Two of the biggest hotel chains Marriott and Starwood are to install TelePresence in key properties around the world. ABTN asks whether this global network of ‘near-life' video-conferencing suites is a threat to the hotel industry
Cisco's TelePresence technology, first launched in 2006, has been adopted by many large corporations with the capital to invest in advanced ‘near life' videoconferencing suites. Despite being a few years old, TelePresence remains impressive thanks to life-size high definition (HD) screens, real-time audio and support on key telecommunications carriers such as AT&T, BT and Orange.
The technology is relatively expensive as TelePresence suites need a high-speed communications infrastructure, not to mention a lot of space as most suites feature a large meetings table around which several sizeable HD screens are placed.
As such many smaller companies and organisations have been unable to offset the cost of TelePresence against even large savings in time and travel. Because of this, TelePresence has so far not had the impact on travel that some had predicted.
But hotel giants Marriott and Starwood have now announced plans to install TelePresence in hotels in key cities around the world. These suites will soon be available, not only geographically widening the use TelePresence but also bringing it out from behind the closed doors of large corporations.
Teleconferencing and videoconferencing have been brought to the forefront of corporate consciousness as governments and the public push the environmental agenda. Emphasis on the technology has been further boosted in recent times of economic trouble as a way to cut out unnecessary travel.
But many feal that a growth in video conferencing will inevitably lead to drop in room nights, that hotels by installing Telepresence are jeopardising their own revenue.
David Townshend, Marriott's senior vice president for corporate segments and international sales, is not among them. He argues that the spread of TelePresence will not trigger a decline in travel but act only to complement Marriott's current business facilities.
He said: "As TelePresence continues to grow I think that the impact that it will have on travel will be quite small. There will be some, but they said a similar thing about teleconferencing and that didn't have much of an effect on travel.
"What we'll see is more meetings taking place at the hotels, and more people travelling from further away to get to those hotels."
Mr Townshend predicted that TelePresence would never replace a face-to-face meeting, despite providing as close to a real life experience as is currently possible.
"Nothing can replace face-to-face as the real benefit comes after the meeting, when socialising in the restaurant or the bar for example. TelePresence is a significant improvement on teleconference calls but it's really what I call a ‘collaboration tool'," he said.
Small companies and organisations will not be the only to benefit from ‘public' TelePresence rooms. As Mr Townshend explained, pressure has come from large corporations keen to extend the reach of their own TelePresence network.
He said: "Many of our large corporate customers have been asking for this. Those that already have TelePresence installed in their global headquarters around the world really look to Marriott to extend that footprint towards regional offices.
"To other businesses that do not have this technology, Marriott will become their provider. We are just creating another solution that will form another stream of revenue for our hotels."
The investment in TelePresence on Marriott's part is small and can be counted in square feet rather than dollars and cents, thanks to a long-standing partnership with AT&T. As Mr Townshend explained, Marriott is providing the floor space while AT&T supplies the communications infrastructure and Cisco the hardware.
Starwood announced plans to install TelePresence in important locations on the same day as Marriott, this time in partnership with Tata Communications. The Indian-based telecoms company has much experience introducing new technology into emerging markets with operations in South Africa, Sri Lanka and China.
John Landau, Tata Communications' senior vp of global managed services, explained that his company was currently negotiating agreements with other telecoms providers around the world, in countries such as the Philippines. High profile telecoms providers, known as carriers, include US-based AT&T and BT in the UK. Such inter-carrier and inter-company agreements could allow those using private corporate TelePresence suites to hold meetings in both Starwood and Marriott suites as well as across a range of carriers around the world.
But Mr Landau said that TelePresence was no threat to travel despite its potential for rapid growth into the global public domain.
He said: "There's a big cost to travel, but TelePresence doesn't really replace it, it just loosens some of the pressure on margins. Chief financial officers justify the private rooms with hard savings, but then they do put high pressure on investments based on the productivity for their organisations.
"The real value begins when you can start to go inter-company, to your extended businesses and to customers and suppliers. It's sort of travel substitute but it's more, because it's a collaboration tool which allows things to get done."
Mr Landau explained that the environment would always be a selling point when companies examine the benefits of TelePresence technology.
He said: "The environment is always part of the discussion, especially when you translate what that means as cost-savings. In terms of the final business decision it's the carbon load, regulatory or just raw costs, and it is truly green because the difference between getting on a plane to travel half way around the world and walking down the corridor to a meeting room is huge."
Marriott's first TelePresence suites at the New York Marriott East Side and JW Marriott San Francisco are due to go live from October and are expected to be priced at around $500 per hour, the hotelier revealed. A further 23 important cities were named as part of Marriott's current plan including Shanghai, Frankfurt and London. Mr Townshend said more cities would be identified in the future.
Starwood's plans name ten key properties including the Sheraton New York Hotel and Towers, The Westin Los Angeles and Sheraton on the Park in Sydney. Starwood said that it was also looking to expand the capability into international business markets such as Brussels, Singapore and Tokyo.