, and I can imagine if you have something like a really large conference at somewhere like the Javits Center in New York, there must be tons of opportunities and applications for technology like this. We’ve been talking specifically about hotels, but I know that you guys also work with a lot of venues that are standalones and also venues attached to hotels. 

Robert Grosz: Yes, we do. Yeah, and huge opportunities there. 

Robin Trimingham: Tell me, because I ask everybody about AI and I’ve had the opportunity to talk to people developing some of the kinds of apps that you’re talking about. What’s the viability of apps that will somehow be connected to your smartphone, which is connected to the Wi-Fi? And then the app will say, Oh, you’re watching a movie. Do you want popcorn? 

Robert Grosz: Yeah, those are exciting. So two worlds of AI that I think could impact the hotel industry in a big way. One is boring, but it’s still very impactful. And that is how networks are managed today, where you can monitor a device like a switch or a router or even a TV screen, and you can see when something is starting to go south, like when something’s not operating, it’s operating out of norm. I can help us fix those problems before any human really even knows that there’s a problem. That’s the type of power that AI has in terms of network management, and that’s an operating type function for a network or a building system. You can even do that with your Hvac systems or your lighting systems. You can look at is it operating with within norm and then you can recognize a problem and hopefully solve it before the guest is impacted. That’s huge. 

Robin Trimingham: I love that one. What you’re reminding me of is all the times you check into a hotel in the past and the batteries in the remote for the TV were dead. And do you think you could get anybody to bring you a new remote? I can see that working and being appreciated all day long. 

Robert Grosz: Yeah, that’s a great example. The other side of AI, which is really the exciting side, is they’re both exciting, let’s be honest, but they’re really the heart of hospitality, which is anticipating the guest needs and being able to align what the guest really wants without them even saying that they really want it and being able to deliver something exceptional in terms of an experience in advance and AI and simply computational power that has gone wild and can look at a bunch of different data points and then create some automation and kick off different workflows because of that automation and intelligence, that type of thing can happen. So for example, I could be used if a guest checks into a hotel, they have a loyalty program, their loyalty profile is connected to their experiences and what they’ve done in the past at the hotel in terms of food and beverage, in terms of what they watch on TV. Maybe they they watch a certain news program. So when the guest walks into the room, the TV automatically comes on and welcomes the guest with their name, even their loyalty membership level that they’ve achieved. Because oftentimes travelers are very proud of that. They make them feel good inside, that the hotel understands that automatically, and then it shows them the channels that they watch the most without even them thinking about it. And that just creates an amazing experience. And so there is a huge future for computational power, not just AI, but this computational power and pushing computational power closer to the guest. That’s very exciting. The reason that I’m so excited about this business and then after 50 years, the company worldview is involved with these things. It’s just a very exciting time. 

Robin Trimingham: It certainly is. We’ve got a minute or two left here. Talk to us about the reality of the real risk that hoteliers are exposing themselves to if they’re not adapting their in-room entertainment offering and keeping pace with these huge changes that you’ve been referencing. 

Robert Grosz: Yes. So if you have your eye off the ball as it relates to that foundational element of digital infrastructure and technology and your venue, the experience your guests have compared to where they have been in the past or are going in the future in terms of hospitality experiences will become very, very obvious. It’ll be more difficult to bring occupancy to your hotel. It’ll be very difficult to possible to increase your rates. You’ll start to become more and more irrelevant in the guests minds and one could argue beyond even the location. So when I went to school for real estate and real estate was always about location, location, location that’s being disrupted. Location is very important to the property, but I think you have to deliver your guests what they need and it’s go back to the electricity and plumbing analogy, right? If you don’t have reliable electricity and your plumbing doesn’t work very well, the guest is going to decide not to stay with you. They’re going to go a little bit further from where they really want to be to stay in a place that has those things. So it’s a relevance formula. That’s where I think the bottom line comes down and it does impact your profitability. It impacts the value of the asset. It’ll also impact the value of or the ability to attract and retain good staff members if they’re constantly battling the negligence of not having good technology in the building, they’re not having a good day at work and they’re going to move along. 

Robin Trimingham: Fair enough. You may have already answered this, but what’s your key message for everyone who hears this broadcast? 

Robert Grosz: Digital infrastructure is as important as a roof over your head, as important as a good secure building. Digital infrastructure is a key element in operating and owning real property today, especially in the hospitality world. 

Robin Trimingham: Think that’s a good place to leave it? Robert, I want to thank you so much for your time today. It’s been a pleasure to meet you. You’ve been watching the innovative hotelier. Join us again soon for more up to the minute information and insights specifically for the hotel and hospitality industry. You’ve been listening to the Innovative Hotelier podcast by Hotels magazine. Join us again soon for more conversations with hospitality industry thought leaders.