Hospitality: Demonstrate value Features 18/05/2020 Cost, return on investment and customer experience dominate the hospitality sector in APAC. Hurrairah bin Sohail finds out how these factors impact the work and business of AV professionals.According to Kelvin Ashby-King, principal consultant at T2 Consulting Group, the hospitality sector has significantly shifted in Asia Pacific over the years. He says: “In terms of the overall market, there is a big change and it is probably most evident in India. We are seeing that major cities are becoming saturated which means that hotel development is moving to the second and third tier of cities within countries. We are also seeing a rising number of three star and four star hotels. Additionally, we seem to be coming around to a cycle of upgrading for established hotel properties.” The developments in the hospitality market have changed the dynamics of how AV engages with its clients in the sector. Ashby-King says: “We are not just working with hotel operators but also with the developer and it is the mindset of the developer that has seen the biggest change. Developers need to deliver the project within budgets and prices and with speed. So for AV, there is continual conflict. For us, sometimes we find that we end up being the meat in the sandwich.” He continues: “We are working to serve the highest need but also working within the requirements of the developer. So, maintaining standards and ensuring that the property comes out with the standards set by the operator while staying within the cost parameters of the developer is hard work. You straddle both sides. You are paid by the developer but your responsibility is to the operator. You have to pull backwards and push forward to help both parties find a compromise.” Finding this compromise is not simple. More often than not hotel chains have a global standard that needs to be met. But the divide between the operator and the developer means that there is friction. Ashby-King details: “Hospitality is trying to create great customer experiences and AV is trying to help it deliver a consistent product across different sites. If you are in charge of a hotel project, you need to ensure that the quality of the products matches or is generally in line with other properties throughout the region. But, with having to come in on or sometimes even be under budget, the pressure of AV systems is amplified.” AV systems need to demonstrate value. Ashby-King says: “The decisions about AV depend on whether AV is seen as a revenue stream by the hotel. There are certain projects where the ballroom and the function rooms are very bare. The infrastructure for AV is there but the end points, like speakers for example, are hired based on what is required. On the other side, you have hotels that are investing in AV to provide a rounded out solution for their clients without having to engage external third parties.” Unfortunately, it seems that AV’s message is not being received. On the side of the hotel owners, risk mitigation seems to be the number one concern when it comes to operating their event spaces. Ashby-King says: “The trend now is for hotels to go threadbare because they aren’t very good at making money from audio visual strength. The market is still very much demanding AV solutions from hotels, but the hotels themselves do not want to take responsibility for a failed event. Risk mitigation is something these brands consider at every stage of the development and operation of their properties. Managing AV systems at hotels requires quantity and quality of staff that can deliver high end production work.” Shifting over to the side of event organisers, not surprisingly bettering their bottom lines is their main aim. Ian Harris, president and principal consultant at ihD, adds: “About 60% to 70% of hotel events are done by outside contractors. The event organiser, they always want to bring in rental companies because they can make a profit from that. They don’t want to trust a hotel AV system with their client, they would rather engage a rental company that has a track record and spares so that not much can go wrong. But rental companies have their associated costs and these are being passed on to the guests.” In the face of these two trends, audio systems for hotel projects are being scaled back. Background music systems [BGM] now encompass just the main lobby areas, lift lobbies and the restaurant and spa areas. In the ballroom and function area, line arrays are being eschewed. Ashby-King says: “The ballroom and function facilities are typically the first place where we start looking to value engineer.” With regards to BGM, consolidation on the side of the manufacturers is shifting the paradigms. Ashby-King details: “We still look at maximising value with all our designs by going with best of breed. However, the one stop shops like Crestron, Biamp, Harman and even Bose to a certain extent now, going with them for the BGM can get us price advantages. The market is changing, one company can make a strong claim at being able to do it all [for BGM] and this is causing a shift. Manufacturers are now acting as the direct sales agents. They are going out to new hotels and they are pushing their full solution.” Harris maintains that audio cannot be deprioritised: “When it comes to audio, the choices are going to be dictated by the space. The tuning can also make a huge difference. It is crucial to properly analyse the ballroom space but in most cases there are a lot of hard surfaces and ballrooms are difficult spaces for good sound.” Heavy impact It is not all doom and gloom for the AV industry when it comes to the hospitality sector. There are products which demonstrate value to hotel operators. Harris says: “The performance of LED is so starkly different from projection. There is the difference in contrast ratio with LED being vastly superior in this aspect. LED can deliver true blacks. And then there is the response from the consumers as well. When people see the word LED, they are excited, they’ve heard about it or know about it. So that is a testament to the marketing departments of the LED manufacturers. LED really comes with a ‘wow-factor’ and especially for the ballroom, hotels can use this to outsell their competitors.” However, projection is not completely out of the picture. Clyric Ng, engineering operations director at Grand Hyatt Singapore, says: “We have residential style event spaces that deliver a complete event experience for our guests. These event spaces can accommodate 10 to 2,200 guests. To offer best in industry support and capabilities we engaged Panasonic to deliver six wonderful projectors. Now the grand ballroom has an edge-to-edge display that is 20m wide and 5.5m high. The projectors are powerful and silent and they use laser technology which is easy for us to maintain. These projectors allow us to stay ahead in the competitive event segment.” It seems like even when AV demonstrates value, the final decision boils down to cost. Harris says: “The trouble is when hotels see the actual dollar value of these impressive LED displays, they are shocked. All the hotels want the wow-factor of LEDs but not all of them are willing to pay for it.” Ashby-King says: “The biggest problems arise when people have a superficial understanding of the technology needs of the hospitality market.” Harris emphasises: “I think a big part of our job is not to design or even coordinate the project but to educate the owners with regards to what AV technology can deliver and why it brings value and how it will provide a return on investment.” He continues: Let’s take something as menial as hang points in a ballroom. It sounds boring, but I have had long conversations about why I have specified so many hang points in a ballroom. If you have a proper grid of hang points, it provides the infrastructure for the space to be used in a myriad of ways. But they cost a thousand dollars and to an uneducated user that can seem like a lot.” Perceived value What is clear is that any investment in technology on the part of the hotel owners must deliver returns. Ashby-King says: “Hotels always want to add perceived value. Things like intelligent rooms, where devices can be connected to the technology with high speed, high bandwidth internet and control all the systems from their phone, this is something that hotels can see providing that perceived value and hence they are looking to invest.” He adds: “IoT is going to play a huge part in the hospitality sector. We have been exploring IoT in conjunction with things like RFID throw readers so that whenever you approach the concierge or any computer, the hotel staff can instantly access your name and photo on their screens. So, in terms of service, customer experience and even energy management inside rooms, IoT will have a huge impact.” Harris also believes that the future is interconnected systems that improve the overall guest experience while also offering savings: “We still find owners who want the old card slot in the room because of the cost of proximity sensors but these are becoming increasingly rare. Proximity sensors have become extremely accurate and from an operation standpoint the energy savings are huge and this means that hotels are willing to invest.” With IP networks serving as the backbone of these interconnected systems, what does this mean for AV? Ashby-King says: “The shift for us as a consultant is to be more in line with IT and the specialised design IT requires and integrators need to do the same. The AV industry as a whole is not moving quick enough and a lot of IT companies are adding on AV divisions and picking up work which is now tending to be fulfilled by the IT channel.” Harris concludes: “If you talk about the merging of AV and IT, I don’t think of it as AV losing its business. It is the other way around for me. Just like AV systems need 220V to power equipment, now we need the network to operate. It is just a matter of the AV industry becoming proficient with networking. On the other hand, learning how to do lighting, acoustic design and providing that human element that AV brings is not as easy.”