Digital Deadline

The United States will enter the real digital age on February 17, 2009. On that date, the analog broadcast system for television will cease and only digital television (DTV) will remain. Although hoteliers have been preparing for nearly eight years for this transition, many will incur exorbitant costs to update the technology in each hotel room and for every property before the deadline, not to mention the additional cost of digital programming, security and room furnishings to accommodate wide, flat-screen televisions or new head-ends. Nevertheless, most hoteliers are not only primed and ready for the transition but are looking forward to how the change will transform hospitality technology.

The digital decision
In 1996, Congress established a timetable for the transition from analog to DTV. The idea was to free up the tremendous amount of bandwidth being used on the analog spectrum that can be utilized for other things. By contrast, the digital spectrum is much more efficient and can transmit more data. When the transition is completed, stations will return their analog spectrum to the FCC to be auctioned off. The Congressional Budget Office estimates that the federal government will pocket $10 billion or more by auctioning off the spectrum.

In the meantime, television manufacturers as well as video on demand (VOD) programming providers will benefit from the switch-over and have already designed the latest in technology to accommodate for the legislation. Manufacturers of televisions were mandated back in 2005 to equip all televisions with screens larger than 32 inches with digital tuners and video on demand providers have been providing digital content for years.

However, providers such as NxTV (www.nxtv.com) see this as a significant leg up for Internet protocol (IP). NxTV only provides an IP-based VOD system and all of its customers are 'future proof,' meaning they will not have to switch or update any hardware. IP technology allows for additional functionality, such as time shift television and converged networks that support phone, Internet and video service. Although 95 percent of hotels are still using coaxial cable, most are attempting to move in the direction of IP technology.

The cost of change
Shawn Nayyar, vice president of hotel operations for Graves 601 Hotel in Minneapolis , is using the NxTV solution and contends that guests will benefit from the viewing experience at the luxury hotel. "Many guests already have the best technology in their homes and expect the best when they stay in a hotel," says Nayyar. "They want their experience to be the same as their home experience." The hotel opened in 2003, outfitting 255 rooms with two flat panel televisions, 42 inches in the bedroom and 15 inches in the bathroom.

However, to comply with the new digital mandate the hotel will have to upgrade all the televisions, replacing them with sets equipped with digital tuners. "Upgrading adds $400,000-plus in expenses, in addition to minor adjustments to the furniture; but we will not pass that expense on to the guests," insists Nayyar, who suggests that guests should not be penalized for the hotel's need to have the latest technology. Nayyar will begin his roll out of the new televisions a little before February 2009 in an effort to get the very latest in technology. He says that guests will not incur a disruption of service.

Although hoteliers will still be able to deliver video using either analog coax or broadcast digital, IP is much more scalable and may be more affordable in the end. Hoteliers using analog systems will most likely incur an even bigger upgrading expense. Analog systems will need additional equipment, such as an APSC tuning box, to take a digital signal and downgrade it to analog. Those using broadcast digital may face digital rights management (DRM) charges in an effort to provide the security required for certain HD channels.

However, Jeffrey Stephen Parker, chief funologist and vice president of technology at Magnolia Hotels, suggests that hoteliers be clear that digital does not equal high definition. "What I see happening is sales through fear.

Too many people equate digital delivery with High-Definition, but this is not true. HDTV needs to be digital, but standard definition TV can also be delivered digitally," explains Parker.

Parker is currently starting to deploy displays throughout the Magnolia Hotels that are flat, LCD units with HDTV capabilities. These sets are priced 150 percent to 250 percent higher then traditional cathode ray tube sets, he says. "Basically if you want to purchase a new TV today for a hotel that works with the pay-per-view systems, you need to purchase an LCD or plasma television," explains Parker, adding that in addition to the cost of the units, content provider companies charge between $75 and $90 for a controller unit for the display. Magnolia is rolling out more than 150 units this year with varying sizes of screen.

Parker adds that with the current delivery options, digital is still a new market. DirecTV (www.directv.com) , for example, offers seven HD channels, plus local channels in certain markets. What's more, many local channels only offer HDTV programming during peak (prime-time) hours, so even though a hotel might have an HDTV with a digital HD signal, the content will still be standard definition, he says. HDTV options from providers such as Comcast (www.comcast.com) , DirecTV and LodgeNet (www.lodgenet.com) are often very expensive, from $3,000 to $5,000 per channel to install and $5 or more per room per month. "For Magnolia Hotels, this nearly doubles the costs of the free-to-guest TV offering, and there is no way to recoup the costs. Until the HDTV offering becomes more mature, Magnolia will deliver standard definition to the guest rooms," says Parker.

Not intimidated by the digital dilemma, a handful of hoteliers are responding more slowly to the transition. At the Skytop Lodge in the Pocono Mountains of Pennsylvania, operations manager Dan Harris is just beginning to think about the digital transition. The historic hotel will have to find a way to balance old school charm with sleek technology, he says. "We are just beginning to plan for this change," says Harris. "I know its coming and we are probably going to capitalize this expense. It will change the feel of our guest rooms since we are a historic hotel, but this is an amenity that our guests use and we certainly need them to remain competitive."