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Innovating In-Room Entertainment for Luxury Hotels

Learn about the cutting-edge technology and customer trends in in-room entertainment at HITEC 2004. Discover how Mandarin Oriental Hotel Group is leading the industry with their smart room concept and high-quality branded products.

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Innovating In-Room Entertainment for Luxury Hotels

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  1. HITEC 2004In-room Entertainment Nick Price CIO/CTO Mandarin Oriental Hotel Group June 2004

  2. Agenda • MO Group • Key Customer/Technology Trends • Recent Projects • Closing thoughts HITEC 2004 (In-Room Entertainment)

  3. Mandarin Oriental Hotel Group (MOHG) • Mandarin Oriental is the award-winning owner and operator of some of the world’s most prestigious hotels and resorts • The Group operates 20 luxury hotels in key business and leisure destinations, with a further five hotels under development in Chiang Mai, Thailand (opening late 2004); Hong Kong, Mexico (opening 2005); Tokyo and Boston (opening 2006) • In total, Mandarin Oriental now operates, or has under development, 7,700 rooms in thirteen countries with 12 hotels in Asia, nine in The Americas and four in Europe. • Current development totals US1.5B. Growth target is 10,000 rooms. • Headquartered in Hong Kong. HITEC 2004 (In-Room Entertainment)

  4. Key Customer Trends • Younger and more mobile • Communicate broadly (work, family, friends) using a variety of methods (phone, cell-phone, email, IM, fax) • Carry laptop, pda, digital camera, dv-cam, i-pod/mp3 etc which they expect to connect up in the room quickly and easily • Stays are short with little time for rest and relaxation so personal time is precious • Want to stay ‘informed’ and ‘entertained’ • Spend on CE Technology is increasing HITEC 2004 (In-Room Entertainment)

  5. Key Technology Trends • Shift from CRT to LCD / Plasma / DLP projection • Transition from Analog to Digital broadcast • Digital 5/7 Channel Audio • Emergence of wired & wireless connectivity HITEC 2004 (In-Room Entertainment)

  6. TV Technology Evolution HD DLP Rear Projection TV 16x9 HD LCD TV 16x9 Plasma TV 16 x 9 Black & White CRT TV NTSC “Color” CRT TV Widescreen CRT TV HD 16x9 CRT TV 1960 1970 ~ ~ ~ ~ ~ ~ 2000 2002 2003 2004 HITEC 2004 (In-Room Entertainment)

  7. Analog to Digital Broadcast • Analog TV standards stable for last 40 years • Only advance was introduction of colour in 1970’s • Analog broadcast ends in US - 2006 • All broadcasters required to switch to Digital to free up Analog spectrum • The rest of the world will follow • We are entering a period of considerable change enabled by • Pent-up demand • Rapid technological evolution • Things will never be the same, or as simple, again HITEC 2004 (In-Room Entertainment)

  8. TV Resolution 1920 • Lower resolution NTSC/PAL pictures must be blown-up to fit 720p or 1080i HDTV displays • Analog CRT TV’s will always display analog TV pictures better than a digital TV • CRT TV’s produce better moving pictures than LCD/Plasma today. ATSC 1080i 1280 ATSC 720p 500 NTSC / PAL 1080 480 720 HITEC 2004 (In-Room Entertainment)

  9. Simple, elegant customer facing systems —not technology for its own sake Improved information sharing across the group and with partners The needfor bold decisions —to realise a unique opportunity for generational change MOHG Technology Strategy Technology Strategy 1 2 3 4 The customer as the core information asset HITEC 2004 (In-Room Entertainment)

  10. Simple, elegant, customer-facing systems • In-room Entertainment Strategy • Implement high-quality branded products that compliment, not contradict, MOHG’s brand • Deliver an experience equal-to, or better-than, at home • Achieve a balance between • Physical product that customers see and use • Infrastructure that they don’t see • Content • Entertain for 30 minutes • Allow guests to “connect up” their own devices both now and in the future • Improve the in-room audio experience • Assist guests to find out ‘what’s on’ • Allow for use at different levels • Achieve a “WOW” – I didn’t expect to see that in the hotel! HITEC 2004 (In-Room Entertainment)

  11. Quality technology Technologies that reflect the five-star values of the MOHG brand… HITEC 2004 (In-Room Entertainment)

  12. Quality technology not contradict them HITEC 2004 (In-Room Entertainment)

  13. Projects • Bangkok - Audio: Bose Lifestyle–5 • London - Loewe TV and Neos Entertainment System • New York - Samsung LCD TV and Media Centre with GDI Entertainment System - RCN FTG TV with 10 HDTV channels • D.C. - Samsung LCD + CRT TV’s and Media Centre with GDI Entertainment System - VOOM all digital FTG TV with 30 HDTV channels Planning for Landmark, Chiang Mai, Cancun, Singapore, Tokyo & MO Hong Kong HITEC 2004 (In-Room Entertainment)

  14. In-room Entertainment • Established a leadership position in the industry through innovation • Developed an integrated in-room entertainment concept (smart room) HITEC 2004 (In-Room Entertainment)

  15. In-room Entertainment HITEC 2004 (In-Room Entertainment)

  16. In-room Entertainment • Established a leadership position in the industry • Developed an integrated in-room entertainment concept (smart room) • Flat Screen • Multi-Screen • LCD TV in bathroom HITEC 2004 (In-Room Entertainment)

  17. In-room Entertainment HITEC 2004 (In-Room Entertainment)

  18. In-room Entertainment • Established a leadership position in the industry • Developed an integrated in-room entertainment concept (smart room) • Flat Screen • Multi-Screen • LCD TV in bathroom • Single Remote Control • Extensive Channel Line-up • Electronic Programme Guide HITEC 2004 (In-Room Entertainment)

  19. In-room Entertainment HITEC 2004 (In-Room Entertainment)

  20. In-room Entertainment • Established a leadership position in the industry • Developed an integrated in-room entertainment concept (smart room) • Flat Screen • Multi-Screen • LCD TV in bathroom • Single Remote Control • Extensive Channel Line-up • Electronic Programme Guide • Unique Mandarin Content • First hotel with true HDTV • First hotel with Dolby virtual-surround sound • Integrated CD / DVD player • First hotel with multi-function aux-panel HITEC 2004 (In-Room Entertainment)

  21. S-Video Audio VGA Composite Video HITEC 2004 (In-Room Entertainment)

  22. In-room Entertainment • Established a leadership position in the industry • Developed an integrated in-room entertainment concept (smart room) • Flat Screen • Multi-Screen • LCD TV in bathroom • Single Remote Control • Extensive Channel Line-up • Electronic Programme Guide • Unique Mandarin Content • First hotel with true HDTV • First hotel with Dolby virtual-surround sound • Integrated CD / DVD player • First hotel with multi-function aux-panel • Driven by customer preferences • Name • Language • Group • Others.. • Integrated Messaging HITEC 2004 (In-Room Entertainment)

  23. HITEC 2004 (In-Room Entertainment)

  24. HITEC 2004 (In-Room Entertainment)

  25. In-room Entertainment • Established a leadership position in the industry • Developed an integrated in-room entertainment concept (smart room) • Flat Screen • Multi-Screen • LCD TV in bathroom • Single Remote Control • Extensive Channel Line-up • Electronic Programme Guide • Unique Mandarin Content • First hotel with true HDTV • First hotel with Dolby virtual-surround sound • Integrated CD / DVD player • First hotel with multi-function aux-panel • Driven by customer preferences • Name • Language • Group • Others.. • Integrated Messaging • High Quality on-screen internet experience HITEC 2004 (In-Room Entertainment)

  26. In-room Entertainment HITEC 2004 (In-Room Entertainment)

  27. In-room entertainment - $$ • Hotels own all CE equipment and networks • Hotels pay per room/night fee for service and content, VoD server and STB’s • Hotels pay for FTG TV • Take rates are good and rising • ~$200 per occ room/month • Free HD content out ‘sells’ paid SD content 4 to 1 • Total spend for 250 room hotel is: • $1 million + $26k per month • Revenue $40k per month @ 80% occ • Payback in 5-6 years • Hotel owns 5-star asset which attracts incremental business HITEC 2004 (In-Room Entertainment)

  28. In-room entertainment - next steps • More, and more affordable, unique Mandarin Content • More HD Channels + VOD • More Audio • Exploration of Adult HD • Better exploitation of customer preferences • Language sensitivity • Selection of stored content • HVAC integration • Music Choices • Digital PVR • Ability to record favourite FTG TV, during, or possibly before, stay • Digital Radio / Web Radio • ‘Wave goodnight to the kids’ • Develop multi-supplier brand relationships TM HITEC 2004 (In-Room Entertainment)

  29. Closing Thoughts • Digital change is with us and happening fast – understand and exploit it. • In-room CE equipment offers significant opportunity for innovation and brand differentiation. • You can differentiate through content too • FTG TV is the ‘main course’ • With 200+ TV channels, do I need VoD? • At 5% (or less), mainstream VoD take rates are low so why bother? • Is Adult content ‘entertaining’? HITEC 2004 (In-Room Entertainment)

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