REPORT FROM THE U.S.—The staffing and equipment required to have a hotel’s technology and audio/visual services meet the needs of its guests can be a major investment, in both time and money. For smaller hotels or hotel companies, having an in-house staff to manage the IT and AV services can be cost-prohibitive.
When considering whether to go in-house or with a third party for IT and AV work, Bill Oliver, area VP of operations at HP Hotels, said only an extraordinarily large hotel with more than 500 rooms would need its own in-house staff. To maintain the systems in hotels, they need ongoing support, he said.
“Over the last few years, systems have become more sophisticated, more complex,” he said. “The evolution of that causes hoteliers to now look at that tech and IT infrastructure required.”
One of the latest complexities is implementing the new chip and PIN technology in point-of-sales systems and the liabilities that come with not installing the new tech, Oliver said. Even simple things like Wi-Fi and internet access seem simple, but guest demand has grown to the point where there needs to be a significant amount of pipe that come into the property.
“That’s going to continue to evolve,” he said. “All of the tech implementation and interconnectivity—it really becomes a necessity to have some sort of IT expertise. If you can’t afford to have them on staff, you most likely need to subcontract in some way, shape or form.”
For a select-service hotel that might only have one or two small meeting rooms, that property doesn’t need a lot of AV equipment, Oliver said, and it’s typically not difficult for staff to set it up. Properties with a significant amount of meeting space need more equipment, he said, and that revenue stream means it’s no longer good enough to put a projector in a room with a screen or set up a conference phone.
“The corporate events, and even some social events, are getting more and more sophisticated and extravagant in what (guests) want to have,” he said.
Hoteliers at those properties will want people who know how everything works, as well as how to manage it and set it up, Oliver said.
“You’ll have happy customers with more revenue,” he said. “That’s a great win-win situation.”
Commission rates typically range from 45% to 52%, Oliver added.
“If you’re in that range, you’re pretty good,” he said.
Higher cost but more capacity
Marc Szymanik, regional director of sales and marketing at Legacy Ventures, said he’s heard Atlanta—where Legacy is based—is one of the costliest AV cities in the country. Although he hasn’t heard a clear answer as to why, Szymanik said he believes it’s because Atlanta is a convention town and the AV companies can command it.
For that reason, it’s difficult to determine the cost savings for outsourcing AV services, he said. A number of AV companies in the area have consolidated, whereas a few years ago hotels in the region could go out and shop.
However, while the numbers are fewer, those companies have grown in size, increasing their service capacity. As smaller companies, they might have committed all of their equipment among the jobs they contracted to do, Szymanik said, which meant nothing was available or they had to cross-rent with another company, adding to the cost.
“Now they have a tremendous amount of inventory and talent,” he said.
That means when Legacy needs to hire AV services, it only needs to hire one company, Szymanik said. His company uses the same AV service to provide equipment to all of its hotels, he said, and the crews are familiar with the properties.
From physical to virtual
Up until a year ago, Alliance Hospitality had its own in-house IT group, said EJ Schanfarber, president and CEO. It was a five-person team that handled software and hardware issues at Alliance’s corporate office and hotels. When the company’s servers aged out and needed replacement, the company evaluated the level of sophistication its IT crew would need to run and maintain virtual servers.
“Our IT didn’t have that expertise, and we would have to hire someone else to facilitate that purpose,” he said.
With that extra cost in mind, the company investigated hiring a third-party company to handle all its IT functions.
“For the same amount of money, we have people that are current on all tech and would remain current on technology,” he said. “They provided the guidance and assistance in migrating over from the hardware being in our office to everything being virtual.”
There were other motivations to hire a third-party company beyond moving to virtual servers. Alliance’s five IT crews worked in the corporate office, Schanfarber said, so a problem at a property in California meant flying someone out to fix the problem. While someone would be on call to handle IT problems, he said, it’s not possible to immediately put someone on a plane.
The third-party company has offices around the country, he said, so it can help with software and hardware issues when they pop up as well as when Alliance buys or sells a property.
“The service is great,” he said. “I think the hotel GMs feel the level of support has increased dramatically. The systems are more reliable, more current.”
Because of the success of migrating IT over to a third party, Schanfarber said, the company eliminated its other internal resources as well, like telecommunications and mobile, and has saved money as a result.
Vetting the company
It’s all about dependability, Szymanik said. Third-party companies all have a track record, he said, so it’s a matter of doing the homework. Speak to other customers who contracted with them and used their services. Find out if they’re available when they’re supposed to be, whether it’s for a meeting, a kickoff event or for any other specific needs for its clients, he said.
“It’s about accountability and ensuring the company you’re hiring has the same beliefs in customer service as you do for your customers,” he said.
When choosing a third-party IT company, Alliance interviewed several companies with similar levels and types of support, Schanfarber said. The one it picked had a large office in Raleigh, North Carolina—where Alliance is based—which was a selling point because that meant the vendor had resources in the market.
This company wasn’t the least expensive option, he said, but its pricing structure being based on the number of computers serving Alliance made the most sense. Plus, this one had worked with hotel companies before, setting it apart from the competition.
“Many companies were not familiar with hospitality,” he said. “They didn’t understand the proprietary systems. … They’re probably very good with IT, but with regard to hotels, not that much experience.”
Brands can be challenging when dealing with their IT systems, Schanfarber said, and his company needed someone who knows how to make it work. It’s frustrating when a system goes down and the brand is pointing fingers at the company while that company points a finger at the hotel.
“This company had that background, and we found that very advantageous for us,” he said. “They were local and they knew the hotel business. We felt they were a good partner for us.”