Doing Business in Hospitality AV
AV pros says the restaurant and hotel markets are gradually improving. But selling new AV systems to those customers isn't business as usual. Certain trends are driving hospitality customers.
Michael Anthonys Waterfront Restaurant in Jersey City, N.J., employs Control4 technology to help route content to 20 displays, three projectors, two stages, and 10 audio zones. Local integrator Wanderlogic handled the design and installation.
As the U.S. recession deepened in 2008 and 2009, people and companies cut back. For households, that meant cutting back on family vacations and eating out. At offices throughout the country, it meant fewer business trips. The net result was fewer people traveling, staying in hotels, attending conferences, or eating at new restaurants.
"2009 was a tough year, but 2010 was a bounce-back year," says Fred Gerhart, president of Impact Group, a firm that offers production support for corporate events, meetings, and trade shows. "Hotel sales are still off, but they're improving."
Does that mean AV professionals can begin applying the same strategies to the hospitality sector as they did before the recession? Not quite.
This shift in focus means that an AV designer or integrator needs to know more than how to hang LCD TVs. "You need to know how to field-terminate Cat-5 cable, basic networking concepts, and explain to the client about fiber transport and high-definition media," Tassey says.
"There are now more processors, amplifiers, and other rack-room components to support more sophisticated AV systems, but there isn't more space," Saenz explains. "Larger hotels may split the rack roomsone for the convention center and one for the hotel rooms. Another space-saving solution is to install racks in catwalks."
"For example, what's changed in the meeting business is that the definition of a large event is now half the size," Gerhart says. "A smaller meeting means less need for presentation technology."
Other corners of the hospitality market are also approaching recovery cautiously. "We're seeing more specifications written, which indicates that the market is preparing for action once capital is available," says Dan Saenz, marketing manager for Crown Audio. "There is a strong preference in the hotel sector for cost-effective solutions."
"Clients still have a safe but curious mindset," says Roy Scardina, executive director at Swank Audio Visuals. Sardina says that 2009 marked a change in the meeting industry. "Today, clients are looking for more value. Prerecession trends, like elaborate projection systems, are used much less."
Still, AV companies agree, hospitality's purse strings are loosening. If you match what you're selling to what hotels and restaurants are looking for in a postrecession market, you're likely to capitalize. Here are a few critical trends.
Trend 1: Network Robustness
Hospitality venues, specifically hotels and restaurants, must invest in new AV technology to attract customers. Why would anyone dine at a restaurant with CRT TVs when they can go to practically any other restaurant and regale in banks of high-definition flat-panel TVs? But as AV technology advances, and both audio and video signals go digital, the emphasis in hotels and restaurants is on the quality of the distribution network.
"Both hotels and restaurants are looking for the capability to send a central AV and data source to multiple destinations for cost efficiency," says Jim Tassey, project engineer with Ford Audio-Video Systems. "A venue needs an industrial-strength infrastructure to handle it all. So the focus turns to redundancy and a plan to minimize failures."
Trend 2: Owner Preference Dictates AV
Hotels and restaurants are service-driven businesses, so it's a little surprising that, increasingly, restaurant and hotel operators drive AV designnot necessarily customers and their preferences.
"Restaurant owners are very budget-conscious. Unless it's a novelty restaurant, there isn't a big investment in innovation or new technology," explains Steve Langevin, president of Advanced Lighting & Sound. "Still, AV design varies based on the owner's wants and needs. If I can get an owner to attend a demo, selling them on upgrades is easier after they've heard and seen the technology."
Langevin likens his job to that of a residential installer. "Working in a small restaurant is similar to working in someone's house," he says. "The owner's connection to the place is personal and buying decisions are emotional." And like today's homeowners, hospitality operators are careful with their money. "What the owner wants is what the audience gets," Tassey says.
When it comes to hotel AV services and meeting support, it's the meeting planners and producers who are driving AV system design. Companies such as Impact Group and Swank Audio Visuals must walk a fine line between providing the requested AV systems for a meeting and evaluating the situation to determine if more advanced AV technology, such as portable telepresence solutions, would be sufficiently attractive to enough clients.
Gerhart says that his company makes expensive technology investments only after conducting thorough research and then sells the idea to the client if it's appropriate. "It's a balancing act," he says, "because the equipment is usually stored at a hotel site. So it's not generating revenue elsewhere when it's not in use."