Opinion: By Dave Millett, from Equinox
When someone is travelling, whether on business or for personal reasons, they look at three things when booking an hotel: 1. Location, 2. Price, 3. Facilities.
High up on the list of facilities wanted is WiFi. The next time someone asks about that hotel, you can guarantee the WiFi signal will be mentioned, especially if it was either a poor connection or an expensive one.
When travelling on business, people need a quality Internet connection. They need to be able to connect quickly and to be able to work effectively. They want a reliable Internet connection. Unfortunately, too many hotels believe all they need is a standard broadband connection. They are missing a trick. Here’s why… let’s consider what happens during and after a stay at a hotel with unreliable connectivity.
Reception is likely to get a complaint from the guest. “I’ve paid £XXX for this room and I can’t even send emails quickly”
Elsewhere for Dinner
If they cannot work in their room, they probably cannot work in the bar/restaurant either, because it’s on the same connection. So, they simply go somewhere else where they can get a decent connection. The hotel loses food and beverage revenues. Approximately £70 a day is spent by business people on food and drink. That can quickly add up.
Will they stay there again?
Unless they have no choice in the bookings, the chances are slim that they will stay there again. More lost revenue.
The number one complaint about hotel rooms is the lack of free WiFi. We all check review sites when considering purchases and we use them to help make decisions. More and more people are happy to complain nowadays, whether via social media or using a review site such as Feefo or Trustpilot. Poor reviews impact revenue.
Decent Wifi isn’t expensive
We recently upgraded the internet connection for a Scottish hotel that previously had a broadband connection. To pay for this, they needed to increase their occupancy levels by 0.2% or sell just two more room bookings over the year.
Why do calls made from your room cost so much?
The traditional view is that calls made from your room will cost a small fortune. Therefore, people don’t use the phone in their room, meaning the hotel misses out on revenue. This is circular; the hotel doesn’t invest in new technology because the phone system is considered an expense and doesn’t bring revenue, people don’t use the phone because… and round it goes.
Let’s look at the options.
Sweating the assets
It makes sense to get maximum benefit from all investments, so we understand why hotels keep a phone system for as long as it continues to work. However, there are costs being incurred and opportunities missed when doing this.
Phone systems over 5 years old lack an upgrade path and so have to have inbound lines to receive calls. A recent analysis of a hotel’s calls showed 17,000 inbound calls a month, adding up to £120 a month. Their outbound calls, to landlines and mobiles, added up to a similar value. Between them, that’s £3,000 per annum of cost because the phone system couldn’t be upgraded to use SIP connections, that provide free calls inbound and outbound.
Legacy phone systems also lack the ability to offer additional services to guests. Imagine being able to offer free calls to guests. Mobile signals are often poor in hotel rooms (due to the construction of the building) so, particularly, business people struggle to work effectively. If the hotel is in a rural location the mobile signal may be poor anyway, and then you factor in the building structure’s impact on the signal, making it even worse. Free calls could be a powerful marketing tool. You will probably want to charge for international calls, but they would still be far cheaper than normal.
Meeting rooms often generate considerable revenues for hotels. Being able to offer conference calls in meeting rooms would be an added value that will attract additional bookings.
It’s a big capital expenditure, isn’t it?
Between a third and half the cost of a new phone system is normally the handsets. If an average handset is £100, a large hotel could be facing a five-figure hardware invoice, just for handsets. However, most room handsets can be used when attached to a new PBX.
They don’t need to be replaced. The handset on reception and in the offices may well be replaced to provide additional functionality but that’s a relatively small amount. Recent projects suggest £15-20K would provide a new phone system for a hotel up to 200 rooms. Just based on the call savings above, the investment is repaid in five years. That is without the additional marketing benefit and revenues that can be generated from guests.
About the Author
Dave Millett has over 35 years’ experience in the Telecoms Industry. He has worked in European Director roles for several global companies. He now runs Equinox, a leading independent brokerage and consultancy firm. He works with many companies, charities and other organisations and has helped them achieve savings of up to 80%. He also regularly advises telecom suppliers on improving their products and propositions.
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