The Impact of Legacy IT Infrastructure on the Hospitality Business
Abstract
Use of the latest technology is a proven way of facilitating efficient hotel operation. While it is true that the hospitality industry makes leaps in technology innovation, the fact remains that the adoption of technology is still blocked by legacy infrastructure. This article offers an overview of the impact the latest Information Technology has on hotel operations as well as how infrastructure limitations may stall industry growth and reduce sustainability by blocking such new technologies. This article also includes an overview of IT vendors’ leverage on limitations imposed by legacy IT infrastructure in hotels.
ICT Development Index Versus Real-Life Technology Adoption Rate
IDI map by ITU as of 2017 shows discrepancy in ICT development Index across countries.
5G roll-out can be a good benchmark for the ICT development Index per country, and some countries are leaders in adopting the latest telecommunication standards. However, the same countries that are leaders in adopting newer generations of mobile communication technology are sometimes bound to older technologies in other parts of their infrastructures. While it might be odd, it is the reality even in the most advanced countries. Sticking to previous generations or older technologies might have its advantages, but it still limits the capacity to adopt the more advanced IT solutions that cannot operate on legacy infrastructure. A good example of this is the number of hotels in the United States which still use coaxial cable to deliver TV channels to in-room TVs in 2022. The problem with coax cable is that it was never designed to be a full-duplex communication provider, nor can it support the same uplink bandwidth as Ethernet Cat5/6 cables. On top of that, coaxial cable is usually not a part of a computer network and instead is only distributing TV channels with little capacity to provide adequate client-to-server communication. As a result, hotels with such outdated infrastructure cannot use it to deploy the latest IT solutions designed to work in a full-duplex high-bandwidth computer network.
Coaxial cabling is considered a legacy technology in literature going back as far as 2009, when Simpson, W., and Greenfield, H., mention it as “...coaxial cable... is a legacy in many homes today”. Thirteen years later, some hotels still use the same technology with no plans of replacing it with other available solutions, such as Cat6 Ethernet cables or equivalent wireless networks.
Hospitality solutions nowadays are very interactive and are usually built on the web technology stack which requires full-duplex communication between the client and server. Limited use of coaxial cables is still possible for such applications with the help of DOCSIS or similar OSI Layer 2 protocols, but with some downsides and limitations. Such an addition would require upgrading some part of the infrastructure that can get very close to the cost of laying Cat5/6 cables, installing Wi-Fi hotspots or using 5G mesh antennas. Even if implemented, the bandwidth of coaxial cables would still be incomparably narrower than that of fibre, Cat5/6 or the latest generations of wireless comms.
Unfortunately, Wi-Fi cannot always replace the Cat6 Ethernet network and has more security flaws by design. The 6th generation of Wi-Fi offered features that can help minimise channel interference or improve bandwidth by using the MIMO technique. However, a professional computer network structure would imply the use of fibre, Cat5/6 and enterprise routers/switches that can provide the security, performance and availability expected by a sensitive clientele of a decent lodging property.
As indicated above, modern IT solutions depend on an up-to-date IT infrastructure, but this kind of infrastructure is unavailable to numerous hotels. As a result, some parts of the hospitality industry are bubbled in a technology era a couple of decades behind today’s generation, when they could be driving their revenue up by using the latest hospitality IT solutions. This can be perceived as a partitioning of businesses where some of them exist in a world where Industry 5.0 does its job, and some of them don’t have access to the adequate means of making their operation transparent and digitized enough to be further optimized and improved according to Industry 5.0 goals. On a larger scale, such discrepancy in the ability to access the latest IT solutions may block some hotels from being sustainable and reduce their profitability, which in turn will have an impact on Gross Domestic Product growth.
Next-Gen Comms Enabling More IoT Devices
Internet-of-Things is the answer to an increased demand for transparency, interactivity, and automation. Data-driven transparency allows tracking items in stock, monitoring space occupancy status, seeing specific metrics, and understanding some processes that are otherwise not trackable. Interfaces have become so intuitive that users are willing to interact with almost anything with a button, a touchscreen or voice control. Beyond that, devices have become so intelligent that they can now interact with users or even provide comprehensive automation of some routines. All that changes the environment of hotels and the logic of interactions with them, but requires connectivity beyond typical network capability. 5G mobile services with a mesh design can accommodate more devices than a typical Wi-Fi hotspot which provides the capacity demanded by today’s variety of IoT devices that can be used in hotels. More affordable satellite communications are also helping to adopt more IT solutions in locations where fibre is not available, connecting more properties to the Internet. However, the current implementation of these technologies is still far from its full capabilities which again limits connectivity and reverts hotels to using Cat6 cable or Wi-Fi to deploy their IT solutions.
Data and AI Driven Hotel Operation Improvement
"The development of digital services requires the identification of the user, information on their individual preferences, and a decision-based calibration by Artificial Intelligence. In AI-based decision making solutions, the former decisive factors are replaced by a virtual personal assistant, which is able to map the consumer’s preferences based on their digital footprint, and create an optimal personalized offer from the available big data systems.”Martin Zsarnoczky, Boston University.
Digitization in hospitality can affect both customer relations and internal operation efficiency. By knowing its guests better, a hotel can understand what the ideal offer looks like. At the same time, the property management can learn a lot about how they can further improve their business processes, better dispatch available human resources or optimize purchasing routines. Data mining totally depends on how advanced the IT infrastructure of a hotel is, and using legacy technology here will render the hotel out of the business of knowing itself good enough to be competitive.
Since the signals offer two-way communication, they can also be utilized to acquire information on the habits of guests. Buhalis & Leung, 2018
Beacons allow hotels to gather information about where visitors are spending most of their time within the hotel or the peak usage times for different facilities such as the wellness room, pool, and bar. Rajath, 2017
Tracking habits of guests, knowing how human resources are managed, or understanding the flow of various supplies, is the kind of data needed for the process of eliminating inefficiencies in hotel operation. Latest IT solutions allow us to collect more data than ever before and export them for further analysis.
New Interactivity Scenarios with IoT Devices
What does IoT look like in contemporary hotels? As IoT generally defines any device connected to the Internet, any device connected to a hotel's computer network contributes to its IoT ecosystem. These devices can be occupancy sensors, motion sensors, smart thermostats, smart locks, room control units for light, HVAC and curtains, surveillance cameras, interactive screens, TVs, in-room tablets, point-of-sale and even guest's own devices. When all these devices are connected and integrated with a centralized smart hotel software like a property management system, guest entertainment, mobile app, payment gateway, building management system, and access control, guests and the hotel staff have much more convenient ways of interacting with the hotel. At the same time, the hotel management can get an insight into how the property operates, where most inefficiencies are, and how to improve the guest experience or optimize staff management.
Practical scenarios of using IoT devices in hotels may include saving energy by turning off the lights in spaces where occupancy sensors detect no presence of people, managing thermostats building-wise to further improve eco-friendliness, making certain transactions between guests and the hotel less demanding for assistance of a live person by automating, making them wireless or digitizing them, going paperless with restaurant menus and hotel information booklets, allowing instant messaging with the property and extending customer reach beyond their stay period by using a hotel-branded app. Our contribution as a vendor to helping hotels get the full benefits of IoT is mainly found in how we integrate the software that is connected to many devices in the hotel with our guest-facing apps, making all these IoT devices accessible to guests and opening a gate for the hotel to collect valuable data that can be further analyzed to discover new ways of managing the property with the help of all the variety of sensors, buttons, actuators, switches, screens and controllers.
How Failure to Upgrade IT Infrastructure Affects Profitability of Businesses
“Investment in IT had a greater impact on a company’s profits than comparable spending on either advertising or R&D. ...In fact, IT investments had a marked positive effect on revenue growth; for example, a $1 increase in IT expenditures per employee was associated in our study with a $12.22 increase in sales per employee.”
Research by Sunil Mithas, Ali Tafti, Indranil Bardhan and Jie Mein Goh, MIT, based on data from more than 400 global companies.
Keeping the IT infrastructure up-to-date pursues several goals, such as keeping personal and commercial data secure, gaining access to the latest data analysis methods, cutting costs, and eliminating risks caused by the use of legacy technology, and maintaining operational efficiency at the industry-wide level of sustainability. For example, automation and computerization of specific business processes may reduce or eliminate the use of office paper which benefits the planet and reduces the cost of office supplies. Automated energy and HVAC management can reduce the load on the electrical grid, thus minimizing the emission footprint of the property. Such systems would require Cat5/6 and other modern connectivity for occupancy sensors or smart room and building control systems, which confirms how important it is to use modern IT infrastructure that is fully compatible with the newest IT solutions.
Hoteliers Recognize the Importance of IT Upgrades
It’s great to see the strong motivation of hoteliers to invest in Information Technology upgrades. It proves that hotel revenue is positively affected by automation, digitization, and comprehensive use of technology, and that hotel owners recognize the benefits. However, a property can’t always control the availability of external infrastructures like High-Speed Internet or the latest generation of TV broadcasts. Sometimes internal infrastructure can’t be upgraded either because of a lack of budget allocation, or if upgrading it will require closing the hotel for a renovation. We at Hoteza believe in cloud-based solutions that minimize on-site hardware requirements and we hope that further deployment of 5G and satellite-based communications that become more affordable will allow more properties to adopt the latest Information Technology and positively change their operation efficiency and revenue generation dynamics.
Ways to Overcome the Infrastructure Limitations
Vendors have little control over the existing infrastructure of a hotel. A typical installation either happens because the proposed solution is compatible with the existing infrastructure or never happens if it is not. Such incompatibilities can be an absence of broadband Internet and Cat6 Ethernet or the use of old or non- commercial TV models, which is a common issue in properties that lacked renovation in the last decade. Upgrading TVs or installing Ethernet cable requires a serious investment or a renovation that would close the property for some time. All that keeps hotels in hesitation to adopt the latest IT solutions whenever their infrastructure is too old.
However, there are a few things that Hoteza as a vendor can do to deliver its solution to a hotel even with an incompatible infrastructure. One technique that we use is to host an instance of Hoteza software dedicated to a property in a centralized cloud. This way the infrastructure requirements narrow down to on-premises Internet access or even have no such requirement. Another technique is how Hoteza can enable its mobile app with rich functionality available from guests' own devices, typically a smartphone. Such an app can allow the property to stay in touch with their guests before, during and after their stay while guests can interact with the hotel, rooms and amenities, get information about the hotel, book tables, order food and drinks, request a service or an extra item, perform an express check-out, view their bill summary and more. When integrated with a Property Management System and Point of Sale, the app can provide a certain level of automation, while the cloud may provide insight into guest preferences and hotel operations.
We believe that such a delegation of infrastructure where servers move to the cloud and client devices are guest-owned smartphones empowered with a feature-rich hotel app, may help hotels with older infrastructure to enjoy the positive impact of using the latest technology without investing in costly infrastructure upgrades.
References
Simpson, W., Greenfield, H., 2009, IPTV and Internet Video: Expanding the Reach of Television Broadcasting 2nd edition, Focal Press: Elsevier
Sintala S., K., 2019, INFORMATION AND COMMUNICATION TECHNOLOGY IN THE HOTEL INDUSTRY, Kent State University College & SRM University, https://etd.ohiolink.edu/
2021, Specifications of 802.11 standard for wireless communications, Institute of Electrical and Electronics Engineers, https://ieee.org/
