In-room streaming entertainment will likely send hotel cable and satellite TV subscriptions the way of pay-per-view movies, but hoteliers don’t think the technology or the hotel industry is quite there yet.
REPORT FROM THE U.S.—One of the long-time perks of staying in a hotel room was guests would have access to channels they didn’t necessarily have at home, but now guests are bringing the shows and movies they watch at home with them.
Streaming entertainment has become such a widespread guest behavior that hotels have made several changes to accommodate that, including: upgrading in-room TVs to smart TVs to make streaming easier; upgrading their bandwidth to accommodate the increased demand on the network; and dropping pay-per-view movies because no one was paying for them anymore.
Given streaming’s growing popularity among guests, hotel company executives believe it is definitely the future of in-room entertainment, but cable and satellite TV still have a good number of years left.
It’s all about personalization, said Mark Hemmer, COO at Vesta Hospitality. People want what they have at home or better, especially the younger generations of travelers, he said, especially as lines between business and leisure travel blur.
People want to control their own destiny, so after working all day, they might only have two hours of leisure time and they want to spend it how they want to spend it, he said.
“What it means for us is, we have to provide them with what they are looking for,” he said.
As the younger age groups make up larger portions of the traveling public, there will be less demand for cable and satellite TV, he said.
“That’s down the road,” he said. “It will be eight to 10 years.”
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Cable is still going to be necessary for a while, primarily for local news and sports, said Mike Marshall, president and CEO of Marshall Hotels & Resorts. Cable and satellite services carry bigger sporting events through the ESPN channels but offer local sports teams through its local channels.
“I often question do we need to have HBO or premium channels anymore,” he said. “People can have their own stuff.”
On the other hand, there are a lot of guests who aren’t road warriors, he said. There are guests who only travel a couple times a year or might not be tech savvy enough to know they can use their streaming services in a hotel room.
The people who travel all the time might not need the hotel to provide TV channels for them to watch, he said, but there’s a large population of guests who don’t travel for business.
“They travel for leisure,” he said. “We have to be able to offer them the HBOs and Showtimes of the world.”
Looking ahead, the hotel industry does still have some runway left with cable and satellite TV, said Mark Ricketts, president and COO at McNeill Hotel Company.
“My generation still wants that choice of cable, even if it’s to complain I have 65 channels and couldn’t find anything to watch,” he said.
The cable and satellite TV companies are realizing people are moving away from their platforms, so they need to raise their game, he said.
Public areas, such as lounges, lobbies and fitness areas, are a likely place for cable and satellite subscriptions to hold on, he said. Having TVs in those areas showing different news or sports channels has a wider appeal to guests.
Because technology changes to quickly, there isn’t much hoteliers can do now to prepare for this eventual transition, Hemmer said.
“Anything I put into place won’t work in five or even three years from now,” he said. “It will be a ‘let’s cross that bridge when we get to it’ thing.”
Investing in bandwidth
While dropping cable and satellite subscriptions equates to a cost savings, hotel execs said that money would still end up being used for guests’ entertainment.
Hoteliers could throw that saved money into providing increased bandwidth, Ricketts said, but there isn’t always a quick fix when there are bandwidth problems. If a guest encounters a dirty room or an air conditioning unit that’s not working, the hotel staff can move them to another room or make a repair, but bandwidth doesn’t work in the same way.
“If you don’t have internet, you’re fixed,” he said. “There’s not a service comeback from that.”
Even with regular TV subscriptions, Marshall said his company has had to expand its bandwidth and Wi-Fi capabilities at its hotels. The average guest brings three Wi-Fi-enabled devices with them, he said.
“A lot of people are downloading movies and TV shows to watch on their flight for the next day, so we need the ability to download that kind of stuff,” he said.