In 2001, AOL and Santander- in partnership with Melia and Spanish entertainment company Planeta- made one of the worst mistakes in corporate history.

The idea was to provide high-income Spanish households with virtual Santander portals right in their homes–one of the very first iterations of online banking. Users could access their banking information from these devices, along with entertainment from Planeta and a virtual travel agency from Melia. Payments for these extra features, internet access, and a rental fee for the portals themselves were made through users’ Santander bank accounts.

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Santander’s Mistake.

These devices featured an uninterrupted network connection and intuitive use for those not yet comfortable with computers or the online world. On the surface, this seemed like a solid strategy for increasing internet usage in Spain, while generating revenue for all companies involved, especially Santander.

This plan failed miserably. The hardware involved was clunky and unappealing, especially in the early 2000s when personal computers were rising in popularity and falling in price. Despite their high cost, the devices lacked the features of standard PCs, including the ability to install and use programs such as word processors. Consumers weren’t interested in this limited functionality, and those that bought it found that the technology became obsolete very quickly. Unfortunately, large brands fall prey to this type of business idea all the time, and the hospitality industry is no exception.

AOL and Santander were trying to stand out by providing their customers with the latest technology in an accessible and cutting-edge format. With competition in the industry so intense, hotels are trying to be on the cutting edge as well, especially when it comes to guest experience. Some brands are excelling in this area. Standing out can mean adding a new service or updating an existing one to reflect changing technology. When done right, this is a proven technique for improving service and efficiency.

However, it’s easy to gravitate to more buzz-worthy products– the ones that get your attention with bells, whistles, and trendy features. More often than not, these new solutions aren’t carefully thought through, won’t stand the test of time, and will end up costing your hotel in the long run.

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Hardware solutions can become clunky and obsolete in a just a few years

The use of hardware (rather than software or web-based tools) is one culprit that we’ve seen time and time again- Santander and AOL are just one example. We know firsthand that services requiring the purchase or rental of hardware, especially for guest request and communication functions, don’t pay off 90% of the time.

To start, hardware often has limited applications and is frequently confined to one or two functions. Consumers want options. This is precisely why Santander customers in 2001 preferred to purchase more expensive personal computers that could do much more than what the devices from AOL and Santander had to offer. A more comprehensive service provides a higher return on investment, and increased usage.

One significant limitation in hardware function, no matter what the service, is that it requires on-property (and largely in-room) usage. If this hardware is being used for guest communications and requests, guests will be out of luck should they want to submit a request while outside of their rooms. Your best bet is to choose a solution that is mobile-based, works for guests wherever they are, and allows for a variety of functions.

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Hardware requires a great deal of maintenance, costing your hotel valuable resources.

Another reason to forgo guest-facing hardware is the maintenance involved. First, you must make the initial purchase of hardware for each guest room. Then, when the products get older, they must be replaced or manually updated. Remote or software-based services, on the other hand, can largely be updated from afar. These updates can occur as often as necessary and without disruption based on user needs and experience. Physical, in-room items also encounter a great deal of wear and tear, and any devices with problems will have to be serviced by your staff, which will require the deployment of valuable resources. All in all, guest-facing hardware only means more things can go wrong.

Ensuring that features are current is also an issue. We don’t have to tell you that technology moves fast. More and more products with more and more features arrive on the market every year. The Amazon Echo, for instance, has come out with six new iterations since its release three years ago. While the second generation of the first model is still popular, Amazon’s new features include compelling upgrades like video integration, reduced size, a tablet format, better sound quality, and even the ability to sync with thermostat controls. And who knows what they’ll come up with next. What seems innovative now may strike guests as incredibly outdated in just a year or so, as is the case with AOL’s devices. Along with a lack of newer features and options, devices experience decreased functionality as they age. We recommend that your hotel use a service that integrates with a guest’s own devices, which they will likely replace every few years anyway.

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Amazon’s Echo.

We’d also like to make a note about guest privacy concerns. Internet of Things devices are becoming popular choices for in-room technology. We’ve taken a stance against hardware in general, but we also want to advise against this particular type of hardware. Consumers are growing increasingly concerned about the information-collecting capabilities of physical devices. Many guests object to having these objects in their rooms and may refuse to interact with them. Your hotel should take this into account when deciding which services to implement. The fanciest products in the world will do you no good if guests aren’t using them.

A number of stories have been circulating this week about in-room hardware solutions for guest communication and requests. The headlines have been captivating, and full of promise about what these devices can bring to hotels. However, as we learned from Santander and AOL, implementing them without careful consideration can be a costly mistake. Despite some vendors promising the world, history has proven that hardware isn’t the answer, especially today when there are so many alternative options.

Do you have any thoughts, questions, or insights about hardware in hotel rooms? Send us an email at contact@ameniti.com.