Bedroom technology key to future hotel profits

Techno-ignorance and lack of customer knowledge is costing Europe's largest hotels a fortune. Despite investing over £150m a year on interactive guest room technology, few are maximising the return on their investment and almost none are capitalising on guest room technology to increase their market share.

But it could be very different. The findings emerge in 'GuestLife', a comprehensive European study into what guests really want from their hotel rooms. Commissioned by Quadriga, the leading European provider of hotel guest room technology, the independent study shows that hotels are missing out on a hidden profit centre - the hotel bedroom. There is a potential goldmine of added value services that, with a relatively small effort, could unlock a complete cultural shift in the relationship between hotels and their guests.

GuestLife reveals that hotels need to pay much more attention to guest room technology, since almost 90% of the research sample stated that they were actively interested in this type of facility and for some this provision would even impact on their future choice of hotel. The level of use of guest room technology is on the rise and guests are increasingly viewing services such as internet access to be as necessary as a swimming pool or gym. Innovations in this field are set to accelerate because guests are actively choosing one hotel in preference to another on the basis of the offering of technology features.

Inadequate Promotion
Quadriga estimates that the major international and national hotel chains in Europe are missing out on at least £50,000 per annum (for an average hotel size of 150 bedrooms) on the lost incremental revenue opportunity of not capitalising on the awareness of current TV based services. The findings suggest that the most significant failing is effective room based promotion, which is not communicating the full range of available services and breaching the knowledge gap between the TV and guest. A well-targeted and marketed approach would have the likely result of a major increase in hotel revenue by promoting greater awareness and ultimately improving the image of Pay TV services.

When confronted with the service, guests currently revert to familiarity. For most people the TV is still seen as a box providing a limited number of channels rather than an information centre that allows the user to access a whole range of services from surfing the Web and viewing their bill to booking a tennis court. Hotels have the significant challenge of awakening guests to the exciting opportunities that their services offer. Presently, 41% of the sample switch on their TV and 17% switch between the TV channels within the first half-hour of arriving in a hotel room, yet only 6% look at hotel services via the TV.

The independent study was carried out by research company, Diagnostics Social and Market Research, and comprised interviews with 488 business travellers across the UK, Italy and France. It clearly demonstrates that this is a story of lost opportunity, since guests are interested in services available from the hotel. Almost a quarter opt to read about them in the first 30 minutes of their stay from the in-room literature provided. Turning guests on to the potential of their televisions and allaying unfounded fears about hidden charges is, however, proving to be a more difficult task.

Internet access is a motivator Over two thirds of business travellers were actually aware of at least one TV based service. Perhaps not surprisingly, conventional services such as Satellite TV (50%), Pay Movies (39%) and Ceefax/Teletext (36%) have the greatest awareness. The research also shows that there are additional services that would actually impact on the choice of hotels made by business travellers. Connection to the Internet is one such motivator, with 30% of the sample stating that they would use this facility and 20% of those citing it as a service that would actually encourage their choice of hotel. Films and music whenever desired are also seen as powerful motivators for hotel choice.

Increased facilities in demand Guests in all countries want more not less facilities, such as printers in rooms to give written confirmation of all services ordered. The printer represents a vital record for many travellers. For example, whereas only 3% stated that they currently use the checkout facility via the TV, 23% would use this service if it included an instant receipt. There were also a high percentage of travellers who stated that they would be likely to use the TV as a local information resource if they had the ability to print out local area maps and local sight guides. Evidence of the desire for a range of future focussed services is provided by the fact that 52% of business travellers expect them to be available within one year, with a further 31% anticipating availability within two to three years.

The study provides international customer understanding, showing hotels that they need to view their marketing strategies on a nationality by nationality basis. A flexible approach based on differing national cultures maximises revenue opportunities. Upon arriving in the hotel bedroom, the French are more likely to unpack (67%), look out of the window at the view (57%), and check the bathroom (53%). In what psychologists describe as 'classic hiding behaviour' French women are also more likely to stay in the room to relax (42%). The British are more likely to switch between the TV channels (23%) and use the mini-bar (17%). The Italians are more likely to take a bath or shower (66%) and are less likely to do anything else. The research reveals a sophisticated international customer base with differing needs. Hotels that can respond to these needs will be best placed to reap the financial benefits associated with delivering customer centred services.

Alistair Forbes, business development director at Quadriga, commented: "GuestLife has provided us with a wealth of information about guest needs and the technology potential in Europe's hotels. It proves beyond doubt that hotels are sitting on a potential goldmine. With a small shift - evolution not revolution - they could unlock significant profits from their core asset - the hotel bedroom. We commissioned GuestLife not only to study business travellers' in-room service expectations, but more importantly because we were not convinced that hotels were capitalising on the huge revenue opportunities that guest room technology services offer.

"The findings demonstrate that our assumptions were right - very few guests currently feel motivated to check services such as bill preview, automated check-out, and room service. Guests still have a fundamental problem with using the TV as an information source. As a result, they are not willing to explore it or use it as an information tool as they see it as a conventional entertainment box. The challenge is for hotels to educate travellers in a fun way to let guests see that the hotel TV offers a great deal more than soap operas. If they get it right these type of services will offer a better 'hotel experience' by delivering guests added value, enhancing hotel efficiency and most importantly increasing hotel revenues."

About Quadriga

Quadriga is the world's third largest provider of guest room interactive technology services to the hotel market. The company works with leading manufacturers to provide a wide range of guest room services to local, national and international hotels from a single source. Its interactive services are currently utilised in over 200,000 hotel rooms world-wide and enable hotels to satisfy an increasing demand from travellers for in-room information and entertainment.

Quadriga's interactive solution is based on a communication card built into specifically tailored TVs which are monitored and controlled by a central computer system. This delivers an interactive main menu via the TV that introduces guests to a variety of information and entertainment services, including Internet access, movie selection, messaging and express check-out.

For the hotelier the technology delivers a solution that significantly improves management while introducing profit-making services to guests. Quadriga's services supply the hotel with up to the minute information including minibar stock control, room status, technical maintenance and billing.

Headquartered in the UK, Quadriga employs over three hundred people and operates in eighteen countries across Europe, including the Netherlands, France, Germany, Italy, Sweden, Denmark, Norway, Finland, Spain, Switzerland, Poland, Portugal and Greece.

Please refer to the GuestLife Executive Summary for a more detailed insight into the research findings.

Specific photography is available on request.

For further information please contact:
Anne Moir,
Tel: 0118 930 9375
Or: 0421 302818

Liz Andrews or Michael Hayman
Tel: 0171 580 8852
Fax: 0171 580 5035