Analysts Caution Hotels on Bluetooth
"Bluetooth's been around for some time," says Bluetooth Special Interest Group's (SIG) Anders Edlund, "but it's really starting to take off now. And although it's most commonly embedded in headsets and cell phones, there are lots of other applications and much wider take-up of these applications. We're also still innovating and working to make Bluetooth faster and widerband."
Edlund explains that the 'Alternate MAC/PHY' development path announced by the Bluetooth SIG will allow the upper layers of the Bluetooth stack to use the lower level 802.11 media access control and physical layers. This means that the Bluetooth connection can make use of the wider, faster bandwidth of 802.11 when needed, afterwards reverting to the lower powered Bluetooth connection automatically. "The key will be low-cost dual-mode chips which will host both Bluetooth and 802.11," says Edlund. "And we'll see the first products containing these chips shipping in 2009."
Edlund points out that the union of Bluetooth and WiFi will combine the benefits of both technologies. "Bluetooth is all about personal connectivity - for example, connecting a laptop to a mobile or a printer - and requires relatively low levels of power. On the other hand, 802.11 is great at providing a fast connection to the Internet or for downloading files, but it's a high-power application. Combined, you can create a personal connectivity network with much higher bandwidth when you need it but with lower power demands overall than if you just use 802.11."
Analysts warn hoteliers to be cautious
Analysys Research's Mark Main believes that hotel owners could invest their money more effectively, for example, by maximizing their WiFi connection. Main also believes that many existing Bluetooth devices are closed platforms and integrating new functionality may not be possible.
How to assess the potential for your business
So is there a business opportunity for the hospitality industry in this innovation? That will largely depend on your business model and market. The first thing to consider is that the likely benefits fall into three main categories: lower operating costs, value-added benefits and revenue opportunities.
Lower operating costs and value-added benefits will derive from the requirement for less staff to handle processes such as booking. However, savings may not be significant in many businesses, meaning the main benefit will be added convenience from shorter lines and a neater process.
Advertising, promotions and hotel information could be pushed to guests in a timely and tailored fashion using this tie up, or pulled by guests as needed. However, hoteliers should bear in mind that location-based services have been touted as the next big thing for nearly 10 years and customers have shown little enthusiasm as yet for either location-based information or advertising.
The application most commonly being suggested for the Bluetooth-WiFi is for uploading and downloading content. Hoteliers need to think carefully about this issue. Guests may very well appreciate the facility, but the pay off might be a decrease in usage of traditional revenue-generating content (such as video-on-demand) in favor of personal content.
It could be argued, however, that this traditional model faces obsolescence in any case as hoteliers are disintermediated via direct connection to the Internet (enabled by WiFi). There may be an opportunity to retail new forms of content for download to personal devices, but it is still uncertain whether travellers would do this in practice or would instead download directly from established retailers via their internet connection. A partnership with such retailers might keep the hotelier in the value chain, but hoteliers would be well advised to calculate their revenue opportunity against the cost of investing in the necessary platforms.
Consider your business needs
Whether this is a technology you wish to invest in will depend on how you weight the different benefit categories, which in turn will depend on your business model and market. A low-margin hotel chain, for example, will be more concerned with cost savings and revenue opportunities; a premium hotel may be more concerned with offering extra value to its guests and differentiating itself from its competitors. It's therefore important to be clear about what type of benefit is important to you, and how you see this technology delivering against this.