Sometimes less is more

by Joseph De Ciantis

The phrase “do more with less” has been batted around our industry for more than two years. As we move into a new year and our industry continues its return to a sense of normalcy, perhaps it is time we look at this phrase through a different lens.

Some industries have discovered that having less staff leads to more efficient work and increased revenue, particularly those that have done away with brick-and-mortar offices and embraced the work-from-home mentality. Indeed, large technology companies such as Meta, Google and Microsoft have realized that the ramifications of having too many employees can affect the bottom line.

However, software companies that service the hospitality industry have worked diligently throughout the past three years to provide more efficient access to their platforms to streamline operations. And while service levels have taken a back seat in some industries, customer experience still ranks number one in the hospitality industry.

Where does your hotel fit in the 75/25 ratio?

There are a considerable number of existing hotels across the U.S. that will be faced with the challenges of replacing a piece of critical infrastructure within the next two-five years—the aging hotel PBX. A broad estimate finds that 75% of hotels use analog and 25% use IP.

Hotel telecommunications and the infrastructure that makes it work (wiring) fall into two typical scenarios:

  1. Hotels that have traditional analog wiring throughout the building with analog phones in the guestrooms. Most hotels in the U.S. will fall under this scenario.
  2. Hotels that have ethernet cabling throughout the building and use IP telephones in the guestrooms. In this scenario, the hotel requires minimal equipment for cloud communications. Hotels in this scenario are typically newly built hotels, along with hotels built within the last ten years.

Likely your hotel fits in the first scenario. So why, then, do hoteliers avoid the conversation about this ubiquitous technology? Let’s look at the barriers to moving ahead with new cloud communication technology.

Why hoteliers don’t like to think about their phone system

From an onsite communication standpoint, old phone systems and PBX equipment have traditionally been in the category of more—more equipment, more vendors and more maintenance. They also seem to fit into the category of, “We’ll get to that next year.”

Why the reservation to replace this critical piece of a hotel’s infrastructure? Here are five reasons hoteliers are slow to replace an old PBX phone system.

  1. No budget for capital expenditures.
  2. Concerns about disruption to their business.
  3. Scarcity of IT resources to manage the legacy phone system replacement.
  4. A lack of knowledge about modern phone system options.
  5. Anticipated challenges of retraining staff.

While these are valid concerns, let’s address them by looking at the increasing challenges associated with aging PBX equipment and some arguments to overcome them.

Expensive hardware upgrade and maintenance contract requirements

The phone system is critical to a hotel’s infrastructure but traditionally takes a back seat to other capital expenditures. However, if we put old equipment side by side with cloud communication phone systems, the costs for maintaining, upgrading or retrofitting old equipment are exorbitant by comparison. For instance, hoteliers that retrofit old systems to ensure their phone systems are up to current FCC mandates could spend 80 percent of the cost for converters alone.

As a hotel’s 15-20-year-old phone system continues to degrade, component failure could result in thousands of dollars for parts and labor. PBX systems and the parts to fix them have gone up extensively over the past five years and are becoming more challenging to obtain.

Like SaaS software, cloud systems receive ongoing automatic software upgrades via the cloud at no additional charge. As technology advances, so does the hosted communications solution without another forklift installation.

Disruption of business, particularly from a customer service perspective

Advanced cloud technology is reliable and designed to protect the hotel’s reputation and service standards. New systems provide security and reliability with reduced downtime, one point of contact in case of disruption, and 24/7/365 service metrics.

Outdated features are not flexible enough to meet current business needs

With today’s aging PBX equipment, property owners with older hotels must budget for ongoing replacement equipment. In doing so, they are likely overpaying to keep the old equipment running, which can be upwards of five times the cost of installing new equipment. When a hotel loses access to critical features such as the voicemail system, replacement costs can be upwards of $3,000 or more.
While you may be tempted to repair each failing component, such as the voicemail example above, the overall costs for ongoing repairs (or adding new features) will be more than buying a new cloud communication system.

Leveraging technical advancements such as remote support, ongoing remote updates, and chat and texting features are part of the monthly contract. This includes critical FCC requirements such as direct 9-1-1 dialing and the addition of the Suicide Hotline. Innovative features are automatically pushed to a cloud communication system as soon as they are available.

Increasing reliance on IT staff for management

There should be less focus on equipment issues and more focus on your core business. Less equipment means less to manage. PBXs are traditionally hard to manage. Hosted cloud phone solutions save time and resources by allowing hotel management to take advantage of proactive and reactive monitoring systems. Doing so helps resolve challenges faster than an in-house solution.

Fewer vendors and more service options alleviate the concern for reliance on IT staff. Hosted services eliminate the need for communication with separate vendors such as interconnect, telecom carriers and low-voltage repair technicians, resulting in less finger-pointing: one vendor, one solution.

More importantly, there is little to no onsite technical support required. After installation, ongoing maintenance and support are included, eliminating any additional troubleshooting and support charges typical with on-premises systems.

Capacity limitations

Older systems meant there were capacity limitations. Cloud systems are designed for almost limitless scalability and can treat multiple locations as one office. They allow management to easily add or manage a front office or multiple hotel locations. The benefits of connecting offices/home offices to the same phone system include sharing a centralized receptionist and using extension dialing between remote geographic locations.

Confusing monthly telecom statements

Older systems require keeping track of multiple vendors and their fees. Even the traditional phone bill could be challenging to understand. They also required spending 10%-15% above the purchase price for annual maintenance. The flat monthly fees of a hosted solution eliminate the guesswork of operating expensive PBXs.

Staff turnovers make re-training an issue.

While PBX equipment requires technical support personnel, new cloud-based solutions offer SaaS-type technologies. These include easy-to-understand and use dashboards, notification systems that communicate with on- and off-site personnel, and an online manual to help answer any question. This ensures new team members gain quick access to help them understand the system without engaging a vendor to do so.

Will you start the new year worrying about old equipment?

If you still think your old PBX will last another ten years, you may be in for a surprise. PBX systems were designed to last 10-15 years. We are beyond the lifecycle for much of the equipment running in hotels across the country.

Your property communication system is a critical component of your infrastructure. 2023 is the time to rethink old strategies regarding your phone system. Aging voice equipment may already be showing signs of failure, and you may be experiencing frequent service issues that are disrupting your hotel’s daily operations.

When we look at any technology from the perspective of “do more with less,” this phrase takes on a new meaning, particularly in the cloud communication solutions of today, where less is definitely more.

Joseph De Ciantis is cofounder of Think Simplicity.

This is a contributed piece to Hotel Business, authored by an industry professional. The thoughts expressed are the perspective of the bylined individual.