How to generate revenue off Hotel TV using IPTV tech

Hospitality TV Hotel TV

In recent decades the hotel business experienced increased competition after various hotel booking services started to spread. It is now far easier for a guest to compare booking prices in an area and select the optimal option, leaving more expensive offers behind. As a result, some hotels may show a decline in revenue. It might be your hotel and you will only notice that something is wrong when quarterly and yearly financial reports show such disparity with previous results. So, you need to plan some countermeasures in advance. One way to patch up such holes in the budget of your hotel is to offer additional revenue-generating services to guests who stay on your premises. In this article, you will find out how to upgrade your Hotel TV system with IPTV technology and generate extra revenue from it.

Hotel TV
This graph indicates an example of booking price drop, prepared by KriyaRevGEN

ROI of Hotel TV systems upgraded with IPTV technology

IPTV was a subject of huge investment in the last decade, following global IT trends. Fair enough, a hotel that follows TV hotel trends actually benefits from installing the newest Hotel TV system. Value-added services generate extra income and make hotel management easier, helping to sustain competition. This type of investment in hotel infrastructure indicates good ROI and not only covers installation cost, but also brings extra income as guests start using paid IPTV services.

In the last decade, the revenue of several hotel chains has increased with the help of IPTV technology, which seriously upgraded the Hotel TV system in those hotels. Hotel guests enjoyed the additional services available from the IPTV system and the convenience of the IPTV user interface. Hotel managers and administrators found it easier to handle the property equipped with PMS integrated with the Hotel TV system.

The reason why IPTV technology gives such advantages to TV hotel systems is because it uses an IP protocol; Android in the client app and Linux OS in the server part. IP is a protocol that allows any data to be sent in both directions. Thus, if your guests want to see latest movie titles…? They have it. You want to collect statistics from every room and see what movies your guests prefer? They’re at your fingertips. Is your hotel a resort where a lot of families stay? Kids and parents want to play video games and the IPTV set top box is actually a good gaming platform. And with the openness of the Android and Linux platforms, supported by a large community of developers and enthusiasts, it is possible to implement just about any features.

CATV, Analog TV, and DTV systems do not remotely resemble what IPTV can do. And of course, there is no chance that these older technologies can compete with IPTV in terms of flexibility, richness of services, and features. With IPTV any kind of digital services can be provided via Hotel TV set top box and you can charge people for using these services. Integration capabilities open yet another field for cross-using the IPTV system for the purpose of making your hotelier job easier and for having more transparent control over the business.

Trends in Hotel TV system solutions

TV was the most in-demand type of media entertainment among hotel guests for the best half of the last hundred years. Thanks to IPTV technology, guests still watch TV in hotels despite the fact that they all have tablets and smart phones with access to their favorite content and apps. Yes, they tend to get distracted by their smart phones or tablets, but IPTV is here to save the day. TV hotel systems are not the same as they were even 10 years ago; now they offer the same functionality as guests are used to from their tablets or smart phones, only this time on a big screen and from the comfort of their couch or bed.

Graph, prepared by VentureBeat based on an Accenture survey

Watching TV shows on devices other than traditional television sets are becoming ever more widespread, and the speed at which people’s viewing habits are changing is increasing. According to a recent survey, only 23 percent of people now prefer to use a TV for watching shows, a drop of 55 percent during the past year.

Says Techspot based on an Accenture survey

Hotel TV systems powered by IPTV technologies are true entertainment centres which include all kinds of services typical for connected platforms and devices we use every day. Internet, social networks, music, YouTube videos, Netflix movies, games, apps, messenger services, and many other things are now hosted by the Hotel TV system.

Even ordering food and checking out is now done via the Hotel TV interface with a click of a button. Images are so much more appealing than a mere one row of text in a printed dining menu. Guests that are usually in doubt and afraid of what they might get can now order without any fear. Other useful service applications are also available for quick integration. Aggregation is a big trend right now as IT systems are quite numerous, and having a chance to integrate them is a big deal when workflow efficiency becomes a concern.

Value added services

Surveys indicate serious growth of revenue generated from value added services, like in this graph from Point Topic:

Revenue forecast for various value added digital services by Point Topic.

IPTV is clearly having a good time as both CAGR for the entire industry and RGI influencing RevPar indicators for hotels will be increasing at an immense rate for the next few years. For example, iBahn backed with financing from JPMorgan Chase successfully invested into Hotel TV system upgrades of such hotel chains as Hilton, Marriott, and others, with use of IPTV technology. These big sharks can’t be wrong; IPTV is the right choice for any hotel that wants to increase revenue.

NetFlix showed how viewers prefer the content of their choice rather than what is scheduled on traditional live TV channels. The Hotel TV system powered by the IPTV Video on Demand server gives guests the desired freedom of choice. The live TV channel list can be easily changed or updated, especially with IP content which is not tied to the geographical location of the hotel. Thousands of channels, different languages, time zones, and genres are available from content providers over IP networks.

IPTV’s potential to enhance the guest viewing experience is becoming clearer. A 2010 report from MRG suggests that over 11 million hotel rooms and 1 million airline seats could be IPTV enabled. IPTV broadens choice and offers the potential for a range of interactive services such as the ability to make instant purchases of items appearing in a TV programme – which could create additional revenue streams for hoteliers.

Amadeus, “Hotels 2020: Beyond Segmentation

There are a lot of direct revenue generating models available through the Hotel TV system. Renting the latest movie titles, getting access to paid movies and channels, ordering food or buying goods from the e-shop, making international calls, accessing the Internet, and more, all from a unified IPTV system interface. Indirect revenue also generated by informational services like advertising, banners, and Digital Signage promoting various services like car rentals, tickets, guides, etc.

Rich content choice ensures you meet the expectations of your guests

A TV hotel service must include several language packs within the channel list to embrace the major nationalities among the guests. This way a hotel can be sure they are not missing potential revenue due to the different locale of content. Here IP content comes in handy. Usually live channels are received from broadcast sources, like satellites or antennae. IP networks allow live streams to be received from nearly any part of the world. This way guests still can see their local news or favourite shows in their native language, despite all the distance. In case of IP content it is very easy to add, remove, or manage channels.

Having exclusive content in your network means you have to protect it, especially to make sure you are not losing potential revenue. The Hotel TV system allows easy and vault-like protection of content. By using various techniques to encrypt content and make it impossible to re-use the stream address, the IPTV system effectively hides content from malicious intent.

Network and infrastructure for Hotel TV powered by IPTV

IPTV technology does not have any special requirements and any Hotel TV system can be upgraded with it. Ideally, a CAT5 or CAT6 cable should be used to allow connectivity for newly installed IPTV head-end and set top boxes which will become part of the Hotel TV system. An existing Ethernet network can be used, or a new one can be installed.

For cases where installing Ethernet is not an option, Coax network can be used as it still allows IP data to be sent. Conversion from Coax to hybrid TV is possible and will be an effective solution. Since IPTV can share one network with services like VoIP telephony, broadband Internet, and other services, a hotel can save on infrastructure and use a single converged network for all services which require such network. The only concern is bandwidth and proper network segmentation which is successfully solved when the network is correctly planned and designed in the first place.

Android Set Top Boxes

Android STB is a classic way to enable an IPTV service on a regular TV panel. It is a small computer designed specifically for decoding IPTV streams and providing an Android OS environment to host an Internet browser, apps, games, and a client app for IPTV services. Even though there are more ways to enable IPTV services on a TV panel, the solution with Set Top Box is the most reliable and flexible one.

FaSTBox Luxury Set-Top-Box with all the most demanding inputs for hotel needs.

A Set Top Box with Android OS hosting the IPTV client app creates a smooth, intuitive, and rich user experience with possibility to optimise, customise, and improve it by simply updating software. When integrated with other systems used in the hotel, the Hotel TV system becomes a powerful medium that hosts the most in-demand and important services provided to guests and used by hotel administration for property management purposes.

Alternatives to Set Top Boxes

Global convergence is on-the-rise and trends that tell us to integrate things; IPTV technology also tries to stay integrated. Interestingly in this matter, the external set top box was moved inside the TV set, in the form of a small module which turns regular flat TV panels into Smart TVs. Vendors like Samsung, LG, Sony, and Philips try to promote their Smart TV models in an attempt to create more value for TV users and position Smart TV as yet another type of Internet-connected device. Indeed, enhancing the functionality of TV sets with apps, an Internet browser, online content, games, communication apps, social networks, etc. seems a good idea.

Actually, it worked and helped to prevent users from leaving TV sets in favor of more flexible smart phones, tablets, and laptops. But still, vendors put way too many restrictions and policies on their proprietary Smart TV hardware and software. We recommend reading this article to see why using an external Set Top Box is still a better option than using a SMART TV client when deployed as part of a Hotel TV system.

Real Use Cases

One good example we had recently is the Silversea Ultra-Luxury cruise ship. They have 5 Star service and strive to have that in all aspects. When it comes to TV channels, there was no solution to make TVs work in areas where there was no satellite signal. Guests had nothing to do with the TV at that time, nothing to watch. Now with an IPTV system, when they turn on a TV they can see a big collection of movies and services with locations and opening times that the ship offers. Instead of dead TV channels they can see a collection of Silversea promo expedition videos (promoting other expeditions) and live cameras on-board, plus a special TV channel that shows the location of the ship on a map. They noticed that guests were more satisfied. While we were setting up the Hotel TV system they personally and especially thanked us for movies and the ship map. When we later talked to support on the ship, they said reports of TVs not working dropped immediately. Below is a picture taken on the ship after launching the IPTV system.

Silversea Explorer I.T. Communications Officer, June 2017

Another good example would be Rogla, Unitur Sport resort & Climatic SPA. They have winter and summer activities where athletes also train all year long. Their company also manufactures all sorts of tools, so we decided to put, on Hotel TV, a shop menu with bicycle tools that guests could buy. After a couple of months they reported that guests were buying tools quite often. We were initially sceptical because we don’t usually create this sort of content, but here it seems to work because of the type of guest usually present. Below is an example of an Info channel full screen image advertising ski tickets. The info is automatically removed when the duration of the promotion expires. The receptionist doesn’t need to keep track of what offers need to be removed.

Screen image advertising ski tickets at Rogla, Unitur Sport resort & Climatic SPA

Shortly speaking…

In conclusion, we’ll look at the current situation with the hospitality market and Hotel TV systems and how IPTV technology can help it. Hotels are facing more competition from booking offers aggregation services, while the hotel business has to sustain this new reality. TV manufacturers try to keep their customers by offering converged devices capable of more things, as they face competition from smart phones and tablets. Would it not be a clever step for a hotel to use this strategy and also offer something extra from their Hotel TV, other than just TV channels?

Luckily, the IPTV industry is taking care of their customers and offers a lot of things for hotels that wish to generate extra revenue through value-added services provided via TV screens to their guests. Yet another thing that IPTV can do to ease the spending’s of a hotel is to use coax cable or a converged Ethernet network. It also supports integrated management tools like Property Management System so hotel administration can manage the hotel more effectively.

Are you winning yet?

Does your hotel belong to the league of the most appreciated and frequently booked hotels? Can your guests say that everything was perfect during their stay? We at Nevron have taken care of your guests already and we are willing to help you with improving your hotelier business by upgrading the TV hotel system, utilising the best IPTV technologies designed with the latest trends in mind. Contact us today to get a free consultation and let our specialists discover more ways of giving your guests a fresh look at the media entertainment they can get from the Hotel TV system.

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