In this issue’s market insight, InAVate tours the very corners of the region to get a snapshot of what’s going on in the hospitality market. Integrators and distributors give their side of the story and we also try to discover who really does make the decisions and therefore whom the integrator needs to influence.
Hotels seem to be one of those evergreen markets. It’s incredibly rare to find a company involved in the hospitality or leisure industry, be it and integrator, distributor or manufacturer who is not happy with his business. From Dublin to Dubai Hotels are being built, refurbished or converted. So just what continues to drive the market forward? Is there any sign of things slowing down? And if you’re not involved already, who are the people making the decisions and signing the contracts that you need to be getting your company in front of?
The western most port-of-call for our journey is Ireland, and Dublin based integration firm AVL Systems. Sales manager Mark Fay estimates that around 40% of the company’s business is derived from the hotel industry: “Over the past year or so we’ve done some really good jobs. A few individual jobs and some work for chains. The chains are the ones to keep an eye on at the minute. People like the Carlton and Days groups are g rowing really fast either working on completely new builds or buying and refurbishing sites where they are available.
“I’d say the prospects for next year are also really good, new builds in particular continue to be the big thing. A lot of land has been bought up. All in all it’s pretty busy.â€
Technology wise, the Irish hotel market seems to be well up on the technology side of things. Fay reports that Cat 5 video distribution is a well adopted by customers. Asked what technologies to look out for over the coming months he responded: “I think the entry level automation and control products are ones to watch. Something that can offer a decent level of automation but compete with the big boys on price – the Vitys, Neets and Cues of this world – will see a lot of use.â€
Heading east, we arrive at the doors of Manchester based firm Pro AV (formerly the integration arm of the TSK Group, but now renamed and re-badged). System designer Rick Burdge believes repeat business is key to the company’s continuing success in the market: “They keep on coming back, which is a good sign. The hotel work is still one of our main focuses. It’s bread and butter work and the projects tend to be fairly long term. We’re very optimistic for the next twelve months, the re-branding of the company has given us the opportunity to do some more marketing and attract some new business. From what I’ve seen of our order book for the year we’re (worryingly) busy!â€
“In terms of the equipment we’re installing, we’re getting involved in a fair bit of digital signage. It’s reasonably basic stuff in some cases, signs on doors that say ‘We welcome XYZ company’. It’s linked into the hotel’s room booking system.
“Increasingly often we’re also installing an entirely separate AV LAN to run things on so we can keep it locked down and separate from general IT use. You get all kinds of customers in these business suites, who have varying degrees of computing expertise. They see an RJ-45 socket and assume it’s going to get them free internet access. Alternatively they were seeing devices appear on a wireless network. If we keep things totally separate we can hide things like the AMX access points or whatever, and keep them out of harms way.â€
Tourism is a corner stone of the Swiss economy and where there are tourists, there are hotels. Harry Horlacher, MD of audio distribution specialists Go Wild! Is optimistic about the current state of affairs and the prospects for future development in his country:
“I would say that about 10-15% of what we do is in this area of hotels and leisure and so forth. It may not be a huge amount, but it’s important and I think it will increase for us. The main reason for this is not necessarily that we’re going to see lots of new hotels, but that the ones we have are in need of upgrades for a fair number of reasons.
“One thing that’s interesting is the concept of a sound identity. It’s a corporate idea that seems to have spread to hotels. Just like you have logos and colour schemes, now you can have an audio identity. But of course this requires a decent sound system to put it across.
“Clearly an important market for us is the Ski resorts, not just normal tourism but, what you might call business tourism. You find business people come for a meeting and then stay for a few days skiing. Therefore the hotels up there have to have business suites as well as the standard holiday accommodation. These kind of business people are also driving up expectations. I would say in Switzerland there are a fair number of hotels below international standards, but they are being forced to improve. That creates some opportunities for us. The market itself is quite slow to move because it’s fragmented, there are a large number of independent hotels, and not many chains. That means that the upgrades in AV equipment are very slow. It’s been going on for ten years, and will go on for another ten!â€
Harry states that 100V technology still dominates the PA applications. This is because that much of the integration work is carried out by local firms to the hotel rather than bigger companies who might be more knowledgeable or willing to adopt digital technologies. However, for the largest hotels digital audio solutions are certainly present or coming soon.
Journeying south to the Mediterranean, tourism continues to be the major driver behind the hotel industry. Turkish distributor and integrator Telesin Istanbul operates in its home country as well as in Cyprus, and the former soviet republics to the north. Tamar AVCI, Product Manager gave his opinion:
“We have had a big issue here with the importing of cheap products from the far east. There are a number of companies importing these, and we have been completely unable to make a price argument with customers. However the situation is improving. The original problem arose with hotels offering very cheap, all-in-one package holidays - food, drink and accommodation all for a very low price. The package was cheap, the rooms were cheap and the equipment needed to be cheap. Nowadays customers just expect more from the hotels, so the owners are having to invest a lot more in facilities.â€
“In general the market is ok, but it’s not amazing at the present. We’re in an election year, so people are a little uncertain about the future but I don’t think it will slow things too much. Elections don’t tend to put off tourists. I’m optimistic for the next year because we seem to be able to sell some better value systems. Some hotels are expressing interest in high-end solutions such as Meyer Sound in their ball rooms and the general quality just seems to be increasing. Even at the 100V level, which is still 100% of our PA stuff, there are some really nice sounding products around.â€
The jewel in the crown of the hotel market is still, however, located squarely in the Middle East. The Emirates of Dubai and Abu Dhabi as well as neighbouring Qatar and Saudi Arabia continue to enjoy an unprecedented boom in the construction industry.
One man placed well to observe this is Kim Donvig, CEO of audio manufacturer Artcoustic. He’s based in Dubai. “I expect a huge amount for next year. 50 Hotels will open in Dubai over the next three years alone and this will have an effect on all of the Middle East. Without a doubt, the hotel industry globally is doing very well and the hotel groups are making money like never before.
“As a product supplier I observe that most hotels are not willing to invest the big money in the actual rooms. When you leave your room however it’s a completely different matter for us. Our discrete speakers find themselves everywhere from the Gym or Spa to the lobby and function rooms. In recent times there has been a real shift in emphasis. Most people are now fed up of poorly performing ceiling speakers. We can simply offer something so much better and also offer integrators the chance to really make some money on an install through our added value.â€
Another beneficiary of the region’s exploding market is Bond Communication’s Business Development Manager, Jason Abboud. Bond Communication’s are much more than an AV integrator offering services ranging from structured cabling and access control, all the way to car park management systems and AV installation.
“The hotel sector is probably about 3-40% of our business and the market here is still growing in leaps and bounds. Even to the extent that people are now converting other residential apartments into hotel type facilities. There is that amount of demand for space. At the same time the market is beginning to see the need for something other than five start hotels. The average business visitor only visits the room for sleep, therefore we’re seeing more properties proposed and developed in the three or four star market. However, overall I don’t really see any calming of the market, if anything the surrounding states are now shooting up too. Dubai sets the standard still of course.
“If we’re talking about technology, it’s totally dependent on the quality of the hotel. At the top there is full room automation with all the trimmings, but even nearer the bottom of the scale you’d expect push button control at bedside of the curtains, lighting and other services. The business suites are normally pretty extensive too, with top of the line AV systems. Some of them can extend to twenty or thirty conference rooms, on top of a perhaps 1200 seat, divisible auditorium.â€
So, all across EMEA, the hotel industry is a good and happy place to do business, if you happen to know the right people. One of the things to come out of discussions is the complete inconsistency between territories, and even between projects about who’s in charge, who’s taking the decisions and who’s ultimately responsible. In Turkey, Tamar reports a total absence of consultants from the process, which leaves no technically savvy interface between the installer / distributor and the client, usually an investor with little knowledge of AV technology.
Harry Horlacher’s experience in Switzerland is somewhat better, with customers generally employing an expert consultant to oversee the tender process and give the client a realistic set of expectations. In the UK, Rick Burdge feels that the clients generally have a good technical understanding, so the need for a consultant is less important and the integrator and hotel management relationship is the key factor. However none of these are hard and fast rules as customer preference invariably changes from project to project.
The common theme however is clear, whether it’s the owner, consultant, architect or electrical contractor who’s calling the shots, they are all waking up to a need for better quality systems, which ultimately can only benefit the integrator.